Saturday, December 10, 2005

Another World Cup, another new ball

Adidas presented the "+Teamgeist" ball on Friday ahead of draw for the World Cup finals. The ball is said to be so technologically advanced that the German sportswear giant assured the performance is "unprecedented." France midfielder Zinedine Zidane put it in simpler terms. "When you kick it, it goes in the right direction," Zidane said. "For attackers, it is very good," he said. "It is the way a ball should be made," England captain David Beckham said after trying out a few of his famed free kicks.

The ball will get its first regular trials in US Major League Soccer next year. MLS will use it when its 2006 season begins 1 April, league senior vice president Dan Courtemanche told AP. MLS signed a 10-year, $150 million sponsorship contract with Adidas last year.

Adidas expects to increase sales of soccer-related goods to more than 1 billion euros in 2006 up from 900 million euros in 2004. But analysts have warned against companies spending too much on marketing. Adidas saw a temporary profit decline in 2002 due to higher marketing costs ahead of the World Cup in Asia.

Broadcasters, television set makers and retailers are hoping fans will flock to buy new high-definition TV (HDTV) sets to enjoy sharper pictures. The World Cup will be the first major event to be broadcast in HDTV in Europe. Germany’s only pay-TV broadcaster, Premiere hopes the tournament will be a showcase for HDTV, encouraging subscribers to pay a premium for the service in future. Retailers such as Metro, which owns electronics stores, and TV makers Loewe, Medion, Sharp, Sony and Philips are expected to see improved sales.

World football body FIFA has contracted 21 firms to sponsor the event, among them Deutsche Telekom, Hyundai, Coca-Cola and Yahoo. LRP analysts say the companies paid 643 million euros in total. With the exception of Anheuser Busch, whose Budweiser brand will be the only beer to be sold in stadiums, sponsors are mainly hoping to raise brand awareness, which will not necessarily result in more sales in the short term. “Sponsors of major sporting events benefit from brand awareness ... This should boost share prices,” said Thomas Kalich at Frankfurt Trust, which has launched a fund investing solely in sponsors of major sporting events.

Fans are also expected to gamble on the World Cup, boosting sales at major international betting firms like Austria’s BETandWIN and Britain’s William Hill. German rivals Tipp24 and Fluxx are also expected to enter the sporting bets market, but will play a minor role due to regulatory obstacles at home, according to analysts. Other hot soccer bets among investors include agency CTS Eventim, which sells match tickets. But the stock has already risen 300 percent this year and it is trading at 38.8 times 2005 earnings, making it more expensive than most German media peers, according to Reuters data.

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