World Cup as an investing strategy

 

The World Cup is more than just a $14.5 billion expense to the host nation. In 2018, over 3.4 billion people are expected to be viewing the event generating $6 billion in revenue (^1). The question worth asking is, with half of the world's population viewing and money moving with it, are there investment opportunities worth considering?

At the last world cup in 2014, Brazil's GDP only grew by 1% after contributing $12 billion to infrastructure for the games. There were also charges of scandal and corruption in which $237 million was lost (^2). Brazilian stadiums that were built for the games are now used as parking lots for busses (^3)

Russia, on the other hand, invested widely in their diversified infrastructure. They made 12 stadiums, 11 airport terminals, 13 new hospitals, and 27 hotels (^4). FIFA, the World Cup organizing body, is expecting $3 billion in advertising and broadcasting revenue, a 25% increase from 4 years ago. Most of the sponsors came from companies in China, Russia, and Qatar. ESPN paid $100 million for broadcasting rights.

Advertising, technology, airlines, and broadcasting companies can be expected to benefit from the increased demand of World Cup viewing and participation. The iShares Leisure and Entertainment ETF (PEJ) is up 42% since the last World Cup in 2014.

The bottom line is that with the 25% increase in revenue, infrastructure investment, and viewership, financial assets of all kinds are set to keep growing. More of the developing world are evolving into hungry consumers and, with that, will further drive the global economy forward and asset prices along with it.

At Eureka Wealth Management, I keep my clients informed of potential investment opportunities as they present themselves. I also help you prepare for retirement so that you can have the free time to watch the World Cup. Call me for a free, initial consultation at (760) 537-0791 or visit eurekawealthmanagement.com.



^1 https://www.hollywoodreporter.com/news/soccer-world-cup-2018-global-audience-hit-34-billion-fifa-revenue-reach-6-billion-1120071
^2 Financial Times dtd 7/6/18: "Fifa scandals see brands withdraw their backing"
^ 3 https://www.cnbc.com/2018/06/14/the-business-of-the-world-cup--who-makes-money-and-how-much.html
^ 4 https://www.fool.com/slideshow/games-cost-russia-14-billion-9-wild-world-cup-money-stats/?slide=4

 

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©2020 BY EUREKA WEALTH MANAGEMENT.

Eureka Wealth Management is a registered investment adviser in the State of California. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment advisory services. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.