Goooaalll! These Firms Are Scoring Big at the World Cup
As the World Cup hurtles toward its conclusion, the cash registers are starting to ring louder. It's no wonder -- the tournament is unarguably the most popular sporting event on the globe, and its economy is massive.
That applies not only to FIFA, which that runs the every-four-years global soccer tournament and stands to rake in a total of roughly $4 billion from various revenue streams. The World Cup's business ecosystem also includes a host of prominent companies. Here's a look at a few.
Disney
At first blush, soccer isn't a sport that lends itself to TV advertising windfalls. Unlike the big, break-filled American sports, "the beautiful game" is played in two uninterrupted halves. This only leaves room to pack in ads at halftime and before and after the contest.
But the event's audience is huge -- all told, more than 18 million watched the English-language telecast of the U.S. side's heartbreaking tie with Portugal during the group stage match on June 22.
That audience has become more desirable for advertisers competing for those limited slots. This is a boon for media giant Disney (DIS), which is broadcasting most of the matches on ESPN and will air the final Sunday at 3 p.m. Eastern time on ABC.
Earlier this year, Disney said interest from advertisers was strong, leading it to predict "significantly greater" sales when compared to the 2010 World Cup (for which it also held U.S. broadcast rights).
That's saying something -- ESPN booked a 31 percent climb in ad revenue for the quarter the 2010 tournament was broadcast. We can probably expect a comparable pop -- at least -- from Disney for this quarter as well.
Nike/Adidas
Even the toughest World Cup matches have nothing on the bruising fight between sports outfit monsters Nike (NKE) and Adidas (ADDYY). The two companies are almost neck-and-neck in what's possibly the most visible advertising medium of them all -- team apparel.
%VIRTUAL-article-sponsoredlinks%Of the 32 sides in the World Cup, 10 teams sport Nike's "swoosh" logo, including perennial powerhouse Brazil and the United States. And Adidas has also gone native, sponsoring the German national team, plus 2010 winner Spain (eliminated in the group round), top contender Argentina and six others.
Both companies will almost certainly do brisk business in replica player jerseys. In addition to sponsoring teams, they also have numerous deals with star players.
In the big-ticket match between the two, though, the smart money is more likely on Nike, which is spending its sponsorship money purely on teams and players. This will help the company save money for the more active marketing it favors. Contrast that to Adidas, which is reportedly shelling out something between $25 million and $50 million a year to be a partner for the entire tournament, in addition to sponsoring a raft of teams.
Ambev
Brazil, the 2014 World Cup's host country, is Latin America's top consumer of beer -- by far -- in total volume. Ambev (ABEV), which commands 68 percent of the Brazilian market, stands to gain handsomely from its fellow citizens either drowning their collective sorrows or celebrating their team's fortunes in the tournament.
That should help the company maintain the good earnings momentum it's enjoyed lately; in its most recently reported quarter, Ambev's net sales rose by nearly 17 percent on a year-over-year basis to just over 9 billion reais ($4.1 billion). Bottom line, meanwhile, advanced by 9 percent to 2.6 billion reais ($1.2 billion).
Ambev's victory in the tournament will be an international one -- the company is majority owned by global megabrewer Anheuser-Busch InBev (BUD). Brazil accounts for nearly one-quarter of Anheuser-Busch InBev's revenue.
Motley Fool contributor Eric Volkman owns shares of Walt Disney. The Motley Fool recommends and owns shares of Nike and Disney.
