The World Cup is the globe’s biggest sporting event, with the 2014 iteration of the tournament being seen by over 3 billion people, including more than 1 billion watching the final. With that many eyeballs on the event, there’s a huge opportunity for numerous brands to score big and raise their profile on a truly global scale.
The 2018 World Cup kicks off in June in Russia, with 32 countries from around the world meeting on the pitch for a shot at global football supremacy. Unfortunately for brands hoping to reach the lucrative American audience, the United States is not one of those countries. The United States failed to qualify for the main event for the first time in over three decades, suffering an embarrassing 2-1 defeat to Trinidad and Tobago during the final day of qualifying, which eliminated them from the tournament.
One of the biggest losers to come out of that was Twenty-First Century Fox Inc (NASDAQ:FOX), which outbid Walt Disney Co (NYSE:DIS) for the broadcast rights to all FIFA World Cup tournaments from 2015 through 2022. It’s estimated that Fox will lose as much as $20 million in advertising revenue due to the absence of the United States team from the 2018 event, which may have been given special significance among U.S viewers because of where it’s taking place.
On the other hand, numerous companies are still poised to drive revenue and earnings growth thanks to the massive event, with the goal of building on that momentum after it’s over. While the U.S market won’t be as rapt, other wealthy nations, particularly in Europe, will be engulfed in World Cup fever.
Below, we’ll look at three companies that should enjoy meaningful short-term gains from the 2018 World Cup. For investors looking for appealing longer-term investment opportunities, don’t miss out on our flagship “Best Performing Hedge Funds Strategy”, which invests in the consensus picks of the top 100 best performing hedge funds every quarter. This strategy gained 4% last quarter vs. a loss of 1% for the S&P 500 ETF (SPY). Since its inception in May 2014 this strategy’s picks have returned 74.4% vs. 49.7% for the SPY. You can see our latest picks by trying our newsletters free of charge for 14 days.
Adidas AG (ADR) (OTCMKTS:ADDYY)
Adidas will be sponsoring 11 of the 32 teams in the main event, including Spain, Germany, and Argentina, three of the top five favorites to take home the trophy, as well as the host Russians. Adidas expects a huge jump in jersey sales this year because of that, and the company also functions as the official sponsor of the World Cup itself, which includes branded balls and equipment.
While Adidas AG (ADR) (OTCMKTS:ADDYY) CEO Kaspar Rorsted recently told CNBC that this year’s World Cup will be commercially less strong (than 2014’s) due to geopolitical tensions involving host nation Russia, among other things, he stated that the Adidas brand will nonetheless benefit from the huge amount of exposure it will get during the world’s biggest event. Shares of Adidas have fallen by nearly 10% in the past two weeks, offering a nice entry point ahead of the World Cup.
On the next page we’ll look at two other companies that will benefit financially from next month’s World Cup.
Comcast Corporation (NASDAQ:CMCSA)
While Twenty-First Century Fox Inc (NASDAQ:FOX)’s U.S broadcasting rights for the World Cup took a big hit due to the U.S not qualifying, the same can’t be said about Comcast Corporation (NASDAQ:CMCSA)’s Spanish-language U.S rights, as held by the company’s subsidiary Telemundo.
With several strong Spanish-language teams competing in the event, including Mexico and Argentina, Telemundo feels confident in its World Cup success, and advertising dollars appear to be backing that up. In fact, Fox’s loss appears to be Telemundo and Comcast’s gain, as ad sales for Telemundo’s World Cup coverage picked up steam after the U.S was eliminated. Close to 75% of the ad inventory had already been sold as of early-March, with more than 20 advertisers on board.
Domino’s Pizza, Inc (NYSE:DPZ)
One of the 11 biggest fast food franchises in the world in 2017, Domino’s Pizza, Inc (NYSE:DPZ) has traditionally performed well during major sporting events, including past World Cups, as consumers host viewing parties or simply order in for themselves to watch the games. Domino’s has enjoyed double-digit year-over-year sales increases during the six-month periods covering each of the past two World Cups, and while the effect may be less pronounced in the U.S this time around, Domino’s growing presence in Europe, particularly in the U.K, should pick up that slack.
In an effort to capitalize on “pizza purchasing triggers”, Domino’s Pizza, Inc (NYSE:DPZ) recently began sponsoring Sky Sports News in an effort to grow awareness among U.K sports fans ahead of the World Cup. Sales in the U.K and Ireland grew by 10.4% in the first-quarter of the year, with digital sales rising to nearly 80% of total sales.