Italy Damage in Soccer World Cup Miss Seen About 1 Billion Euros
(Bloomberg) -- Italy’s failure to qualify for the soccer World Cup finals for the first time in 60 years may cost the country about 1 billion euros ($1.2 billion), the former chairman of the national federation said.
“It’s not only about missed advertising sales, television rights and merchandising related to the event,” Franco Carraro, a senator of former Prime Minister Silvio Berlusconi’s Forza Italia party, said in an interview about the impact of the elimination from next year’s event in Russia.
“There is much more to it, including the missed sales for travel operators organizing holiday packages to Russia, let alone the turnaround of betting companies and of bars and restaurants across the country during the matches,” he said.
Italy will be absent from the FIFA World Cup for the first time since 1958 after a goal-less draw against Sweden in the second leg of European qualifiers on Monday that plunged the nation into mourning.
Many cost analyses of the Italian elimination, including by daily business paper Il Sole 24 Ore, focused on the expected lower revenue related to ad-sales during the televised matches and on the sponsorship of the national soccer selection in the years to come. They set the total bill at around 100 million euros.
According to Carraro, the failed qualification will have a longer and more costly impact on Italy and its economy at the same time it is showing signs of firmer recovery from a long recession.
“To start with, the team won’t play any official matches until the beginning of the qualifications for the next European Championship after the summer 2018,” he said. “That implies that other friendly matches will attract less interest and money at all levels, including sponsorship and television rights.”
Shares of Puma SE fell slightly on Tuesday after Italy, the four-time World Cup winner that’s sponsored by the German sporting goods company, failed to qualify. Chen Grazutis, an apparel analyst with Bloomberg Intelligence, said it’s reasonable to assume Italy’s absence could cost Puma up to 1.5 million in individual jersey purchases. “At an average price of about $80-$90, lost sales could reach $140 million in retail,” Grazutis said.
Puma said that it can compensate any shortfalls from the jersey sales and Italy’s absence from the World Cup won’t change its sales estimates.
At home the “frustration” with the elimination might weigh on consumer sentiment in the short term, said Carraro, 77, who last chaired Italy’s soccer league in the early 2000s after a stint as mayor of Rome. “After all, if even Berlusconi after many years as a successful owner of AC Milan sold the team saying today’s soccer requires a different business model, that might mean that for our sport it’s about time to change many things.”
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