PUBLIC-relations types love the World Cup. Judging by the daily torrent of press release they send out, there is not a single company that hasn’t yet tried to shoehorn itself into the footballing zeitgeist. Business schools are as pushy as anyone. But in some ways this is understandable. FIFA, which runs the competition, might generate $4 billion in revenue—and $2 billion profit—from Brazil 2014. So it is clearly an important business concern.
In fact, according to Thales Teixeira, a marketing professor at Harvard Business School, FIFA is showing too little business acumen. Mr Teixeira has calculated that the World Cup will be garner 770 billion minutes of television attention—on the assumption that 3.2 billion people watch one entire game. In a Forbes article, he goes on: “The fact that most will view the matches as they are played makes the tournament even more valuable to advertisers—a key principle of ‘Attention Economics,’ which focuses on what has become a scarce commodity in an age of information overload. Using a standard cost of $25 per thousand viewers, which is generally charged by broadcast companies for a 30 second ad on prime time television in the United States...FIFA has the potential to generate $23 billion in revenues from TV ads, billboards, and sponsorships in a month.” This, he says, would make FIFA the seventh largest business in the world on an annual basis.
There are business externalities to consider too. Alex Edmans, a professor at London Business School, says his research shows that the emotional deflation which sweeps a nation when it crashes out of a World Cup affects its stockmarket, knocking out billions of pounds of market trade. He told the BBC, “On the Monday following England's loss to Italy the UK stock market fell by 0.34%, when the rest of the world market was flat...and when Spain lost 5-1 to Netherlands, the Spanish stock market fell by 1% the next day when the rest of the world was again flat.”
It can affect work relationships too. According to Raina Brands, another LBS professor, writing in the New York Times, the World Cup can be time for male bonding at the office, to the exclusion of women. With their propensity to talk endlessly in football jargon, “the conversations men have with other men when they watch men playing sports lead to ‘boundary heightening’ behavior that can exclude women. As a result...women may be ‘locked out of the boisterous, informal exchanges that are essential to organizational life.’”
One of the topics that men like to discuss when women aren’t listening is talent. Which footballer has it, which is overrated, and which nations could do with more of it. Such chatter, though, is missing the point according to Roderick Swaab, an INSEAD professor. In fact, Mr Swaab says that teams lose out by having too much talent: “Most people believe that the relationship between talent and team performance is linear—the more their team is packed with talent, the better they will do,” he explains. “Yet our latest research documenting a ‘too-much-talent effect’, reveals that for teams requiring high levels of interdependence, like football and basketball, talent facilitates team performance…but only up to a point. Beyond this point, the benefits of adding more top talent will decrease and eventually hurt the team performance because they fail to coordinate their actions.”
So perhaps talented footballers should start looking for new careers. The Telegraph reports that Vincent Kompany, captain of Belgium, is taking an MBA: “In between matches he has been quietly studying for a Global Executive MBA at Manchester Business School, learning about decision-making, financial analysis, strategy and leadership,” the paper writes. Mr Kompany explains: “I do it because it takes away some of the pressure from football. When you are studying there is no way you have room in your head to think about the next game against United, Liverpool, Chelsea or Barcelona. Sometimes it is a good thing because there is no reason to relive a game 1,000 times before you play again.”
If Mr Kompany is not careful, studying at business school might just end him back up back at a World Cup again. George Washington University business school says it is “extending [its] classroom all the way to Brazil this summer.” Lisa Delpy Neirotti, a associate professor of sport management, is taking her students to the WorldCup to learn how to “run the games”. According to the school: “
Students will learn about the organisational infrastructure, management, integrated marketing and socio-economic and environmental impacts of the WorldCup. They will travel to Salvador, Manaus and Rio de Janeiro for meetings with executives of WorldCup sponsors, organising committees and the US Soccer Federation.
”
And, if its press release is to be believed, students will also be on hand to give instant reaction to games via Skype. If MBA students really are the new football pundits, the game has truly eaten itself.
