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The economic cost of Henry’s handiwork
22 November 2009 By Linda Maher
Ireland’s failure to qualify for the World Cup after the controversial draw with France last Wednesday could cost the economy up to €500 million.
Industry figures said the team’s elimination - following a handball by French captain Thierry Henry which led to France scoring -would have wide-ranging effects on everything from travel agents to sports shops and pubs.
Using a conservative estimate of two million Irish people spending an average of €250 each if Ireland had qualified for the tournament next summer, the spend would be a total of €500 million, they said.
If Ireland had progressed beyond the group stages, the spending would have been even higher, encompassing people travelling to South Africa for the tournament, buying jerseys and kit and spending on food, alcohol, betting and newspapers and magazines. The Football Association of Ireland (FAI) could also lose up to €25 million in income as a result of last Wednesday’s game.
The sports travel industry is likely to be one of the hardest hit sectors. When big tournaments are close to home, fans can make their own arrangements, but when they’re in far-flung destinations - such as South Africa - they tend to use travel agents and tour operators.
‘‘It’s the difference between bringing and not bringing 2,000 people at about €2,000 a package," said Neil Horgan, managing director of Abbey Travel, the official travel agent to the World Cup.’ ‘We will now be keeping employees here on a three-day week instead of increasing them to a five-day week. It’s our staff that will be hit hardest.
‘‘Traditional holiday companies will be happy, as people will now be travelling to places like Spain instead of South Africa. Families take fewer holidays when Ireland qualify for a big tournament, so that will suit other agents."
Betting shops are also likely to see a slowdown in business, which will have a direct impact on their bottom line. Leon Blanche, spokesman for Boylesports, said Ireland’s failure to qualify for the World Cup was likely to reduce its turnover for next year by 20 to 25 per cent.
‘‘The last big tournament didn’t have Ireland or England in it," Blanche said." England have already qualified [for South Africa]. If we could have done it, it would have been brilliant. If both teams had been going, it could have been the best World Cup of all time for us. The result was hard to take at a time when the country needs a lift."
Because of the controversial result last Wednesday, Boylesports and some other bookmakers gave refunds and free bets to punters who backed Ireland to qualify for the tournament.
‘‘That should ease the pain somewhat," Blanche said.
He said that, while the overall result last week didn’t go Ireland’s way, the score after 90 minutes still cost Boylesports.
‘‘A 1-0 scoreline and Robbie Keane to score the first goal were popular bets," he said.’ ‘It probably cost us €400,000 to €500,000.We’d have been much happier to pay that out if Ireland had made it in the end."
The result was also a big blow to the finances of the FAI, at a time when the soccer association can scarcely afford it. Qualification is worth about €5 million in prize money per team, while Ireland would also be entitled to a share of the €850 million that would be paid for TV rights in Europe alone.
Taking part in the World Cup would also give the FAI leverage when negotiating new sponsorship deals or extending current ones. Without the World Cup, Ireland won’t have a competitive match until September next year, a long period of downtime for any sponsor.
‘‘If Ireland had qualified for the World Cup, then soccer and the Irish team would have been the biggest sporting gig in town in the early summer in 2010," said Michael O’Keeffe, managing director of Pembroke Communications in Dublin.
‘‘This would have given the FAI great scope to attract new sponsors - and indeed may have helped sell more seats and corporate packages for the Aviva Stadium [the former Lansdowne Road].
‘‘Sponsors crave successful teams, and the likes of Carlsberg, Boylesports, Eircom and other major partners of the FAI would have prepared two strategic marketing plans and advertising campaigns based around Ireland qualifying or not making it to South Africa." However, O’Keeffe said there could be a silver lining.
‘‘The FAI did extremely well financially out of the play-offs through French and other TV deals, and the extra revenue from the two games will help offset much of the potential revenue associated with qualification," O’Keeffe said.
‘‘You need to bear in mind that there are major costs when sending a team to a big event such as warm weather training camps, travel and set-up costs, and all the various expenses needed to give a professional team the best support possible for over a month. The World Cup is not necessarily the one-way cash cow people think."
The Irish players are likely to suffer financially from the failure to qualify, as well as emotionally.
Players get paid for playing at the tournament and it also gives them a chance to increase their profile. When the big clubs go shopping for new players after the World Cup, it is the players who have performed well at the tournament that will be foremost in their minds.
Sponsorship deals are also a lucrative earner for players, and the more exposure they can give a brand, the more they will be paid, but the Irish players will miss out on those opportunities.
RTE also got a taste of how badly it will be hit by Ireland’s failure to qualify, after figures showed that the French match drew an audience of more than two million viewers - almost half the population of the country. World Cup games involving Ireland would be likely to draw similar numbers, with huge potential for ad revenue. The broadcaster will now be relying on England games to draw the most interest from an Irish audience next summer.
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