The World Cup rugby tournament has a much greater impact than mere spectator value and a team’s performance can even have an influence on a country’s stock exchange. Then we don’t even talk about the enormous financial injection it offers to the host country.
Prof. Waldo Krugell, economic expert attached to the North-West University’s (NWU) faculty for economic and management sciences, says that much research has already been done internationally on the effects that a team’s performance in an international tournament has on the country’s economic activities.
“The economic impact is diverse. It’s a long tournament and analysts have already warned about the effect it can have on workers’ productivity, especially with the fact that most of South Africa’s matches are played on a Sunday. A win or a loss can result in people being absent from work on the Monday after the game.
However, he says the beer industry is not entirely convinced that this will indeed be the case, as consumers are suffering financially and load shedding means that pubs cannot always keep the beer cold.
Krugell says that a win or a loss can also have an impact on the country’s bond exchange. “When the national team loses, investors are somewhat depressed and the next day is usually a bad one for the local stock exchange. Research has observed this trend during the World Cup, as well as international rugby and cricket matches.”
Other research in the past has looked at what happens to sponsors of major international tournaments’ stock price. “In the case of the PGA golf tournament and the American Nascar races, sponsors’ stocks do better for the duration of the competition.”
A World Cup rugby tournament also has great economic benefits for the host country. World Rugby says in an entry on their website that a World Cup tournament usually generates around £2 billion (R46 billion) for the host country. According to a report by Ernst and Young in 2020, the World Cup had the biggest economic impact in 2019, with £3.4 billion (almost R80 billion) generated for Japan.
“The financial success of the men’s World Cup also makes it possible for World Rugby to invest large sums in the development and growth of the sport and ensure that the sport is as accessible and enjoyable to as many people as possible.”
World Rugby said in 2020 that they hope to invest more than £565 million (approximately R13 billion) in the sport between 2022 and 2023.