HAPPINESS OVER MONEY? How Much Is a World Cup Actually Worth?
How much is winning a World Cup actually worth?
This year, it would seem that it is more valuable than ever. But is money more important than happiness?
When measuring economies these days two factors are generally considered, money and happiness. A “Happiness Index” is a tool that has been developed to measure the gross national happiness of a country, and in recent times it has become a more accurate tool than by measuring the old GDP.
As the 2010 World Cup continues with its fever around the globe, FIFA has set aside some N$2,8billion for the total prize money. A huge amount you will agree, especially when you consider that the prize money on offer in 2006 was only N$1.5billlion.
The 2010 Fifa World Cup winners will receive N$200 million for becoming champions; the losing finalists will take home a miserable N$158 million.
Third and fourth, so oft dismissed as meaningless places, will take home N$135 million and N$124 million respectively. Losing Quarter-Finalists will be awarded N$90 million each while teams exiting in the second round will receive N$62 million each, leaving teams who were knocked out in the first round leave with their tale between their legs carrying N$56 million each.
In addition to that, each of the 32 teams on show will receive N$6m each for expenses incurred during preparation for the month long tournament.
This money will go some way to keeping the competing teams happy, and knowing that club sides from all over the world will be represented, FIFA has also set aside N$282 million for them, too.
The way their payments are structured is that from 15 days before the tournament commences until one day after the player exits the cup, clubs will receive N$11 000 for every day a player is there. Meaning that the minimum that any team will receive for one single player is N$288 000.
This is in exchange for clubs not suing a national team should a player be injured.
So the monetary success of a team in the tournament can be measured, and the further a team progresses the happier its people will be.
This has far more significance back home where parties in streets and public houses alike are likely to happen. Should a team progress, then their advancement will become a national topic and people who would not normally be football fans will become one as the nation looks on expectantly.
Days of sporting importance have long been linked with the happiness of a country.
Simple measurements can be taken to see how the day affected the general populace. For example, birth rates usually rise after moments of national significance. The birth rate in Barcelona rose by an incredible 45 percent after Barca won the Champions League in 2009.
Another simple measurement is suicide. Statistically, it is proven that suicides drop in times of mass public interest in sport. Not because sport all of a sudden becomes more important, but the public inclusion of people who normally find themselves marginalised prevents suicide from happening.
Money, of course, is an important component in making people happy. But it takes a whole change in class before that happiness can really be measured, for most status is what is important.
And that is where happiness can really be measured. People will be happier the further their team progresses, the players will be happy, too.
But just how much is a FIFA World Cup slot worth?
A European expert, Dr Nikolaus Eberl says many analysts are wondering just how much the highly coveted slot at the FIFA World Cup is worth in economic terms. Fortunately, recent events helped shed light on this issue, when France’s Thierry Henry’s handball helped France beat Ireland to reach the world cup finals.
Henry’s handball meant that Ireland’s economy, already mired in the deepest recession in Europe would lose out on about N$1.1billion.
At the same time, it ushered in a spending spree for the qualifying nation, France. Economists say reaching the world cup extravaganza in South Africa is worth £1billion to a nation the size of France.
There is a ripple-out effect into areas that are directly related, such as sports betting and magazine publishing. But it will ripple out even further to electronics retailers and manufacturers, because people tend to buy more televisions around tournaments too. It’s a psychological issue - sporting success makes people feel more optimistic generally and predisposed to buying.”
Punters in France will also pour money into kits, sticker albums, tickets and travel, he added.
France got a boost around the tournament, with extra sales of some goods and people flying in and out of the country. There’s also the general feel-good factor to an economy of people just feeling better - better morale.”
“When people are down, they don’t like to spend”
Wrote Michael Deacon from the UK’s Telegraph: “There’s nothing a supermarket chain, for example, loves more than a World Cup, because sales of booze and food go through the roof - and every other business in the land starts shamelessly using the event to market its products (seven months before the 2006 World Cup kicks off, Mars was already running a TV advertising campaign explaining how its chocolate bar will power England to victory).
Instead, Thierry Henry’s cheerful cheating knocked a nation (Ireland) down. And when people are down, they don’t like to spend.”
Evidence from previous tournaments also shows that, at another level, worker productivity normally increases as their national team progresses through major tournaments and the ‘feel good factor’ takes hold.
SA’s credit rating at stake
Provided the hosting team does well, a euphoria induced spending bonanza by South Africans and visitors alike could usher in the much-needed recovery of SA’s economy and at the same time push up investor confidence as much as it did in 2002 for hosts Korea - whose credit rating by Moody’s Investors Service and Fitch Ratings was upgraded as soon as the final whistle was blown.
Late nights in the Far East
People will go to extraordinary lengths for football. But there is a massive segment of supporters - bigger than any touring group - who make sacrifices to their jobs, relationships and health for the sake of football, who deserve some recognition for their efforts. These are the Asia-Pacific football fans.
From Seoul to Sydney, football lovers are undertaking their quadrennial tradition of staying up until unholy hours of the night and early morning to watch as many World Cup fixtures as possible.
On the east coast of Australia, the matches in South Africa will kick off at 9:30 pm, midnight or 4:30am. The slight differences for New Zealand and Asian-based brethren don’t make for much prettier reading. That’s a lot of late nights and/or early mornings. They experience a major drop in productivity in the workplace and our general health will take a beating as we shift onto a diet consisting mainly of junk food. World Cup organizers said they have delivered on all their promises as ticket sales are approaching the record set at the 1994 tournament in the United States.
“We are closer and closer to the best World Cup ever in terms of ticketing, which was USA in 1994, so it’s an amazing result in South Africa,” FIFA secretary general Jerome Valcke said.
About 3.6 million tickets were sold for the 1994 tournament.
Valcke expressed Fifa’s satisfaction with the fact that the percentage ticket sales for the Fifa 2010 World Cup have surpassed that of Germany 2006 and it is edging closer to the 100% mark of 1994.
Approximately 2.9 million tickets were put on sale for this year’s World Cup.
Fifa will pocket the vast majority of the money raised by the sale of media rights and global sponsorship deals as well as some of the income from ticket sales.
South Africa, on the other hand, will be paying the costs.
History suggests a different outcome. For example, Japan’s gigantic infrastructure programme for the 2002 World Cup, for one, barely shifted its sluggish economy. The 2000 Sydney Olympics, it was argued, would transform future visitor numbers to the city but they have remained static. Then, four years later, the Athens games were going to be put on for N$11 billion that ended up costing 10 times as much.
Fudging the figures
Economists who have tried to quantify the impact of these occasions on job creation have found that there are almost no long-term employment benefits. In 2004, when Fifa awarded the tournament to South Africa, consultants Grant Thornton predicted costs of just US$300m (N$2bn) on stadiums and infrastructure and a boost to gross domestic product of N$22bn.
Today the total bill for the World Cup has risen more than tenfold, to almost N$30bn.
In Portugal, which built 10 stadiums for the 2004 European football championships, Augusto Mateus, a former economics minister, argued that the most sensible thing to do with many of these buildings is to pull them down and start again.
The opportunity is however there to reshape global perceptions of South Africa - and possibly the rest of Africa - and the theory is that this could be rewarded by higher flows of capital, skilled workers and tourists.
What then is left of the economic case for hosting the World Cup? Well, happiness could play a crucial part.
The theory is that investing in projects that create a rarely experienced but precious sense of national purpose, and collective identity, is good value, best value.
The snag here is that all the work on happiness so far has looked at richer nations. Hosting Africa’s first World Cup has already provoked a wave of national and continental joy that seems infectious.
The World Cup is therefore more about happiness than money.PF