Interesting piece in the Telegraph. Apparently if England don’t make it into Euro 2008, it wouldn’t just mean a summer off from all that football nonsense and Steve McClaren out of a job: according to the headline an “English defeat would add up to £1bn loss”. Really? Where is this coming from?
According to one study, by the Centre for Economic and Business Research, based on an examination of the impact of the 2006 World Cup and Euro 2004, the effect of non-qualification could be as much as £1 billion.
Sadly, the basis for this huge figure is hard to dissect, as the report isn’t on their website. But the Telegraph summarises some of the main points. The impact would be in advertising revenues, drink sales and betting – as much as £300m was spent in advertising during the 2006 World Cup, and Euro 2008 would give pubs etc a £285m boost.
So where’s the loss? Can’t see it yet. All we are looking at here is expected increases that might – or might not – happen. As far as I remember, that’s not a loss. It’s a fall in expected profits. Profit warnings aren’t much fun, but they are different to a loss. In each area money will still be spent: advertisers will display adverts in the matches, they will just be charged less; people will still go to the pub to watch France vs Portugal, they just won’t drink as much; people will still bet.
In short – money will be made, just not as much. If I promise to give you £100 for getting an A in an exam, but £50 for a B or less, if you get a B you’ve still made money.
But “less money will be made if England lose” isn’t such a good headline, is it?