The World Cup: the potential economic impacts in the United States

The World Cup, the biggest sporting event in the world, is set to take place in just two weeks, and the economic and cultural impacts will be tremendous. Although most studies analyze the effects of that the world cup has on the host city’s economy, this article discusses and compare the potential economic impacts in the United States and Spain.

The United States is set to miss its first world cup since 1986 much to the surprise of investors, businesses, and fans alike. Although the extent to which this absence will be felt in the economy is impossible to predict, many analysts and companies believe that viewership, ticket sales for the MLS, and advertising revenue will suffer dramatically. Fox News is set endure one of the biggest losses as this company paired up with Telemundo in 2011 and paid more than $400 million for the English-language broadcasting rights in the United States for the 2018 and 2022 World Cups.

“Hyperbole is the drug of choice these days in sports media but the [US’s failure to quality] is a disaster for Fox Sports. Disaster,” claims Sports Illustrated.

Without the United States, Fox has lost many of the casual soccer fans who would tune in only to watch their home team. Although Fox argues that viewers in the United States will still tune to watch some of the greatest players compete on the world stage, others seem doubtful. The four American games in the 2014 world cup accounted for almost 20 percent of ESPN’s total World Cup viewers.

Telemundo, on the other hand, is also expected to endure losses although not nearly as great as Fox. Mexico advanced to play in Russia this summer, and the four United States matches in 2014 only accounted for about 9% of total World Cup viewership.

In addition to Fox and Telemundo, companies such as Budweiser, McDonald’s, and Nike will also feel the impact of the United States’ absence. Budweiser and McDonald’s are major world cup sponsors, a privilege that ranges in cost from $10 to $25 million. These companies claim that they entered into these sponsorships due to the global scale of the World Cup, although the lack of American viewership is surely changing their marketing plans.

Nike, the official sponsor of the USMNT, will no longer be able to sell their 2018 World Cup jerseys. Whatever jersey Nike releases in the summer of 2018 will be a modest seller without the hype of the World Cup.

In addition to major corporations, small businesses will also feel the impact. Bars and restaurants across the country will lose out on major money-making viewing parties, especially in large cities. The conservative estimate for just 30 bars in one small city in Michigan totals to about $270,000 for the loss of revenue the bars could have made during watch parties for the three group play games.

Finally, the United States Soccer Federation and some of its players will feel the economic effects. As Forbes points out, the United States will miss out on the $12.5 million each team receives in addition to countless millions in advertising and sponsorship deals. USMNT player Christian Pulisic will experience some economic losses as he was set to be the star of the United States team this World Cup. He also will miss out on lucrative sponsorships and professional contract deals.

Overall the United States’ failure to qualify for the World Cup will prove disastrous for companies, players and fans alike. One can only hope that the United States will change in strategy in the years to come to continue to be a powerhouse in the CONCACAF league.