Conversion to Euro: how the economy of the main tournament in 2016

On Friday evening, June 10, at the stadium in the Paris suburb of Saint-Denis took place the official opening of the European championship on football of 2016. The current championship — the first in the history of the championship, which will be attended by 24 national teams (in the previous 20 years, participated on 16 teams). In the end, the number of matches in the championship will increase from 31 to 51. Given this, the current Euro has a chance to put the record cash receipts because of the larger number of tickets sold, television broadcasts and came to the competition football fans.

How much was spent by France for the organization of Euro 2016?

The main costs of France of the Euro was associated with the construction and reconstruction of stadiums. Total cost of construction work amounted to €1.7 billion Of which 62% was invested from the private sector, and 38% were budget funds.

“Examples from other countries prove that the economic recovery from the tournament are quite modest and of short duration,” say the economists Bloomberg Intelligence Maxim Subaihi and Jamie Murray. “I hope that the country will enjoy the coveted weeks of the holiday, however, requires much more than the game to improve the performance of the French economy”, — they emphasize.

It is worth noting that the net income according to the results of the championship can be considered a good result. Sometimes the host country of Euro is facing multibillion-dollar losses, such as happened with Poland. According to the Polish Ministry of tourism and statistics, the overall effect on the economy from the Euro from 2008 to 2020 will amount to 21.3 billion zlotys (approximately €5 billion), while total investments in infrastructure projects related to Euro, amounted to €25.6 bn

How many will work with UEFA on what?

The revenue of the organizer of the championship, Union of European football associations (UEFA) since 1992 has grown from tournament to tournament: if in 1992 on the results of the European championship in Sweden, it was €40.9 million, then in 1996 in England (then the number of teams has doubled from 8 to 16) — €147.3 million, and by 2004 (Portugal) reached €855,2 million At the last championship in Poland and Ukraine, UEFA has saved €1.39 billion.

At the beginning of March, exactly 100 days before the start of the championship in France, UEFA announced that expected revenues from the Euro will be €1.9 billion and in the last four tournaments, the largest share will be in the sale of TV broadcasting rights of €1 billion and another €400 million will be income from the sale of sponsorship rights, licensing and merchandising (growth in comparison with 2012 by 40%).

The second largest source of income for UEFA calls selling tickets for the matches. According to initial estimates, it can bring Federation up to €500 million Total UEFA produced more than 1 million tickets of a different value. The cheapest (from €25) — tickets for the matches of the group stage of the fourth category (the tribune outside the gate of the goalkeeper). The most expensive (from £ 895) — tickets for the final match of the first category (Central tribune).

UEFA have set for fans a number of limitations: available only the tickets for one person at the same time you can buy up to four tickets, can’t buy tickets for two matches in the same day, you cannot buy tickets at the stadium on game day. In addition, the website of the European championship became the only legal venue ticket sales.

A week before the start of the championship of consumer Association Which? conducted an investigation, concluding that many third-party sites illegally resell tickets to the championship. Even if we forget about multiple cheat cost, fans can simply deny access to the stadium for illegally obtained tickets.

How Russia and other countries have spent on accommodation for athletes?

Participating in the championship, 24 teams reside in the four – and five-star hotels throughout France. Of them in the capital region (Ile de France) located four teams: players from Ireland, Portugal and Russia, as well as the hosts of the championship. Each team is also allocated a training field nearby.

In early June, British newspaper the Daily Mail compared the placement of players on the average cost of booking a hotel room. More than all settling in England by booking a hotel in the Paris suburb of Chantilly. Each room category “Deluxe” came out team in a £500 (€635) per night. The cheapest accommodation in the national team of Switzerland in a four-star hotel in Vichy — £86 (€110) per person per night.

The Russians staying in the hotel at the Golf club in the southwest Paris suburb of Saint-cloud. According to the Daily Mail, the man-a night in hotel will cost the Russian team at £246 (€312). These figures approximately coincide with the proposal for the hotel on the website

According to the RFU, the Russian delegation consists of 23 players and 23 employees coaching and administrative staff. According to the schedule of preparation for the European Championships, the Russians trained at Saint-cloud in the morning of 6 June. The tournament will remain at least until their last group match, which will be held the evening of June 20 in Toulouse. Accordingly, the Russian team will play in its basic hotel for a minimum of 15 nights. A group of 46 people in total costs can range from €215.3 thousand or about 15.5 million rubles.

How profitable for France could be the EURO?

A positive effect on the French economy from the championship of Europe will amount to €1.26 billion, according to the research of the French Centre for law and Economics of sport (CDES).

For the month that will last the championship, the stadiums will be visited by 2.5 million people, which expects UEFA will spend approximately €1 billion during the tournament. Among fans, according to chambers of Commerce and industry of France (organizations representing the interests of French businesses abroad), there will be 1.5 million foreign tourists.

According to estimates CDES, the fans will spend about €800 million (including €200 in a specially equipped French cities fan zones for watching matches). Total goszatraty, according to CDES, amounted to €788 million (this figure includes investments in the construction and renovation of stadiums and equipment of fan zones). The Euro will help to create 114 thousand jobs (20 million in the construction sector, 94 thousand in the service sector).

The question of the accommodation of foreign fans almost fell out of French hoteliers with UEFA. In early January, the football authorities announced that the sixth national sponsor of the European championship (along with the ten global sponsors) for the first time in the history of UEFA will be a service of short-term rentals, company Abritel-HomeAway. “Together we will be able to place in France, the millions of fans who will arrive this summer at the largest football event in Europe”, reads the press release. Hotel chains of France considered that such a call to the fans violate the rules of “fair play” and threatened to stop paying the tourist tax for the duration of the tournament.

According to the world tourism organization (UNWTO), France is the most popular place in the world for annual number of tourists. At the end of 2014 the country was visited by 83.7 million tourists, the income from which amounted to USD 55.4 billion (about €45 billion) — the fourth largest after USA, Spain and China.

The main revenues of the country from the hotel business are the tourist tax of €0.2 to €1,5 per person per night, depending on the class of the hotel. As stated by the head of the Union of hoteliers UMIH Roland EGI, the state may be short of €7.5 million, if the hotel still will boycott the payment of tax at the time of the championship. Official hotels, complains of EGI, taking on 95% of the tax burden, having only 50% of the housing stock, when compared with the services of rental housing.

What are the benefits from the championship can get the business?

In early April, the Bank Societe General has chosen a whole “soccer team” of companies whose shares will rise due to the holding of the championship of the continent. In the review of the Bank included 11 “core” companies and 12 of “players safety”. In the main composed of three carrier (Ryanair, EasyJet and Air France-KLM), British broadcasting Corporation, ITV, producers of Carlsberg beer and Heineken, the British bookmaker Paddy Power, manufacturer of sports goods Adidas, French construction company Vinci and Eiffage, a French group of hotels AccorHotels. In the “spare part” — Coca-Cola, Eurotunnel, the French TV channel TF1 and the French producer of luxury goods Kering (which owns brands like Brioni, Gucci and others).

Of the companies that were named Societe General, three — Adidas, Carlsberg and Coca Cola — are among the worldwide partners of the European championship in 2016. All these partners have UEFA ten, among them — Chinese electronics manufacturer Hisense, Turkish Airlines and the State oil company of Azerbaijan (SOCAR). In addition, at Euro UEFA will be six national sponsors, including Bank of Credit Agricole, the lottery company FDJ and service on short term rental HomeAway Abritel.

Two construction company from a review of SocGen, Vinci and Eiffage are the main developers of the championship. The championship game will take 10 stadiums, four of which were built “from scratch”, and six were renovated. Of the four new stadiums, three (in Bordeaux, Lyon and nice) were built by Vinci company (its subsidiary, Vinci Concessions is a shareholder in North-West concession company, supervising paid section of the M11 highway in Russia). The total value of these projects amounted to €828 million.

How will the winners and participants?

Record profits, who will get the UEFA due to the expansion of structure of participants of the championship will also help to increase the prize money for the national federations of those countries whose teams are involved in the Euro. At the current Euro total amount of prize money of €301 million (2012: €194 million).

The winner of the tournament will receive €27 million, while the remaining participants at least €8 million (the final result will depend on how far the team in the tournament). These amounts are more than modest in comparison with those who get football clubs in the national Championships. In particular, the winner of the English Premier League, Leicester city has received from the Football Association €100 million.

What do you expect from the championship, the bookies?

During the world and continental football tournaments traditionally aktiviziruyutsya sports betting. According to the estimates of one of the world’s leading bookmakers, William Hill, the British total on the line will be delivered approximately $727 million, about 16% of the money was put on the fact that the European champion will be England: William Hill odds on the outcome of the tournament is 9.00 (winnings will increase up to 9 times). The industry rates in the case of the British victory could lose about $72.6 million For bookmakers is profitable if you can play the bet with the smallest ratio, that is the main favorite, which at the same time the Euro is France (with a weight of 4.00), but the home team has only 7% rates.