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Thu 3 Jan 2019 10:16 AM

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Revealed: the economic benefits of football

A new report from the Dubai Sports Council recommended that clubs with lower budgets diversify investments to maintain their share value

Revealed: the economic benefits of football
Saeed Mohammed Hareb, secretary general of the Dubai Sports Council (DSC) at the 13th Dubai International Sports Conference⁣.

Success on the football pitch and in winnings the rights to host events can help boost GDP, retail sales and tourism figures, according to a new report from the Dubai Sports Council launched for the Dubai International Sports Conference.

The report, which covered a number of economic factors linked to football, found that there was a boost of between $2.4 and $4 million to domestic consumption in World Cup hosts Russia during the event.

Additionally, a total of 1.5 million tourists travelled to Russia for the event, each of whom is estimated to have spent an average of between $5,000 and $8,000 on accommodation, food, entertainment and souvenirs.

The report also found that there was a 1 percent increase in Russia’s average per capita income during the event.

The report also noted that Croatia – which came in second place at the event after falling to France in the final – experienced an immediate surge in interest from potential tourists, with the website of the Croatian National Tourist Board experiencing a 250 percent increase in visitors on the day of the final.

The report noted that this was likely at least partly driven by a promotional campaign featuring players from the country’s national team.

In France, the report found there was a 40 percent increase in the number of TV sets sold in France between May and June 2018. Additionally, during June, there was a 20 percent recovery rate in French restaurants.

Club economics

Citing statistics from global index provider Stoxx, the report noted that the share value of professional football clubs rose 11 percent between 1992 and 2016, driven both by match results and by the transfer of notable players to clubs.

The report also includes a number of examples of clubs branching investing in other business verticals and increasing their bottom lines and value.

Danish club FC Copenhagen, for example, saw a 47 percent increase in revenues between 1997 and 2008 after acquiring a number of entertainment companies and fitness centres. During this time, the club saw its stock market value go up by 700 percent.

Turkey’s Fenerbahce SK, for its part, owns ready-made clothing retail chain Fenerium, which operates 63 stores and generates over $34 million annually. Another Turkish club, Galatasaray, owns real estate which has in turn raised the value of its shares in Borsa Istanbul.

The report, however, noted that several stock exchange-listed clubs face a difficult future due to the growing inclination by billionaire investors to buy major football clubs, expensive players and build new stadiums.

“This will cause a decline in the shares of professional clubs with a much lower budget or economic capabilities and a loss of their financial attraction,” the report said.

“The best solution for professional clubs is to diversify investments to maintain share value,” it added.