Here’s How Soccer Affects the Economy?
One of the greatest advantages of soccer is the economics of the game. So, how does soccer affect the economy? We have the answers.
Soccer impacts the economy through the high salaries that players get, revenue from soccer sponsorship, revenue from broadcasting, and income from FIFA grants. In addition to that, the entire football circle creates employment.
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How Does Soccer Affect the Economy?
The 2022 FIFA World Cup Soccer commenced on 20th November in Qatar and the US soccer team was among those that qualified. Popularly known as soccer in the US, football plays a huge role in the country’s economy, and therein comes a lot of benefits, both tangible and intangible, and both directly and indirectly.
The US has staged the World Cup before in 1994 and is privileged to be among the three countries that will host the 2026 World Cup. During the 1994 world cup competition, the US national team was as well the country ambassador showcasing the country to the world. Come 2026, the national team will be selling the name of the country to the world, thereby enhancing the visibility of the country to the world. Even without the world cup, the economic role of soccer in the American economy cannot be under-estimated.
Beyond being an enjoyable game with lots of fans worldwide, soccer can be monetized to generate revenue. For instance, US players like Christian Pulisic are earning millions of dollars every year playing for Chelsea. Observation on human behavior shows that individuals are likely to invest in their home countries due to the protection that countries give to their citizens, for instance, very few restrictions on what one can invest in.
With this, it’s clear that soccer is more than an entertaining sport. Here, we will explore the economic impacts of soccer.
Economic Impact of Soccer Sponsorship
Interestingly, soccer has been deemed a corporation since it closes on deals that have financial implications. Most soccer teams get financial support from large and renowned corporations to meet their objectives. The sponsors make commercial deals with soccer teams; whereby, the soccer team prints the logo of the sponsor company to promote their products or services. This makes football players a walking advertisement.
Brands and marketers are taking advantage of the growing popularity of soccer and the association of businesses with clubs in the US to promote their work. Most of these brands are dedicating their budget and resources to create content that will appeal to soccer teams and mainstream sports. Countries are not left behind in their interest to promote themselves by putting money into football giants.
Most soccer clubs make money from broadcasting revenue. This is where broadcasters go through a tender process to acquire the official broadcasting rights of football league games. The broadcasting revenue is then split between the participating teams. Most clubs are now shifting from the sale of tickets to broadcasting as their primary source of revenue.
This is because the number of viewers following matches on television has significantly increased.
The 2014 FIFA World Cup, which was held in Brazil, generated revenue amounting to US$537 million from the sale of broadcasting rights. In the US, Fox Sports bought the rights to FIFA World Cup through 2026. Others like Apple TV+ got broadcasting contracts for national soccer competitions like Major League Soccer and MLS Next Pro.
Overall, broadcasting rights has helped add value to the US economy tremendously. Furthermore, teams can use the finances derived from broadcasting to attract talented players that will take the team to another level. What’s more, the internet is also contributing to the growing popularity of soccer in the country. Most clubs are leveraging the internet to market their products, merchandise, and game tickets, making it a huge revenue generator for the economy.
Create New Employment Opportunities
As much as the US soccer brings excitement to fans worldwide, it provides great earning opportunities for players and businesses as well. Soccer has employed many players who play for local clubs in the US. The US Major Soccer League contracts players and each MLS team have an annual budget. Additionally, FIFA contributes toward players’ salaries and to its member teams.
Closely connected to this is the philanthropic acts that football clubs engage in. By donating millions of dollars, football associations can improve the quality of life of the recipients. Humanitarian actions create job opportunities as the donors seek to realize optimal benefits to the recipients and at the same time, enhance sustainability. For instance, FC Dallas Foundation is very keen on helping people of determination, in order to help them navigate the mental and physical challenges that they could be facing.
Besides soccer sponsorship, the other way soccer contributes directly to job creation is through local vendors selling goods and merchandise to the people in and around the stadium. Hotels, restaurants, and tourist attractions are more likely to make more money when people flock during tournaments and other sports events. For a new experience, cinemas and movie theaters show live soccer games during big tournaments, which injects profits into the entertainment industry.
Likewise, the economy is boosted through the production of games and memorabilia. Every year, game producers add video games to the FIFA series that fans throughout the world. Not to mention the job creation and financial success that memorabilia like popular jerseys create. For instance, Manchester United sells a whooping 3 million jerseys every year.
Access to FIFA Grants
FIFA is an international governing body of the global game soccer. The US, being a member of FIFA, greatly benefits from its Financial Assistance Programme. Each year, this prestigious sports organization distributes $250,000 in grants to all its 209 members. The members also benefit from the profits made during World Cup games and gain access to funds to complete specific soccer projects. The massive amount that FIFA injects into the US economy can make a huge impact not only in the soccer industry but the entire economy as a whole. The FIFA grant is a very fair funding opportunity, and all one needs is to abide by the rules of the organizations.
Access to Public and Private Funding
States and cities in the US are injecting millions of dollars in public and private investment in preparation for the 2026 FIFA World Cup games. For instance, Texas’ tax-funded program is designed to help local organizers and the hosting cities cover any event-related costs for the World Cup.
Other states like Philadelphia and Denver have raised private funding to cater to the hosting costs. These investments will without a doubt increase the revenue generated from hosting the event. This is particularly true for industries like construction since millions of dollars are pumped into stadium renovations.
Impact of Soccer on Qatar’s Economy
The World Cup has a significant impact not only on the global economy but also on the host country’s economy. FIFA granted the hosting rights of the 2022 World Cup to Qatar and this decision is believed to transform and benefit most of the country’s industries. Millions of fans traveled to Qatar to witness their favorite teams play and this has had a positive impact on restaurants, hotels, transportation, tourism, hospitability, and entertainment, not mentioning the massive sports infrastructure that will be left behind.
Officials in this Middle East country predict more than one million visitors will attend the event. Also, it is estimated that $220 billion has been injected into the construction of a new city, new hotels, apartment buildings, and a modern metro system. According to Qatar, hosting the FIFA world cup in 2022 will generate at least 1.5 million jobs in industries like hospitality, construction, and real estate. The construction of infrastructure to accommodate tourists is expected to boost the economy both short term and long term. The country’s international profile is believed to rise, leading to increased foreign investment.
- Besides entertainment, soccer is a key contributor to the growth and development of the US economy.
- The US team sponsors are investing huge amounts of money into winning clubs with better players.
- Investment in football can help curb unemployment and can lead to improved quality of life.
- The biggest profit from soccer tournaments is derived from the sale of tickets and broadcasting rights.
- The tourism, construction, and hospitality industries are expected to benefit when the US hosts the FIFA World Cup in 2026.