Sponsors may not be scoring this World Cup

Sponsors may not be scoring this World Cup

Author | Source: Business Standard | Saturday, Jun 10,2006 7:20 AM

Sponsors may not be scoring this World Cup

The FIFA World Cup is a marketing dream for multinationals such as Adidas and Coca Cola, who pour in millions of dollars in advertising and sponsorship.

Well, when you have almost a billion prospective customers watching every match of the tournament, the dollars are being spent well. Right? Well, not exactly.

Sponsorship of major sporting, cultural or entertainment events do not necessarily translate into increased company revenue, or better performance of the sponsoring company’s share price.

In fact, a study by the S&P Custom Index Group of the previous two World Cups’ sponsors proved to be inconclusive in determining the effectiveness of sponsorship.

The group constructed two indices, tracking the equity performance of the official sponsors of the 1998 and 2002 editions of the football mega event. The performance of each index is benchmarked against the S&P 500 and the S&P Europe 350.

Interestingly, while the 1998 World Cup Sponsors Index underperformed the S&P 500 and S&P Europe 350 indices, the 2002 World Cup Sponsors Index, fortunately outperformed both the benchmark indices.

So, will the 2006 edition bring good news for the sponsors? They will have to keep their fingers crossed and hopefully by then, the markets would have also recovered.

And for all those Brazilian and Ronaldinho fans, here’s one more upset.

The S&P Golden Boot Indicator finds Les Bleus’ Thierry Henry, as best placed to be the highest goal scorer and raise the trophy at the end of this summer’s tournament. In fact, Dutch forward Ruud Van Nistelrooy is placed ahead of Ronaldo and Ronaldinho.

For this index methodology, the goal scoring totals for 12 of the world’s most proficient goal scorers is divided by the number of games each player played.

This analysis spans approximately four years, beginning from the 2002 World Cup and includes every game played through, to Barcelona’s recent Champions League victory over Arsenal.

Fortunately, there are no two opinions on who the World Cup favourites are - the Samba country, Brazil. The analysis further shows that Brazil and Germany are clearly the football powerhouses.

But will England and Argentina throw up surprises? For all the answers, watch the July 9 finals.

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