Counting the cost of England’s soccer failure

Counting the cost of England’s soccer failureFootball shirt manufacturers, supermarkets, flag-makers, suppliers of giant TV screens, pubs, brewers, sports retailers, television companies and many other businesses are today counting the cost of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />England‘s dismal early exit from the European Football Championships scheduled to take place in Austria and Switzerland in the summer of 2008. Steve McLaren’s swift shove through the exit door has left the former manager over £1 million better off as a result of the termination of his contract - a perverse case of rewarding failure with giant financial payouts - but, as the Football Association was announcing his departure, a raft of sports retailers were issuing profits warnings to the stock market. In seconds, the share prices were sent tumbling.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

The profits warnings are needed because sales of replica shirts will now fall well short of expectations. Domestic interest in the 2008 tournament will be badly affected. Umbro, the company behind England‘s kit and Sports World, owned by Mike Ashley’s Sports Direct both issued a downgrading of profits forecasts. Back of the envelope calculations from the British Retail Consortium estimated that sales would be down by £600m next year. Nationwide, Carlsberg, Eon and McDonald’s - the FA’s main corporate sponsors will also be feeling blue about the result last night. And the FA itself has suffered a potential loss of revenue - England will be playing friendlies but nothing more for the coming months. Attendances will suffer.

But this forecast fails to consider that out spending power has to find a home somewhere. England‘s abysmal performance opens the door for other summer activities to take the spotlight. As our over-paid footballers lounge on the beach desperately trying to avoid watching tv coverage of the Euro finals, so the marketing people and TV companies will be looking for new ways to fill the schedules and make some money.

The bad news for replica shirt manufacturers could be good news for travel agents and holiday companies as they look to provide alternative holidays for the fans who might otherwise have stayed at home glued to the box or travelled to watch England play. And such is the diverse nature of our population these days that there will undoubtedly be a rising demand for the replica shirts of the other competing nations. What about the bookmakers? On the surface the result is bad news for them too. But my gut feeling is that punters will continue to have a punt on games in the European championships. Last time around, Greece came from nowhere at ridiculous odds to take the title, is there another team lurking in the draw that might be worth an outside bet?

It is also probably good news for students approaching their exams; there will be fewer distractions mid evening during those balmy June nights!

England failure ‘may hit economy’ (BBC) http://news.bbc.co.uk/1/hi/business/7106952.stm

England‘s summer off could cost UK economy £1bn http://www.brandrepublic.com/News/MostRead/768591/Englands-summer-off-cost-UK-economy-1bn/