Hearts, Minds and Bottom Lines
Fans and profits.
Whether it is Brazil’s five World Cup triumphs, Cuba’s Olympic boxing gold medals, the West Indies’ global dominance of test cricket in the 1970s and 1980s, or Argentina’s World Cup victories in 1978 and 1986, the passion for sports stretches across the Americas. For fans around the region, sports serve as an escape from their everyday lives, regardless of their politics or economic circumstances.
It should come as no surprise that the business world has noticed. In 2010, PricewaterhouseCoopers predicted that the money spent on gate revenues, sponsorships, media rights fees, and merchandising in Latin America will reach $3.1 billion by 2013, a 4.3 percent compound annual growth rate since 2009. Funds invested in sponsorships alone of teams, events and athletes will increase by 2013 to $817 million. Global sports spending, according to the same study, is projected to rise to more than $133 billion by 2013, from $114 billion in 2009. And global sponsorship monies are expected to reach $35.2 billion by 2013 from $29.4 billion in 2009, a 4.6 percent compound annual increase.
The figures make clear that sports have become big business in Latin America. And as Brazil prepares to host the world’s largest sporting events—the 2014 World Cup and the 2016 Summer Olympics—the business is about to get a lot bigger.
But do marketing firms really understand what drives fans? What shapes fans’ attitudes toward teams and individual athletes? Can these attitudes be harnessed to promote brands and companies? In today’s global sports environment, the quantification and measurement of attitudes toward sports represents a high-stakes enterprise—and a competitive one.
It’s no surprise that Brazil, preparing to host two of the world’s biggest sporting events, has become a test laboratory for marketers.
More Fuel to Brazil's Roaring Economy
Brazil’s hosting of the 2014 World Cup and the 2016 Summer Olympic Games makes its major marketing centers, Rio de Janeiro and São Paulo, the bullseyes for global marketers seeking to establish or expand their consumer base within this rapidly emerging economy.
According to a 2010 study by Brazil’s Ministry of Sports, hosting the World Cup will add some $105 billion to the nation’s economy between 2010 and 2019, including $18.7 billion in infrastructure improvements and $9.4 billion in tourism spending from the more than 600,000 foreign tourists and 3.1 million Brazilians expected to attend the matches.
In addition, the events will help create more than 700,000 jobs in Brazil, some 330,000 of which are expected to be permanent.
Then There Are the Olympics
Brazil’s Ministry of Sports estimates a $19 billion impact through 2016, with a $57 billion long-term injection to the nation’s economy, taking into account indirect investments and their long-term effects.
The ministry also claims that the injection of $14.4 billion for the Olympic Games’ preparations will pump $51.1 billion (102.2 billion reais) into the Brazilian economy between 2009 and 2027.
A study recently commissioned by the Brazilian Ministry of Sports and conducted by the nonprofit organization Fundação Instituto de Administração estimates that for each dollar invested in preparing for the Olympic Games, private entities will invest $3.26 in production chains related to the events. The industries that expect to reap the biggest benefits from pre-Olympics investments range from construction, real estate and services, to oil and gas, transportation, and information and communications technology.
The investment associated with staging the events will create approximately 120,000 jobs annually through 2016, according to a 2009 study conducted by the University of São Paulo Institute of Administration for Brazil’s Ministry of Sports...