As we approach the start of the 2015 Rugby World Cup, sports fans can begin to get excited about the tournament ahead and cheering on their native country in the hope of lifting the Webb Ellis trophy come October 31st. The competition has never been so fierce, as current champions New Zealand look set to defend their crown against tough opposition – the likes of England, Australia and South Africa are all looking like potential challengers.
Although the six week spectacular, taking place across the length and breadth of England and Wales, is set to bring Rugby Union to the forefront of the sporting world, it isn’t just the fans who can benefit from such as mainstream event. The financial impact that a World Cup tournament has can be hugely significant, through the sponsorships involved.
The tournament is to amass an output of around £2.2billion, with all factors taken into consideration. Almost everything relating to the 2015 Rugby World Cup will have a partner or sponsor - the balls, kits, drinks, television coverage and food outlets are all backed by specific industry powers to help promote their brand, in an attempt drive more revenue.
However, by sponsoring such an event, the companies are able to gain more coverage of their brand, thus giving them an increased footing in the stock market. With 14 main sponsors from a variety of different industries, over eight countries and six stock exchanges, all those involved will be hoping to see an increase in share prices.
One of the major coups of the sponsorship package was from Heineken, as they managed to secure the exclusive rights to all the beer sold within the stadiums and associated bars, including fan parks. By being the main provider of alcoholic beverages to an expected 460,000 from outside of England and Wales – plus the large number of home fans – Heineken's position on the stock market is set to increase massively through raising brand awareness and the sales they will make during the competition – something which Forex are currently monitoring.
Unlike Heineken, who will be seen as a constant through the tournament, the kit sponsors for each country may not gain the sales and awareness their brand seeks as the team may get knocked out at an early stage of the competition.
Take Nike for example - the only team they sponsor is Argentina, so if the country goes out in the group stages, shirt sales and exposure may not reach the heights that were expected to, thus share prices not increasing as wished. Yet if England were successful in the World Cup and – dare say it – reached the latter stages, the sales in Canterbury shirts would go up and the company would see an increase in revenue, as the spectatorship would sky rocket leading to more fans wanting an England shirt.
The success of a nation within the tournament can also have a huge effect on a country's market, helping to put them in a much better financial position. After England's heroic win in 2003, the FTSE 100 and pound sterling saw a huge rally and radically improved the state of the country's place on the world market. And after a difficult financial period over the last decade, a boost to the GBP's exchange rate and the United Kingdom's finances would be welcomed by the Chancellor of the Exchequer, George Osborne
The 2015 Rugby World Cup may have losers, in the sense of countries taking part, but for the main sponsors there will certainly be some winners, as they hope the tournament will see them rise up the stock markets and become a market leader. Not only that, the competing sides will hope to prolong their stay in the tournament, to bring add financial benefits into their national purses.
