For my final project on global mega sporting events I was given the 2006 FIFA World Cup, which was hosted in Germany. In my paper I will be analyzing and reviewing the impacts that this event had on the country of Germany, in relation to economics, tourism, and the income that the World Cup brought to Germany. I will give my own analysis on the event and the impact that came with it, I will explain whether I believe hosting this mega sporting event was wise for Germany or whether I believe the event was too costly.
The first thing we will look at is the information of Germany at a national level. They have a population of 82,264,273 as of 2018, according to World Population Review. Germany’s political structure is very different than that of the United States, and is a much more recent political construct due to the events of WWII. Their construct was created in 1949 and they adopted a sharing of power between the central government and the states, which in Germany are called Lander. The German nation is considered a federal parliamentary republic. Germany has three houses, the executive, the Bundestag, and the Bundesrat. The executive house or branch is where the head of the state (President) resides, along with the Chancellor who is the head of government, equivalent to the British Prime Minister. The Bundestag is the lower house, and is closely related to the structure of the House of Representatives. Bundesrat on the other hand is the upper house, which is similar to the US Congress, but the members are appointed and not elected, and the states do not have equal representation but rather on the population of the state (Darlington, 2018).
I will also provide the gross domestic product and some statistics to go along with it, along with the gross national product. The GDP of Germany at the end of 2017 was listed at 3466.76 billion dollars, according to Trading Economics, which is higher than the previous of 3363.60 billion. The country has seen an increase in GDP annual growth rate from the last recorded but the growth rate in general has dropped .10 percent. GNP of Germany at the beginning of 2018, also according to Trading Economics, was listed at 840.62 in euro billions.
The climate of Germany is moderate and does not have any longer periods of cold or hot weather (WeatherOnline, 2018). Germany also has maritime influenced climates (warm summers, wild winters) which are primarily found in Northwestern and coastal Germany. The majority of the inland portion of the country experiences continental climates which are categorized as warmer summers and colder winters. We see continental climates in the US, primarily in the Midwest region.
In Germany crime has always been a concern and the numbers and crime rates they experience can be compared to that of the United States. The latest statistics I was able to find from the United States Department of State Bureau of Diplomatic Security were from 2014. One thing that the Department states is not captured by the statistics is the effect of the one million refugees on the crime rates. Drug related crimes have gone up, as well as homicides, comprising 52 percent of all crime experienced in Berlin. It shows that Germany has a high likelihood of terrorism because an estimated total of 790 residents left Germany to go support conflicts in Iraq and Syria, the majority who went joined Islamic extremist groups. Around 270 of those residents made their way back to Germany all of which were investigated upon their arrival to avoid any possible terrorist threats.
It comes as no shock that the most popular sport in Germany is soccer. The Germans have their own professional league called Bundesliga, one of the most successful leagues in Europe. With the constant success of the German national soccer team it is no surprise that they garner so many fans. The next most popular sport is golf, which is typically practiced by the wealthier residents of the country. Coming in third is ice hockey where most major cities in the nation have hockey teams.
Germany hosted the 2006 FIFA World Cup and dealt with a lot of allegations regarding how exactly they got the rights to host the tournament. It is said that the “German bidding committee created a slush fund in its effort to land the rights to host the 2006 World Cup. Senior officials, including football hero Franz Beckenbauer, are believed to have known about fund.” (SPIEGEL ONLINE, 2015). Keeping that in mind it is easy to surmise that the country indeed wanted to host the tournament very badly. Enough to where they would use corruption and bribery to get what they wanted. The German bidding committee had received a loan to the tune of 13 million deutsche marks, from Louis-Dreyfus who at the time was the chairman of Adidas. This loan never appeared in the bidding committee’s budget. FIFA helped facilitate the payment and it shows that the loan was used to secure four votes belonging to Asian representatives (SPIEGEL ONLINE, 2015).
The country of Germany took the news very well. Being such a soccer crazed country they were excited to be holding the pinnacle of soccer in their home country. Statistics show that, “before the 2006 World Cup 81.7 percent of people in Germany thought the country was the right choice to host the event” (Germany the Travel Destination, 2018) The citizens usually always benefit from hosting the World Cup because the atmosphere during the event makes citizens happier and more proud to be a member of that country, and in turn makes them more likely to attend the games or watch them on television. This is called the “feel-good effect”, and increased purchasing power during the tournament (Liu, 2013).
For the 2006 World Cup the tournaments slogan was “A time to make friends”, along with the anti-racist message “Say no to racism”. The point of this was to start an anti-racism campaign that would run throughout the entirety of the tournament. The marketing ploy itself was anti-racism along with the specific initiative. The purpose was to promote violence prevention, to create opportunities for soccer fans all over, to raise awareness for the problems of migrants, and to present soccer as a role model against discrimination (FIFA, 2007). To promote this they did things such as running anti-racism ads throughout the stadiums, along with putting five second ads on television for all TV broadcasters.
Hosting a mega sport event like the World cup can cost a lot of money and sometimes it may not be as favorable with its returns. That was not the case for the 2006 World Cup. It has largely been considered a success, and possibly the best World Cup yet. The operating budget for hosting the event was 430 million euros. They built twelve new stadiums for this event and the construction costs came out to be over 1.5 billion euros. The final cost of holding the World Cup was estimated at around 3.7 billion euros.
For this event the World Cup made 40 million euros in ticket sales, while the World Cup Organizing Committee profited 56.5 million euros. It was estimated that the organizing committee had a total earnings of 140 million euros from the tournament, they then paid FIFA 40 million and had to pay 44 million euros in taxes (DW Staff, 2006).
Initially when the report came out for the 2006 World Cup it showed that the countries tourism industry earned 300 million euros in revenue in that span. They also made 2 billion euros in retail sales and created 50,000 new jobs over the four weeks of the tournament. Sponsorships helped FIFA obtain a very large sum of money estimated at around 700 million euros. There was fifteen official partners of FIFA in this tournament and six national partners.
The GDP five years before the 2006 World Cup was on a steady incline up, it was low in the early 2000’s and as Trading Economics shows, after 2006 the GDP spiked upwards, and since has not come down to the point it was in 2006. As for the GNP, five years prior to the tournament the GNP was growing slightly, during the span of 2005 to 2010 we see the biggest upwards spike in the GNP that Germany has experienced in all of the 2000’s. The effects it had on the economy were all positive and like I mentioned earlier, they made 300 million euros in the tourism industry in that time period, and to boot the German government said over a three year period that they estimate the World Cup brought them around 3 billion euros. The impact of foreigners on the German economy was incredibly high in 2006, in 2007 it dropped but still stayed at a high number. In 2008 we see that foreigners have an exponentially smaller impact on the German economy. While the World Cup in 2006 brought Germany a good amount of money it also did a great job of enhancing the image of the nation throughout Europe and across the world.
I believe that the 2006 World Cup was very good for Germany and it really did help the economy and helped improve the image of the nation. Though after finding out how they most likely received the bid to host the tournament by bribery, it does affect my opinion on it. I think Germany definitely should’ve put a bid in and tried to host the tournament because it obviously helped the economy, but not by bribery. FIFA is already a very corrupt organization and Germany stooped to their level to try and help themselves out, and in turn that hurts their image. The event was successful overall besides the backlash received after the findings of possible corruption, it helped tourism, and boosted the GDP and GNP, both seeing upward spikes post-tournament. The World Cup also brought a great message with the anti-racism marketing ploy, and the event helped bring together the nation of Germany.
“Germany Population 2018.” Germany Population 2018 (Demographics, Maps, Graphs), worldpopulationreview.com/countries/germany-population/.
Darlington, Roger. “A Short Guide to the German Political System.” German Political System, www.rogerdarlington.me.uk/Germanpoliticalsystem.html.
“Germany Gross National Income 1991-2018 | Data | Chart | Calendar.” Germany Gross National Income | 1991-2018 | Data | Chart | Calendar, tradingeconomics.com/germany/gross-national-product.
weatheronline.co.uk. “Germany.” Climate of the World: Germany, www.weatheronline.co.uk/reports/climate/Germany.htm.
Grandy, Achim. “Achim Grandy.” Movingto-Germany, 27 Dec. 2014, www.movingto-germany.com/top-10-sports-in-germany/.
Liu, Yungdon. “Assessing the Long-Term Economic Impacts of the World Cup as Mega-Sport Event.” Assessing the Long-Term Economic Impacts of the World Cup as Mega-Sport Event | The People, Ideas, and Things (PIT) Journal, pitjournal.unc.edu/article/assessing-long-term-economic-impacts-world-cup-mega-sport-event.