The stage has long been set for soccer’s FIFA World Cup that kicks off in Russia later on Thursday. Investors and analysts have already factored in the potential benefits for the likes of brewers, retailers and advertisers. So what opportunities remain?
For the likes of betting and pub companies, match results in the month-long competition are likely to have some influence on their financial performance. While bookmakers would benefit from a run of upsets and tied games, too many victories for favored teams such as Brazil would be a setback. The longer that England stays in the tournament, the better for British bar operators. Should Australia surprise, expect a boost for that country’s Domino’s Pizza Enterprises Ltd. And the winning team’s uniform supplier will also likely get a benefit.
“The winners from this competition are typically well established, with supporters more inclined to visit pubs for big games, or play host at home, driving up sales of big screen TVs and alcohol,” Joshua Mahony, a market analyst at IG in London, said in an email.
Here’s a round-up of sectors that are likely to be affected.
Betting
The tournament will provide fertile ground for bookmakers such as Paddy Power Betfair Plc, GVC Holdings Plc and William Hill Plc in a race to recruit online customers. Though the main influence on short-term financial performance is likely to be the outcome of the games themselves. Should favorite Brazil lift the trophy on July 15, bookmakers could be left nursing hefty liabilities. With most of the big publicly-traded betting companies based in the U.K., victory for England would also prove costly.
The volume of bets placed on the event is set to soar, with smartphone apps making wagering easier than ever before. The Betfair betting exchange has reported “strong levels of activity” in the run-up to the tournament and expects to take 2.5 billion pounds ($3.3 billion) of wagers. Australia’s Tabcorp Holdings Ltd. may see a revenue gain of up to A$140 million ($106 million) from the competition, more than the A$126 million from Brazil 2014, according to Andrew Orbach, an analyst at Taylor Collison.
By contrast, the World Cup may be a short-term negative for industries like casinos that stand to lose out when gamblers’ attention and money shift elsewhere. During the last competition in 2014, Macau’s gross gaming revenue declined in both June and July and didn’t pick up even after the tournament ended. Deutsche Bank last week trimmed estimates on Wynn Resorts Ltd., saying the World Cup “could cause some VIP softness in June.”
Pubs
Pubs in countries whose teams progress to the tournament’s later stages stand to gain from hosting throngs of jubilant fans. Disappointment caused by an early exit is likely to have the opposite effect. According to Berenberg analysts, the World Cup will be a boon to U.K. pub operators such as Greene King Plc, with the brokerage estimating that some may see a 2 percent to 3 percent boost to like-for-like sales for the quarter.
Sports Gear
The maker of the winning team’s uniform can expect a short-term boost from sales of replica shirts. At the last World Cup in 2014, Adidas AG sold more than 8 million jerseys, including 2 million in the colors of winner Germany. In Russia, Adidas is sponsoring 12 of the 32 teams, including perennial powerhouses Argentina, Spain and Germany, with arch-rival Nike Inc. supplying 10 teams including Brazil, Portugal and France. After Italy’s elimination in qualifying, Puma AG relies on Senegal, Serbia, Switzerland and Uruguay.
Sporting-goods retailers such as Dick’s Sporting Goods Inc., JD Sports Fashion Plc and Sports Direct International Plc can also anticipate a brief bump to sales as the tournament stokes demand for soccer gear.