World Cup 2014The Society and Economy
Alan Ng Wai Ming
Ben Lui Cheuk Yin
Jason Kwok Chun Nga
Kevin Lui Ki Fung
Content:
1. Fun Facts2. How the Society Affects the National Team3. World Cup Gambling4. World Cup Broadcast5. Economic Impacts on Brazil
FUN FACTSPart I
1. National Team
1. National Team
2. Gambling
3. Broadcast
4. Brazil Economy
HOW THE SOCIETY AFFECTS THE NATIONAL TEAM
Part II
Content
1. Relationship between National Team, Local League and Youth Training System
2. Social Factors & National Team Performance
3. How the Cultures Affects Football Teams
The Case in England
Relationship between National team, Local League (Barclay Premier League, BPL) and Youth
Training System
Strong Teams in BPL
BPL Team international competition
World Cup 2014 Result
Foreign Players Effects in BPL
How BPL affects World Cup 2014
Observations
Clubs in BPL heavily depends on foreign players
High percentage of top-class foreign players in BPL
Poor England Team performance
BPL vs. England team?
Any relationship between local league and national team?
Transfer Policy of Teams in BPL
Huge funds
Desire to hire the best player
1.Lenient restriction on
foreign players2.Few England
potential players
Hire foreign players
Those best players
improve the quality of BPL
Contribute to huge
broadcast rate
Youth Training System and Teams in BPL
Avoid relegation to receive huge
funding
Using green youth players means high
risk to relegation
Not willing to use local
youth players + buy better
foreign players
Fewer resources to
youth training system
Consequences
• Youth players need more high-level matches to gain experience
• Unfavorable policy and resources
• Few good local players
Social Factors Affecting National Team Performance
International Success and National Team Institution, Michael A Leeds
Findings from the paper
• Larger population and higher GDP per capita > less populous and poorer countries
Population and Economy
• Oil production countries > non-oil production countries
Oil Production
• Non-communist countries > communist countriesPolitical
Generally, this model describes the situation correctly.
However, there are some exceptional cases.
The Case in USA
Are there other factors?
Should be a strong
Team
High GDP
Large Population
Oil production
country
Democratic Country
Additional Social Factors(I)• Experience Factor– The number of high-level matches played
– For example, in USA• Between 1950 and 1990, USA didn’t qualify for World Cup• More matches• Import “experience” by bringing in outside coaches as shortcut• Result in WC14: Round of 16
Additional Social Factors(II)• Popularity of Football– Larger Player Pool ↑chance to find good players• Brazil
– Street football culture
• USA– Sports like American Football (38.3%), Basketball (15.3%) and
Baseball (14.8%) are more popular– Football ranked the 4th favorite (8.2%)
Another Example: China
High GDP
Very Large population
Communist Country
Ranking 88th in FIFA ranking!!
Additional Social Factors(III)
• Policy Factor– Strong Anti-Corruption Action• Players can play in fair environment
– Efficient Football Association• Find potential good players• Check on bribery and match fixing• Provide resources and support to players and clubs
– Preference of Political Leaders (for Communist Country)• For example,
– President Xi Jingping is a football fan– Investment in football has risen dramatically
– Retirement Support• Football careers are short-lived• Guarantee of prospects after retirement is vital
– From player to coach– Or other careers
Additional Social Factors(III)
Culture and Football
The Case of Germany and Brazil
The “German” Culture
Loyalty
• Teamwork, trust one another
Thoroughness
• Pay attention to details
• Perfectionism
Orderliness
• Organized• Always follow
the rules
How these culture related to German Football
Loyalty
• Support each other on the pitch
• Team building in Campo Bahia
Thoroughness
• Wrote down each Brazilian player’s properties during semi-final
Orderliness
• Perfect execution of game plan, discipline on the pitch
Effects of Professionalism & Perfectionism
Euro Cup 2000
Humiliation
• 1:1 Romania• 0-1 England• 0:3 Portugal
14-Year Plan Developed
Eliminated In Group Stage
The DFB Talent Development Program
• Committed, 10m EURO each year
• Formation-based• Competitive
football at an early stage
• 5500 Brand A coach (VS 115 in England)
• Aging from 8-14• Based on position
Selection Coaching
InvestmentTraining
Another side of the Match
Traditional Brazilian Style Analysis
Population does not enjoy equity
Football The disadvantaged to express attitude
towards life
Democratization of football: street
football
A way for climbing up social
ladder
The Street Football culture
Brazil Team style
Individual decision making, problem solving
Football is an expression of arts
Passionate and sometimes involving mild violence
Well, this is not the case anymore…
Reasons for Brazil Loss
Brazil players are exposed to European football rather than Brazilian football
The Decline of Street Football
Influx of European
Style
Decline of Street Football
Identity Crisis
-Talent outflow to Europe at an early age-Brazilian teams introduce European training methods
-Streets are occupied by urbanization and heavy traffic-Children focuses on study, teenagers focuses on work
WORLD CUP 2014 PREDICTION AND GAMBLING
Part III
Rational Prediction
Irrational Prediction
World Cup 2014: Gambling Options
Bet for the Top Scorer• Reason: only 20 players are legitimate, producing
a higher probability
Bet for the Black Horse in Group Stage• LadBrokes: USA +500 to have zero points• Bovada: Columbia -125 to win in the group stage
Bet for Specials• Any English player cried when eliminated (2/5)• Any keeper performed a scorpion kick (66/1)
Gambling in World Cup 2014: Surprising Results
Spain 0:2 Chile
Germany 2:2 Ghana
Germany 7:1 Brazil
Wilson Raj Perumal: professional match fixer
Cameroon: Intentionally sent off…no defense…fight among teammates…
Gambling in World Cup 2014: Match-fixing
Reasons for Gambling
Risk Taking
Glamorous
Escapism
Social
Conclusion
• Gambling - high risk, low yield• Dark side creates too many chances of losing
money• Match fixing, unexpected result, asymmetric
information, scams…
Cherish your life, Don’t gamble!
WORLD CUP BROADCASTINGPart IV
Local Situation
Global: Selected Cases
Observations & Trends
Content
The Local Case
• Hong Kong: only partially free (22/64)– Payment required to watch all matches legally
• For comparison– Mainland China: basically free– Macau: all free
Situation in & around Hong Kong
• Other ways to watch:– OTT (Over-The-Top) TV boxes, e.g. MI Box(小米盒子 )– Streaming on computers, tablets or smartphones– Restaurants and pubs– Shopping malls
Situation in & around Hong Kong
Profit Cost
Operating margin: -4%• 32% 28%
Cost of sales: +12%• HK$1030m 1150m• World Cup rights: HK$400m
Gen/Admin expense: +11.3%• HK$336m 374m
Pay TV losses• Loss +82% • Subscriber # not disclosed
Ad revenue due to World Cup rose by 5%
TVB 2014 Interim Report
Profitablity of TVB
reduced
World Cup bid increased cost
of sales
Additional TV production
further add to expenses
Little increase in ad revenue
Even worse losses in pay TV business
Possible limited increase in pay TV subscribers
Interpretation & Possible Factors
• Also, attention might have been on political issues (e.g. Occupy Central)
Interpretation & possible factors
22 free-to-air matches• Not enough in eyes of public
Saw TVB as inconsiderate• TVB only met minimum
requirement• Some popular team
matches are not played in group stage, like Argentina
Unwilling to pay for watching all
64 matches
Use other methods to
watch
• Air all 64 matches free-to-air– Increase advertising fee as a result
• Joint bid with other networks– Korea: the 3 TV networks (SBS,MBC,KBS) cooperate to
broadcast all matches freely
• Offer shorter pay TV contracts at reasonable price
Better ways for TVB?
Selected cases outside HK
• Situation similar to Hong Kong– Most matches are not free– Legal streaming available
• Ratings– Combined with coverage in Spanish
USA/Portugal: 24.7m
Germany/USA: 14.1m
USA/Belgium: 21.6m
Brazil/Germany: 12.4m FINAL: 26.5m
USA
Tradition
• Football has never been associated with the US
Competiti
on
• American football (NFL), basketball (NBA), baseball (MLB), hockey (NHL) constitute the traditional Big 4
Weak
local league
• Major League Soccer has not been very popular
Question: Why did this World Cup rate so well?
• Theory 1: “The World Cup rated better as the US team played relatively well this year”
• Theory 2: “Is soccer itself gaining a dedicated TV audience?”
USA/Portugal: 24.7m
Germany/USA: 14.1m
USA/Belgium: 21.6m
Brazil/Germany: 12.4m FINAL: 26.5m
Theories about WC ratings in the US
Original situation• Government “must-carry” rule all matches must
be aired free-to-air
What could have happened• Original carrier, RS International, asked for relaxation of rules
in 2013 air some matches only on paid platforms
Proposed arrangement: 22/64 matches to air free-to-air• Déjà vu: same arrangement as TVB in HK
Thailand
Thai Government Action
• Last-minute government intervention• Cause: ‘Happiness campaign’ by government • Military coup in May• From Thailand to Hong Kong: what if…?
Gov
ernm
ent i
nter
venti
on • Gov’t regulations re: sports broadcasting• China• Thailand• Australia
Cab
le /
Pay
TV • Sports: key assets
for pay TV operators
• Compare/contrast• US v HK• Content v carrier
Stre
amin
g • Legal or otherwise• Extension of pay
TV business?• “Cord-cutting”
Trends and observations
ECONOMIC IMPACTS ON BRAZILPart V
Brazil Economy: A Summary
Stagnation Recession-Inflation (Productivity)-Charges of corruption (Political Instability)
Resource-rich nation-7th largest economy-Booming until 2010
Past
Now
Before The Cup: Reactions
• Sponsoring Costs↑↑USD 11.5 B• Stadiums useless
Extravagant
• A show to pretend “All are good”Propaganda
• Lots of social problems still remain• Resources should be better utilized
Dismay
World Cup 2014 on Economy
• Insensible Investment– Investment = USD 11.5 B
• Preparation Phase: 0.5% GDP input vs 0.1% - 0.15% GDP contribution (2.9% real growth in the period)• Event YearTourist no↑ 2014 growth impact↑ (11% real growth in the period)• Post EventConstructions↓1-year-post-event growth contribution↓
World Cup 2014 on Economy
• Employment Drops– Short-term employment • Limited Country Impact• 0.7 m vs > 106.3 m needed• Mostly construction,
tourism & hospitality jobs: Short-term + Low-skill
World Cup 2014 on Economy
• Insolvencies increase– Domestic demands (post-
events)↓• Tax rates for corporates ↑• Monetary tightening: C.D.• Loan interests rose from
14% last year to 16% last April• Even more difficult for F.I
World Cup 2014 on Economy
• Inflation > Growth Brought– Current level: 6.75%– Coupled with all reasons• Economy lacks reason to rise People: Slight salary bounce vs Reality: Skyrocket prices
Conclusion• Society affects the national team– Too many foreign players in local league can badly
affect the national team– Various social factors affect the football
development – Different culture brings different play style and
leads to different result• Gambling– Situation in World Cup 2014– Reasons for gambling
• Broadcast– Cross comparison of local and global cases– Some possible measures for government and
private institution• Economy– More inflation than growth for Brazil– Protestors’ concerns are valid
Conclusion
Any Questions?
Thank You!