World Cup to take bite out of worker productivity
It may not be as bad for American productivity as March Madness, but the World Cup will likely wreak havoc with productivity everywhere else on the planet.
Studies have estimated that about 80 percent of the world's population will watch the games beginning tomorrow in Germany at some point. More than 3 million soccer fans are expected to attend the games . Billions more will watch the action on television or on the Internet, with more than 300 million viewing the July 9 title game alone.
"Almost the whole world will watch what is the biggest global sports event," notes Joschka Fischer, Germany's former foreign minister, kicking off Goldman Sachs weighty 2006 report on the World Cup's effect on economic growth. "Only the Olympic Games achieve a similar level of worldwide attention and media coverage."
Those eyeballs have attracted big advertisers who are estimated to spend more than $1 billion to promote their wares. Many of the sponsors are American companies. Budweiserthe American, not the German brewis the official beer and its maker, Anheuser-Busch, will sponsor a player of the game. Other sponsors include Coca-Cola, McDonalds and Nike.
Wal-Mart is setting up soccer demonstrations and Astroturf playing fields in some U.S. stores. In Argentina, the company will provide shoppers a place to sit and watch the games.
But while many companies are set to cash in on the glory and the hype surrounding the World Cup, others will likely lose money because of it. As the Goldman Sachs report notes, "economic productivity will drop."
The World Cup will likely cost American companies 10 minutes of productivity a day for 21 days, according to the outplacement company of Challenger, Gray & Christmas. That comes to about $121.7 million in lost productivity in the US, a large figure, particularly painful for any company dominated by Englishmen, Germans or Brazilians perhaps.
But for real pain, one has to look south of the border or across the sea. The World Cup will cost the British economy about $7.36 billion in productivity, estimates the British law firm Brabners Chaffe Street. And that is if British workers just check the games out for an hour every day.
With the BBC running all of the games live on their website, that may be a conservative figure, so most managers are planing to take a hard line on mystery illnesses and other forms of absenteeism during the games, according to surveys by England's Employment Law Advisory Services (ELAS). Only 8 percent of managers said they would allow workers to take the next day off if England wins the trophy.
In Brazil, things may be even more dire. Brazilian Michael Reade, who runs Saci Solutions, a New York software database firm, notes that there is a huge increase in the number of televisions sold in the country prior to the games, that banks close and cities virtually shut down during big games by the Brazilian team, who are the favorites to repeat their 2002 title.
What if a manager tells an employee he can't go see the game. "That doesn't happen," Reade says, adding that he has already mapped out his World Cup schedule in New York.
"I will be watching 19 games between June 9th and June 23, which is the first phase," before the knockout games, he says. "Meetings will have to be scheduled at different times." Of course he could cut down if forced. "If I was not self-employed," he concludes, "I would negotiate to only see the Brazilian games."
Italy isn't any better. "It shuts down completely," says Elisabetta Bourtin, a former Fendi employee who now lives in New York. "Everyone goes to bars or friends houses. Those that remain at work, she adds, will still take off the two hours or so needed to watch the game on a televison there.