A bout of World Cup fever may have swept the nation last month but with normality restored, it is business as usual for the Premier League. Except that according to Will Tingle at Moore Stephens, the next season of the UK’s top football league is up for a little more than business as usual.

Premier League clubs are already reported to have spent close to £1bn on over 200 deals so far with a number of high profile transfers such as Riyad Mahrez moving to Manchester City and Alisson’s arrival at Liverpool setting a new transfer record for a goalkeeper. With steady investment already, we explore the reasons why it could be another record breaking summer for the Premier League.

Primarily, there is money to burn. Last year, for the first time, every Premier League club reported an operating profit, with 18 of the 20 clubs also reporting a pre-tax profit. Financial fair play appears to have ushered in a new era of sustainability. There are many reasons why clubs can expect a continuation of strong financial performance and revenue growth. This will in turn be used to fund their transfer war chests.

The domestic TV rights for the year is said to be just shy of the record-breaking £5.14bn existing deal, for three seasons from 2016-2019, with Amazon joining the Premier League market for the first time. The cost of the Amazon package to show 20 games a season from 2019 is still unknown. However, any dip in the domestic TV rights income is likely to be offset by an increase in overseas broadcast income as well as club’s own commercial deals.

The Premier League is reported to have made £3.2bn from international TV rights in the same three season period (2016-2019). Beyond this, five out of 80 contracts are said to have been confirmed to continue through to 2022: the Premier League will be optimistic they can continue growth in this area given that some of the new contracts are said to be as much as 14 times the value of current deals.

In terms of other commercial transactions, last season the Premier League introduced sleeve sponsorships, which allowed clubs to have a second brand on their kit in addition to the main shirt sponsors for the first time. Recently, Arsenal are said to have completed the biggest deal yet in this area for a reported £10million per season over three seasons with Visit Rwanda, the club’s official Tourism Partner. Notably Manchester United and Tottenham Hotspur are yet to agree sleeve sponsors which reflects the fact there is significant scope amongst several clubs to increase revenues through commercial partnerships of this nature.

What does all this money mean? As we have seen in the past, increasing revenue normally translates to growth in transfers and player wages. Although clubs are spending within their means, transfer spending has continued to rise over the years as clubs show little sign of tightening their purse strings with increased revenue making transfers more affordable for clubs and used as justification for record-breaking fees.

Premier League teams have now set a precedent for spending and there is great expectation amongst fans to do so. This has contributed to records being established at an alarming rate. Within the last 12 months, 15 of the Premier League sides for the 2018/19 season have broken their transfer record. Last summer, the total spend for the Premier League during the transfer window was beaten for a sixth consecutive year, coming in at £1.4bn. During the final day of the January transfer window alone, clubs made a record spend of £150m, marking a total spend of over £400m for the month.

There are two additional factors which will serve to add fuel to the Premier League money bonfire. Firstly, the transfer window will close earlier than normal as Premier League clubs voted in favour of closing the transfer window before the start of domestic fixtures. This means that clubs will be under increased time pressure and now have little over 2 weeks to conclude their business. This could possibly trigger a rise in the panic buys associated with the final few days of the window. A lack of time provides leverage to selling clubs in negotiations allowing them to attract higher fees for their players as buyers use money to solve problems when time becomes pressured.

The World Cup only adds to the haste given that many players, many of whom are still on holiday as part of their recovery programmes, wait until after the tournament to resolve their futures. Historically, the competition has led to irrational buying behaviour and overinflated fees as clubs have signed players off the back of a handful of good games. Kleberson, El Hadji Diouf, Guivarc'h… do the names sound familiar?

The precedent for all sides having a reason to spend is well established. Newly promoted sides and those fighting relegation are desperate to establish a foothold in the league given the rewards associated with survival. The riches of the Champions League provides sufficient justification for those competing towards the top to invest heavily.

Others are keen to scale up and compete with the so called top 6 or solely avoid a season of mid-table obscurity. With over £1.4bn spent last summer, Premier League clubs are well on track to break this record again. It promises to be a hectic finish before the transfer window closes on 9^th August.

England might not have made it to the final, which saw France and Croatia square up and France victorious, but the real winner of the 2018 FIFA World Cup has been Russia. The nation has seen a major boost in tourism interest, from the UK in particular, during the monumental tournament, reports CheapOair.co.uk.

During the first week of the football tournament, CheapOair.co.uk saw a major uplift in its flight searches to the host nation as figures came in 232% higher than the average weekly search volume. This momentum continued the following week, 17-23 June 2018, as the average weekly number of searches Brits made had peaked at 227%.

Similarly, throughout the pre-event build-up the flight search windows between 11-17 March and 18-24 March 2018 saw a significant increase, as potential bookers were searching 182% and 160% higher than the average weekly search volume.

This goes to show that the football fixtures were not only a cause for celebration amongst football fans but also for the Russian economy, as businesses in its numerous host cities for the games have benefited from an influx in British tourists.

(Source: CheapOair)

Cristiano Ronaldo may be out of the World Cup, but he certainly is not out of the headlines. With each passing year the football and financial worlds have become ever more entwined and the recent excitement around Ronaldo wearing Juventus colours has resulted in colossal movement in the markets. Below Carlo Alberto De Casa, Chief Analyst at ActivTrades, discusses the prospects and impacts of Ronald’s moves on the markets.

Juventus is one of three Italian team teams to be publicly listed on the stock exchange but as the biggest club in Italy by some distance, both in stature and in finance, it’s not unsurprising a move for the five-time Ballon D’or winner has caused a seismic shock.

The Old Lady of Turin has won the last 7 Serie A title in a row but has been missing the Champions League from its collection since 1996. Having lost 5 finals in the biggest European competition for clubs between 1997 and 2017, this is seen as a move to undo this spell.

On Monday evening speculation began that Ronaldo could be on his way to Italy. Juventus were trading at about 66 cents per share then. In just 3 days of trading the value of the shares jumped to a peak of 0.81, a new 5-month-high. Given that the club has more than 1 bn shares, the total capitalization of Juventus jumped by around €150 million.

On Friday, Juventus shares jumped further to 0.90, adding another 90 million of market cap and reaching a 16-month high, on levels seen last time when Juventus reached the final of Champions League in 2017.

Only 34% of the club is listed on the stock exchange however, and another significant increase of the value of the club was reported by Exor, the holding of FCA (formerly known as car manufacturer FIAT), who control the remaining 63.7%. Exor now says it is seeing a theoretical increase of their assets by around €400 million.

It’s also thought that FIAT will play a crucial part in this deal, paying a part of Ronaldo’s salary and using him as a testimonial for their cars. The exponential jump in the volume of shares is also staggering with around 15 million of shares traded yesterday and over 38 million by Thursday.

Of course, it might all be a risky investment. With shares that could continue their rally but could also quickly turn in the opposite direction if the “affaire Ronaldo” is not going to become reality. The market movement however is certainly helping to shift the balance of the company even if we are not talking in real cash money.

But what does this all mean?

Juventus will be hoping to make a large amount of money from this operation and the markets also believe that this could be excellent from a financial point of view, despite its huge costs. Once you account for marketing, the receipts from shirt sales and ticket prices in the stadium (prices for tickets at the Juventus stadium just went up by around 25-30%) its clear to see how with a little help from the markets, a transfer of this magnitude can begin to pay for itself. Pundits often discuss how much clubs are paying for players – but often forget to discuss how much a club can claw back in return.

Juventus mught need upwards of €200m to complete a deal for Ronaldo over four years. They are willing to pay him €30 million a year but once taxes are factored in it could be higher at maybe €55million. A four-year contract including his transfer fee of €100 million could therefore take this to an astronomical amount. The questions is – how much will Juventus actually end up paying?

Figure 1: The Juventus share price since speculation began.

With holiday season in full swing, people will either be looking to book something last minute or counting the days until they set off. Aside from dreaming of stunning beaches or culture-rich city getaways, there’s a good chance many of you will be imagining the prospect a nice relaxing beer abroad. On top of that, the world cup calls for a few more pints.

For those who enjoy a tipple on their travels, it’s good to know how much you’re likely to spend – especially in an unfamiliar place. Price comparison experts Money Guru have looked at 29 of the world’s most popular city destinations to produce an essential holiday beer guide.

Their research has identified that the cheapest pint is available in Prague where you’ll only be shelling out £1.17 per beer. At the opposite end of the scale, to get yourself a pint in Dubai you’re looking at £9 each.

Here is the rundown of the top five priciest and cheapest pints you’ll find across the globe.

Top 5 – Priciest Pints

• Dubai, UAE - £9
• Oslo, Norway - £7
• Hong Kong - £6
• Singapore - £5.94
• New York, United States - £5.32

Top 5 – Cheapest Pints

• Prague, Czech Republic - £1.17
• Johannesburg, South Africa - £1.63
• Taipei, Taiwan - £1.77
• Krakow, Poland - £1.79
• Rio De Janeiro, Brazil - £2.21.

Iconic tourist destinations like London (£5.19), New York and Paris (both £5.32) seem to be taking full advantage of their popularity by bumping up the cost of beer. Nordic countries also demand higher prices for pints with Copenhagen (£4.81), Stockholm (£5.14) and Oslo (£7) all sitting in the more expensive half of the leaderboard.

An eclectic mixture of destinations populates the middle of the leaderboard with Toronto (£4.10), Barcelona (£4.18), Kuala Lumpur (£3.81) and Tokyo (£3.53) all providing beers at prices that aren’t likely to make people perform a double take.

However, for the more price conscious traveller there are plenty of options available, with a range of popular bucket list destinations including Johannesburg (£1.63) and Rio de Janeiro (£2.21) offering beer prices that won’t break the bank.

There are also some surprises to be found, cities that most would consider to be on the costly end of the spectrum such as Berlin (£2.72) and Seoul (£3.28) are actually relatively reasonable when it comes to beer.

Commenting on the findings, James MacDonald, Head of Digital at Money Guru said: “It’s eye-opening to uncover such a large difference in the price of a pint of beer across the globe. The disparity in cost turns what should be an enjoyable experience into a penny-pinching exercise. Luckily Money Guru’s research highlights the top cities to get more pint for your pound.”

So, whether you’re a beer aficionado, a social drinker or just like a couple every so often, it’s wise to factor alcohol into your holiday budget. For more information on their findings, you can see the entirety of Money Guru’s research here.

Ahead of the Russia 2018 World Cup semi-finals kick off tonight, Dun & Bradstreet have revealed that when it comes to economic risk ratings its clear who wins. Below are graphics ahead of the match tonight between France & Belgium, and tomorrow between England & Croatia.

Below you can also see a thorough table of all countries in the World Cup that accounts for FIFA rankings vs. their D&B Country Risk rating vs. the GDP per capita global ranking.

So if you clicked this article because you want to know how much the literal world cup trophy costs, it’s currently estimated at a total $10 million, or in fact more than two human figures cast in 18 carat gold, but that’s not what this is about.

For the consumers, the ticket prices alone are eye-watering. Standard category tickets for the knockout stage matches set fans back around £2,458 ($3,249), while the group stages will have cost £2,631 ($3,477) combined. All in all, that’s around 22% of the UK’s average annual salary. Plus, flights at anywhere between £600 ($793) and £1,500 ($1,983) depending on where you are in the world, insurance at £41 ($54), and hotels at around £987 ($1,305) and counting, the cost of the world cup is a small fortune for any individual fans attending the competition.

However, the true cost of the world cup extends far beyond what most can imagine. If you take into account the cost on the host nations, the funds handled by FIFA and national football associations, the money lost in advertising, operations, infrastructure and accommodating resources for businesses worldwide, from an economic perspective the overall break-even after losses and profits is highly questionable.

This year companies in the UK witnessed a blackout the morning after some of the England games; employees just didn’t turn up to work. The estimated loss figure for employees ‘pulling sickies’ reaches £500 million ($661 million) nationwide. After the England Vs Columbia game, millions of football fans were expected to call in sick, and they did. While each individual case may seem like nothing much, all together, a £500 million loss in a day is a big hit for the economy. Realistically, other football fanatic nations may have suffered a similar fate the day after their respective teams played.

But the real cost of the world cup extends much further still, and its biggest catalyst, hosting the 32-nation tournament, touches a sensitive socioeconomic nerve. While the surge of a national team in the tournament can bring a much-needed economic boost, £2.6 billion is expected to flood into the UK economy should England reach the final on July 15th, the true cost of the World Cup is always counted in billions and can cause significant issues for the host country.

The 2014 world cup in Brazil was forecast to positively impact economies anywhere between $3 billion to $14 billion. The positive economic impact of the 2010 world cup in South Africa was estimated at $5 billion; the 2006 world cup in Germany at $12 billion and the 2002 world cup in Japan & South Korea at $9 billion. The 2014 brazil world cup was due to add an estimated $30 billion to Brazil’s GDP between 2010 and 2014.

From TV rights fees to sponsorships and ticket sales, FIFA made $4.8 billion in revenue from the tournament in Brazil, with an expense of $2.2 billion, most of which comprised funding to teams and TV production costs. $100 million of the expense was the legacy payment given to Brazil. This did not however cover the costs of building and renovating 12 stadiums and developing the appropriate transport infrastructure needed to host the world cup. The overall cost of this has been estimated at around $15 billion, most of which was public funded.

On top of this further costs incurred due to overruns, legacy concerns and missed constructions deadlines. Some of the stadiums remained unfinished or untested prior to the launch of the 2014 event. In addition, many protests erupted throughout the country calling out the troublesome impact of the world cup on day to day living in Brazil, from the way public transport was handled to the way policing was affected.

The harsh truth is that many of those stadiums remain unfulfilled and unused now. Sure, they were put to good use during the world cup in 2014, but in 2018 these stand desolate, while basic social services are underfunded and lack the capital for development. Billions in capital that could have not been spent on the world cup. One of the 12 stadiums built is the Arena da Amazônia in Manaus. Situated in the middle of the jungle, without a proper top-flight football team, a 45,000-seat stadium is unnecessary. In order to build this stadium, some parts had to be transported by boat through the Amazonian jungle.

To add to the frustration of Brazilians that year, their world cup team suffered a crushing 7-1 defeat against the Germans in the semi-finals.

After being selected to host the 2018 world Cup back in 2010, Moscow has aimed for Russia to stand out as a global superpower and host the world cup in order to benefit from a big economic boost in the long term. The results of the latter are still to be seen, though in terms of media coverage and PR, Russia has been doing pretty well, with many global fans claiming that from a social and economic stand point, Russia is a far better nation than most believe it to be.

We’re currently just past the half way line in the 2018 Russia world cup and the cost is already mounting. The overall cost of Russia hosting the world cup is reported at $14.2 billion, making it the most expensive in history thus far. Russian media channels report that most of this cost consist of repairs and renovation to existing airports and transport systems as well as building 12 new stadiums, 11 new airport terminals, 12 new roads and three new metro stations in the run up to the competition. To support these, further infrastructure such as hospitals, power stations, and hotels were also injected with cash. Clearly, Russia thought it had better odds than Brazil when it came to the long-term economic advantages of hosting the world cup.

In terms of sponsorships, of 34 potential slots offered by FIFA for the 2018 world cup in Russia, 19 were filled, mostly by Russia themselves, and China (despite not even having a team in the tournament) and Qatar. KPMG currently estimates sponsorships have made FIFA over $1.6 billion. Statista has estimated around 1,000,000 foreign fans to attend the games from the first kick off to the final whistle, with a further 2 million domestic fans in the mix. FIFA says around 98% of tickets were sold, but this hasn’t always appeared to be the case in some matches.

Once the world cup is over, it’s difficult to say whether Russia’s massive investment, the biggest yet, will reap long lasting benefits from hosting the competition. But if Brazil is to be an example, probably the worst of many, then Russia is arguably set to lose from the deal, at least financially. Although the injection of cash means they will have a few more hospitals and better airports in the long term, from a future football perspective the stadiums that were purposely built for the world cup will likely not bring much revenue back for Russia in years to come, leaving the expenditure as a substantial one-off outlay, albeit it for a very rich country.

At least high hopes still remain for the Russian football team in the 2018 world cup, as they face Croatia this Saturday in the quarter finals. If they win, maybe things will look a little brighter.

Sources: 

https://www.vanquis.co.uk/the-cost-of-the-world-cup-2018

http://www.cityam.com/288622/cost-football-coming-home-england-fans

http://theconversation.com/hard-evidence-what-is-the-world-cup-worth-27401

http://uk.businessinsider.com/fifa-brazil-world-cup-revenue-2015-3

http://www.businessinsider.com/brazil-world-cup-stadiums-2014-6?IR=T

https://www.theguardian.com/world/2013/jun/18/brazil-protests-erupt-huge-scale

https://www.bbc.co.uk/sport/football/30642071

https://www.cambridge-news.co.uk/news/uk-world-news/people-sickies-work-world-cup-14864331

https://www.fool.com/slideshow/games-cost-russia-14-billion-9-wild-world-cup-money-stats

https://www.forbes.com/sites/jamesrodgerseurope/2018/07/02/world-cup-2018-wins-for-russia-on-and-off-the-field/2/#7cab1dfb1e3b

https://uk.reuters.com/article/uk-soccer-worldcup-col-eng-penalty/this-time-england-left-nothing-to-chance-in-shoot-out-idUKKBN1JU1T6

https://www.bbc.co.uk/news/business-44711254

Football remains big business and the World Cup is still the most-watched sporting event on the planet. In 2014, an estimated 3.2 billion people watched the tournament, including 1 billion tuning in to the final itself. But it’s not just the sport that wins the game. Richard J Hunter, Head of Markets at interactive investor explains for Finance Monthly.

It is debateable as to whether the hosting country’s economy benefits, given the building, infrastructure and security requirements, but the governing body FIFA looks likely to receive some $5 billion nonetheless.

In terms of the UK, however, there could be a number of companies who will be watching the finals with commercial as well as national interest in mind.

And with England’s fixtures being at different times, people may choose to watch the games at home with two of the three group matches falling on a weekday. (Monday 18th June 19.00, Sunday 24^th June 13.00, Thursday 28^th June 19.00).

Bookies

Expect the usual bunfight and round of amusing adverts from the larger players, all seeking to gain a share of any flutters you may fancy either in the comfort of your own home, or if you are out and about. With an explosion of mobile phone betting now established, it is easier than ever to bet, which could play into the hands of the likes of Paddy Power Betfair (PPB), GVC Holdings, which incorporates Ladbrokes and Coral (GVC) and William Hill (WMH).

Replica shirts

The main retailers are already promoting these on their websites, including a vast selection of the kits of participating countries other than England. It will be interesting to see whether Sports Direct (SPD) or JD Sports (JD.) will win the battle.

Pubs

There will still be many fans who choose to watch games in a louder atmosphere, so it may be a fillip for the fortunes of the likes of Mitchells and Butlers, which include the chains of Nicholson’s, O’Neill’s and All Bar One (MAB), Greene King (GNK) or Marston’s (MARS). If history is anything to go by, it may be possible to find solace away from the World Cup entirely in a JD Wetherspoon (JDW) environment where music and sport (with volume) is usually notable by its absence.

Advertising

The majority of the games will be shown on terrestrial TV, which should benefit the likes of ITV, especially now that it is possible to bet at improved odds “in play” as the game progresses and during the ad breaks in particular. Generally the added froth of advertising during large sporting events is seen as positive for the likes of WPP, notwithstanding its recent issues.

Brewers

Perhaps the brewers are already ramping up in advance, in which case the likes of Diageo (DGE), with its stable of household names such as Guinness, Smirnoff, Captain Morgan and Johnnie Walker could benefit. Further afield (available to trade on various foreign exchanges) AB InBev (Stella Artois, Budweiser, Beck’s and Foster’s) is a potential winner also.

For those determined to watch the tournament from home, perhaps a new television could be the order of the day from the likes of Dixons Carphone (DC.) via its Currys brand or Sainsbury (SBRY) via Argos. In any event, at the very least a pizza takeaway could be on the cards from Domino’s Pizza (DOM).

Benefits to these stocks would come into sharper focus the further England progress – which in itself is uncertain given the last 52 years – but equally a successful (and overdue) run in the competition could have a wider positive impact on sentiment in general, at least temporarily.