February 3, 2006

The Super Bowl vs. The World Cup of Soccer

I was in a conversation yesterday about the pro sports teams in the city where I live - Toronto, Canada. At the time I didn't realize that a talk about sports could lead to business value add.

Toronto has a very profitable NHL Team, the Maple Leafs; an NBA franchise - the Raptors; and an MLB Team, the Blue Jays. The discussion was about the high cost of going to games, and that the business of sports is in decline (other than for the Maples Leafs and the New York Yankees).

I think that you don't have to look far to prove that sports is alive and well. For example, there are two mega sports events this year. One's happening this weekend - the Super Bowl. The World Cup of Soccer, takes place later in the year. Hundreds of millions of people worldwide will watch both.

What's more interesting from a business point of view is the impact the events make in the cities and countries where they're held. For example, according to the
Detroit Free Press, the NFL says that this weekend's Super Bowl will make a $300 Million economic impact to the local economy. It's expected that the World Cup in Germany will bring £300 million or about $530 Million.

Based upon top line revenue it would seem that the World Cup has the Super Bowl beaten. But hold on a minute....Germany invested roughly $1 Billion to build and upgrade facilities to host the tournament. Meaning they're about $470 Million dollars in the red from the start. By the way, this will be true of every city hoping to host such events. Much like theOlympicss, the World Cup has to be financed by a country versus a syndicate of corporations.

The NFL doesn't have the hurdle of compelling the investment of billions of dollars for venues. This is why the Super Bowl is the superior event from a businessperspectivee....low cost of operating, no need for large scale investments plus it's easily transportable to different cities each year. This is why NFL Football is one of the most successful sports worldwide.

Earlier in the week I asked -
Where are the Turnaround Products? In that article I wrote that I couldn't find many superstar products (other than iPod or Blackberry.) I realize now that there are superstar products in the one domain that's highly populated with "superstar individuals" - sports and in particular the NFL.

I'm writing about sports on a website dedicated to Business and Technology because there's a lesson here for anyone in business. The lesson relates to an organization's business model. According to Wikipedia a "Business model is the mechanism by which a business intends to generate revenue and profits."

Is your company's business model set up like the World Cup of Soccer or is like the Super Bowl?

Related Links:

No comments:

Post a Comment