The 2018 FIFA World Cup in Russia kicks off Thursday without team USA for the first time since 1986, which is a huge disappointment for first time broadcast partner Fox (FOXA - Free Report) . But American soccer fans woke up Wednesday to news that North America won the rights to host the 2026 World Cup, beating out Morocco. Here is everything you need to know about the bid, its economic impact, and what companies stand to benefit. Hint: Fox is already celebrating.
FIFA announced, in a 134 to 65 vote, to award the 2026 World Cup to the U.S., Canada, and Mexico’s joint bid. The reasons here are pretty simple: money. North America is expected generate $14 billion in revenue and $11 billion in profits for FIFA, which is huge for an organization that makes 90% of its money from the World Cup—Morocco reportedly couldn’t offer half of that figure. Soccer’s largest governing body was also under pressure after awarding the 2018 and 2022 tournaments to more controversial hosts, Russia and Qatar.
The North American bid included 23 host city candidates, including three from Canada, three from Mexico, with the rest spread out throughout the U.S. Dallas, Los Angeles, and New York/New Jersey are the three cities vying for the rights to host the final.
Under the current plan, the U.S. is set to host 60 matches, with Canada and Mexico each set to hold 10. If that number seems a little off to some soccer fans, it’s because the 2026 World Cup will see the world’s biggest sporting event expand its field for the first time to 48 teams up from 32, for a total of 80 matches—up from 64 under the current format.
The North American bid noted that it expects the top six games, which would mean the opening games in all three countries, along with the two semifinals, and the final, to compare favorably to Super Bowl ticket sales as well as overall hospitality figures. The committee projects the overall economic impact will be roughly $5 billion, with $5.8 billion worth of ticket sales expected.
The clear winner of the 2026 World Cup bid is Fox and Spanish-language network Telemundo, which is owned by NBCUniversal (CMCSA - Free Report) . The two broadcast powers won the U.S. television rights for the 2018 and 2022 tournaments for roughly $1 billion combined back in 2011. Then, somewhat quietly in 2015, FIFA awarded Fox and Telemundo the rights to the 2026 World Cup without opening up the bidding. The move sparked outrage from ESPN (DIS - Free Report) and other networks.
Fox reportedly only paid 10% more than in its current $425 million contract. On its face, this was a somewhat crazy move because Fox had not even broadcast its first World Cup game at the time, and no one knew what country would host the 2026 tournament. Diving a little deeper, the answer is somewhat clear. FIFA didn’t want any legal trouble from Fox, since, in a shocking move, the 2022 World Cup in Qatar will be hosted in the fall or winter due to heat concerns, which directly conflicts with the NFL season and other programming.
Fox and Telemundo now own the rights to the world’s biggest sporting event on home soil. And this means live games in primetime, which is a trully amazing opportunity that likely has Fox, Telemundo, and FIFA’s marketing partners giddy. In a media landscape driven more and more by the Netflix’s (NFLX - Free Report) and Amazon’s (AMZN - Free Report) of the world, a month of adverting live in primetime is almost invaluable.
Current FIFA and World Cup sponsors, which spend upwards of $50 million a year, include Coca-Cola (KO - Free Report) , Visa V, Budweiser (BUD - Free Report) , McDonald’s (MCD - Free Report) , Adidas ADDYY and more. With that said, major U.S.-based companies now have even more incentive to get in on the World Cup.
Aside from big opportunities for staples like Nike NKE, it could be a chance for Under Armour UAA to break into the World Cup scene via a team-based sponsorship, while everyone from YouTube TV (GOOGL - Free Report) to Twitter (TWTR - Free Report) and other tech companies could work their way in somehow. Meanwhile, Johnson & Johnson (JNJ - Free Report) , AT&T (T - Free Report) , and other giants are current official sponsors of U.S. Soccer.
Soccer has been the supposed sport of the future in the U.S. since it hosted the 1994 World Cup. Today, the world’s most popular sport sits just behind baseball and basketball as Americans’ favorite sport, according to a Gallup poll (basketball was favored by 11%, with baseball at 9%).
Meanwhile, soccer jumped up to 7%—its highest spot ever on the annual poll. And a lot can change in eight years, especially as money pours into the MLS and the NFL’s ratings decline.
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