Europeans Would Add to Austerity Pain for Soccer Glory
We’ve come to expect it from the likes of Roman Abramovich, the Russian business tycoon and owner of Chelsea soccer club. But few people expect the average cash-strapped European to pour money into a game of soccer to see little or no return on their investment. Besides victory and glory, that is.
Yet a new study by Dutch bank ING shows a third of Europeans would sacrifice money in return for the glory of their team winning the UEFA European Football Championship this summer.
“Thirty-three percent of the 16,000 people aged 18 and above polled by ING would give up 297 euros ($368) on average to see their team win the coveted football trophy," the study said.
ING, which sponsors the Dutch national soccer team, surveyed 1,000 people in each of the 16 qualifying countries.
“Football exposes some fascinating economics lessons. Importantly, football can highlight strengths and weaknesses in the way people make decisions. We can, in turn, apply these to our lives, including the way we save, invest and manage money,” ING senior economist Ian Bright said in the report.
Respondents in peripheral European countries – which have been accused of being profligate spenders – were willing to spend the most in return for a victory.
“In the spending league, Ireland scored top, with the total respondents from that country willing to give up an average of 295 euros in return for their team winning the tournament,” the study said.
Greeks were prepared to part with 187 euros and Italians with 167 euros.
“Northern European countries, by contrast, are below average: Germany 65 euros, the Netherlands 39 euros, Sweden 34 euros and Denmark 23 euros,” the report said.
The European soccer market has remained resilient in the downturn and expanded by 50.3 billion pounds ($87 billion) last year despite economic turmoil across the region. Attendance remained strong even as fans faced higher costs and a worsening economic outlook.
The British Premier League grew 12 percent in 2010-2011, Mark Roberts, senior consultant for the Sports Business Group at Deloitte told CNBC.
That league is about 40-45 percent bigger than its nearest competitor, the German Bundesliga, he said.
“Some of the growth that we’ve seen in the Premier League revenues this year has been fueled by overseas broadcasting contracts,” he said.
More and more clubs are also taking their teams over the United States on pre-season tours in an attempt to tap into a new fan base.
But Deloitte says many clubs still have some way to go to achieve a sustainable balance between revenue and costs.
“The Premier League growth of 12 percent was outstripped by the growth in wages which went up by about 14 percent,” Roberts said.
Investing for the glory of a victory could lift the spirits and boost solidarity at a time when that fundamental value of the European Union seems to almost have dissolved.
“Football doesn’t only mean sacrificing money and time in Europe. The beautiful game also creates masses of positive feelings – if things go well. Six in 10 (61 percent) Europeans feel proud if their national team wins. And 60 percent see solidarity increase in their country,” ING said.
But those who are tired of the volatility in traditional markets and want financial returns out of the game should probably think twice.
The Stoxx Europe Football Index, which covers all football clubs that are listed on a stock exchange in Europe or in Eastern Europe and Turkey is down over 10 percent year-to-date and down over 37 percent year-on-year.