Just when you thought it was time to wave goodbye to football for a few months, and to get up to speed on scoring in the synchronised swimming and the rules of judo for the Olympics, along comes the European Football Championships.
The Euros take place in Ukraine and Poland from the 8th of June until the 1st of July, and are being somewhat overshadowed in the UK by the impending Olympics. But don’t forget football is the national game and the Championships will appeal to the whole of the UK, whereas the Olympics is focused on South East England.
The European Football Championships are also the third most watched global sporting event after Olympics and the Football World Cup. The 2008 Championships in Switzerland and Austria made €1.3bn through sponsorship and commercial revenues, and also had an indirect halo effect on the wider European economy. We expect these Championships to be even bigger. And with investors nervous and short term in their outlooks, it should not be underestimated how much any sign of a positive fillip from the tournament might help a company’s share price.
In terms of economies, a good run in the Euros would do the morale of any country a world of good, but as Spain has shown since the 2008 tournament, football success is no guarantee of future economic prosperity.
Four sectors that could benefit from the Euros:
1. Media: ITV will be covering England’s first and third group games and will also share the final with the BBC. The time zone is favourable for attracting good viewing figures, but of more importance is how long England stays in the competition. ITV recently posted encouraging figures that supported their share price, and the Euros should provide an additional and welcome boost to advertising spend.
2. Travel & Leisure: Although not all companies in this sector will benefit from the Euros, there is a very high correlation between high profile televised football matches and pizza sales. I see no reason why this should not be the case again this summer, and Domino’s Pizza is one potential beneficiary. DP Poland is also an interesting play for exposure to pizza sales at the venues. This AIM quoted company has exclusive rights to Domino Pizza sales in Poland and currently has 12 outlets in Warsaw.
3. Gambling: There is no doubt that punters like to have a bet on who is going to win and who will be top scorer. Betting operators are much more innovative than in the past and “in running” internet bets will be a big opportunity for online operators such as Sportingbet.
4. General retailers: After the washout of April, supermarkets and DIY stores will be crossing their fingers for sunshine in June. There may only a couple of big barbeque weekends but “every little helps” right now for the likes of Kingfisher, owners of B&Q.
And one that may not:
5. Travel & Leisure: For armchair sports fans this is a bonanza summer, but sadly it is what travel operators such as Tui Travel and Thomas Cook could do without. Potential customers will book late and could leave going away until later in the summer, putting huge pressure on travel companies’ schedules.
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