risk Vs reward Archives - Performance Communications

With 2014 just around the corner, Brazil is soon to be at the centre of the world’s attention with the most successful national team in World Cup history hosting one of the most eagerly anticipated tournaments in years. The world’s greatest players will be on show and Brazil has promised a party.

The country has been given an opportunity to ‘flex its pecs’ but the reality for emerging nations bidding for ‘mega-events’ is they may be biting off more than they can chew.

Brazil won the World Cup bid with insufficient infrastructure and stadia in place to cope with the tournament’s demands. As a result 12 new luxury stadiums were commissioned and the real expenses are now becoming apparent. The budget spend is predicted to have risen from around 6 billion to 17billion (£) – a significant increase for a country trying to battle with the turbulence in the world economy.

The fact that the government spend on health and education has been cut whilst investment in sporting projects continues to grow is a key factor that has recently led to protest on the streets of Rio.

Can we blame them? It’s reported that 170,000 people in Brazil are at risk of losing their homes (or have already lost them) as part of evictions related to the World Cup and the Olympics.

When bidding at this scale it’s about risk versus reward and there are obvious benefits that come from winning a bid of this scale that include;

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Increase in employment
The feel good factor that will transcend through the country
The international prestige that comes with showcasing a mega-event
The increase in sport participation
And most importantly the increase in tourism and the economic benefits that brings.

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I think it’s too early to say whether or not the negatives of hosting the tournament will outweigh the positives but it has to be acknowledged that the World Cup (& Olympic Games) will help establish a global sporting commercial presence far stronger than they’ve ever had before.

This has already been reflected by the invasion of global sports marketing agencies including Octagon, IMG and Havas, all setting up camp in South America creating an ongoing sports marketing presence that wouldn’t have existed without the investment into the World Cup.

Worryingly for the Brazilian public is by the time the Cachaça is finally cleared, it won’t be long before the sporting world will start gearing up for the biggest fixture on the calendar; the 2016 Olympics in Rio, just 24 months later, likely to result in more hard truths for the Brazilian people.

I think things will continue to bubble under in Brazil and I’m not sure if the long term benefits of winning the World Cup bid will ever be acknowledged by the public who are paying for it now. I do, however, genuinely believe that if the home nation wins the competition all of the disruption we’ve seen in the lead will be quickly forgotten. Either way, for everyone’s sake, let’s hope the boys in yellow & green don’t get knocked out in the group stages!

Adam