A Look at World Cup Fever…

July 12, 2010

After a month of —World Cup Fever, Spain finally emerged as the victor of this year’s tournament. And, like most events that capture the public’s attention for a sustained period of time, the World Cup turned out to be good for some businesses, but not so good for others.

Last week the Associated Press published an article reporting that after Italian auto workers were told they couldn—t watch a match on company time, they went on strike a half hour before the game started. It also reported that business in Brazil —basically shuts down when its team plays, and that Germany lost an estimated $8 billion in national productivity because citizens were glued to the games.

But surely other companies made money, right? Here are a few of the recent examples we found.

In an Earnings Release Conference Call on June 23, Nike’s (NKE) President and CEO, Mark Parker, stated in the transcript of the call:

—When you watch a World Cup match, whether you’re inside the stadium or in front of your TV, you can’t help but notice the bright orange and purple signature of our boots on the pitch. We developed four distinct silos of performance footwear, our lightest ever, and made them all the same vibrant color scheme — unheard of, until now. And that iconic product is just the very tip of the complete offense for World Cup we call Write the Future.

PriceSmart, Inc. (PSMT), an —international membership shopping warehouse with stores in 11 countries, reported in its July 9 quarterly report:

—The Company experienced strong sales in a number of merchandise categories as a result of the World Cup soccer tournament. For example, the Company experienced a 22% increase in sales in the electronics merchandise category in the quarter compared to the same quarter last year. While only one of the Company’s markets was in the tournament (Honduras), the World Cup generates significant interest across all of the countries in which PriceSmart does business and will likely have a continued positive impact on sales in the first part of the fourth fiscal quarter.

Coca-Cola Hellenic Bottling Co., SA (CCH) recently disclosed that ——the World Cup also enables us to realize significant benefits from the unique marketing opportunities of one of the largest and most prestigious sporting events in the world. Likewise, Brazilian Distribution Company (Companhia Brasileira De DistribuiâÝâìo) (CBD), which operates supermarkets, convenience, and department stores, reported that its sales spike in World Cup years.

Other companies used the World Cup as an anchor for marketing campaigns. Examples include Constellation Brands, Inc. (STZ), which reported in an exhibit to an 8-K that it built a sales promotion around the World Cup, as did Telecom Argentina SA (TEO), which ran a marketing campaign —offering prizes such as Ecosport trucks or trips to the World Cup.

Banking giant Banco Bradesco (BBD) touted its special-edition —FIFA 2010 World Cup Visa Credit Card as one of the choices that enabled it to offer its clients —the most complete line of credit cards and related services.

And Mexico’s Grupo Televisa, S.A.B., (TV) disclosed that its subscriber base increased, as did the costs required to air ——exclusive transmission of 24 matches of the 2010 Soccer World Cup.

Of course, regardless of how well a company fared, it’s inevitable that many companies will soon start trying to figure out how to profit from the 2014 tournament. And luckily for them (as opposed to the teams that compete), there can be lots of winners – not just one.

Image source: SouthAfricaLogue.com via Flickr

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