All eyes on a Euro cup chock full of euros

PROFITABLE: Every game the Turkish national team plays at EURO 2008, which starts Saturday, is expected to contribute around 42 million euros to the economy.

European Football Championship 2008, which will kick off next Saturday, raises hopes concerning its impacts on local and global economy. It is estimated that each game Turkey plays at EURO 2008 will contribute around 42 million euros to Turkish economy

TUĞRUL AKŞAR ISTANBUL – Referans

Thousands of football enthusiasts from all over Europe will flock to Austria and Switzerland this month while millions will sit at home in front of their televisions to follow the showpiece event of European football.

The European Championship 2008, or EURO 2008, to be co-hosted by Switzerland and Austria, begins Saturday. As the sport's biggest event after the World Cup approaches, its potential impact on the local, national and global economy has started to make mouths water. Like all participating countries, Turkey is expected to enjoy its share of the tournament pie, as an analysis reveals.

Just before the 2006 World Cup, three prominent international financial institutions – the Amro Bank, Union Bank Switzerland and Goldman Sachs – published projections of the Cup's impact on the global economy. No such detailed report has been drafted on EURO 2008; however, a brief MasterCard survey paints a possible financial picture of EURO 2008.

Football, once just a game, has become a socio-economic force to reckon with. Football has definitely become “big business.”

Turkey will be competing in the European Championship finals for the second time. Every game the country's 11 plays at EURO 2008 will contribute around 42 million euros to the Turkish economy, according to research conducted under the supervision of Simon Chadwick, sports economy expert at MasterCard. The tournament's total contribution to the European economy is expected to reach 1.4 billion euros.

The survey delves into increases in ticket, food and drink sales, travel, trade, sponsorships and advertising revenues, and positive local, national and global economic impacts that may accompany a rise in the use of telecommunications and new media services.

Revenue from the most profitable matches is expected to be amount to around 49-56 million euros per match. With total revenue of 168 million euros, the Group C France - Italy (Zurich), Holland - France (Bern) and Italy - Holland (Bern) matches, are expected to provide the greatest spike to the economy.

Other matches expected to yield high revenues are Switzerland - Portugal (Group A), to be played in Basel; Austria - Germany (Group B) to be played in Vienna, and Spain - Russia (Group D), to be played in Innsbruck.

The Germany-Italy, Germany-France and Germany-Holland games are likely to supply the highest first-round revenues.

“Matches played in the later phases of the championship will provide higher economic yield,” said Chadwick.

Although Chadwick expects the teams to contribute around 42 million euros per match to their respective country's economy, other calculations reveal that the Turkish national team will contribute 209 million euros to the country's economy, including external impacts.

Within this framework, the team's direct or indirect contribution to the national economy may reach 34.9 million euros per match, should it go on to the finals.

The 2002 World Cup provided Turkey's textile sector some $50 million in revenues through sales of uniforms, flags and other logo products. That figure is expected to climb to $70 million during this tournament. The entertainment sector is expected to gain approximately $5 million from giftware on national team and tournament as well as PC games, DVDs and Play Stations.

Boom in electronics and communication

TV and satellite sales, which boomed in 2002, provided approximately $75 million to the electronics and communications sectors. At least $100 million is expected to flow into the sector this time around, thanks to plasma TV and satellite sales.

TRT (Turkish Radio and Television Corporation), which received tournament broadcasting rights for $10 million in 2002, obtained advertising revenue worth $15 million. This time, official tournament broadcasting rights belong to ATV and Digitürk.

During the 2002 World Cup, around 2,000 people from Turkey visited tournament venues South Korea and Japan. Considering the proximity of Austria and Switzerland, this figure is expected to climb to 20,000. This activity is expected to yield approximately $5 million for tourism agencies and travel tours. Around 3.5 billion people watched the 2006 World Cup. The 2006 World Cup creates macro added value of $10.5 billion euros in just one month. Considering the $35 million Turkey's Culture and Tourism Ministry allocated for Turkey's promotion in 2004, advertising revenues of at least $50 million should be generated this year. The trade volume of the communications sector is expected to reach $5 million at minimum particularly due to the mobile phone sales.

National team participation in EURO 2008 should yield Turkey some $285-300 million. The macro impact of the tournament on the country, which has a $482 billion GNP, should be eight per 10,000.

Germany, if not Turkey

In case Turkey fails to go all the way to the cup, the best candidate for the economy seems to be Germany. A possible triumph of Germany, which has a population of 82 million, may trigger domestic consumption in the country, fostering external purchases. This development may provide an opportunity for Turkey in terms of additional foreign trade revenues.

Italy's winning is also likely to create positive results for the economy. Italy, which expects 1.5 percent growth this year, may grow 2 percent should it receive the cup. While the situation is not bright for the United States, growth in the Euro Zone is ongoing. Within this framework, EURO 2008 will be a relief for the Euro Zone, albeit not as much as in 2006. If Germany becomes the winner of a possible Italy-Germany final, it will be beneficial both for Turkey and Europe.

Russian revolution in football

It is observed that the economy of a country that wins the cup grows by 0.5 or 0.7 percent on average while the economy of a country that loses shrinks between 0.1 and 0.3 percent on average. There is also a correlation between the economies of the emerging countries and their success at football.

Russia, over the past 10 years, has participated in a European Football Championship just once, in 2004. The country has recently experienced economic growth and witnessed an increase in overseas tourism expenditures and football. A possible increase in Russia's monetary power may make it a dominating figure in the world football scene.

It is not a coincidence that Russia climbed from 13th to sixth in the UEFA rankings, and from 30th to 25th place in the FIFA rankings. Russia may obtain a significant competitive power in football due to the allocation of a small fortune to transfers. The increase of social prosperity as well as the increase of funding for football may make Russia the European and world leader. The actual impact of the growth in Russia, however, is likely to be visible more during Euro 2012.

Turkey to gain:

-Around $100 million from the sale of at least 100,000 TVs

-Approximately $70 million from textile products, such as uniforms and flags

-Broadcaster's advertising revenue worth $15 million

-Promotion opportunities of at least $50 million

-Some $5 million from travel agencies

-National team tournament revenue worth $10-35 million

-National team sponsorship revenue worth $15 million

-Around $5 million from the communication and mobile phone sector

-Some $5 million from giftware and PC game sale

-A total amount of approximately $285-300 million

(The aforementioned figures have been calculated in line with 2002 and 2006 World Cup data.)

Economic outlook of 16 countries

*Total gross national product (GNP) is $12.1 trillion

*They create 23 percent of all global income

*Average per capita income is $24,000

*Germany is the top in terms of GNP with $2.8 trillion

*Romania has the lowest income with $80 billion

*With an annual rate of 7.7 percent, Romania is the fastest-growing country

*Average inflation is around 3 percent

*Russia has the highest inflation with 9.7 percent

*The lowest inflation rate (1.1 percent) is enjoyed by Switzerland, Holland and Poland

*Croatia looms large in unemployment with a jobless rate of 17.2 percent

*Italy, with 106.7 percent, has the highest public debt.

*Spain has the highest current account deficit with $106.4 billion.

*The most valuable team ($575 million) is in Italy

*The average value of all countries is around $257 million

*Turkey's value stands at $176 million

Inform,02.06.08