“Amongst all unimportant subjects, football is by far the most important.”-Pope John Paul II
If you happen to live in Saudi Arabia, you have an unexpected day off today: King Salman declared Wednesday a national holiday in celebration of the Saudi soccer team’s stunning upset victory over Argentina. Think about the major economic impact of an added holiday for an entire country. Big!
But the economic effects of a single country’s holiday are slight compared to the overall economic impact of the tournament worldwide due to workers watching games during work or staying up late or getting up early to watch games and missing out on sleep.
The World Cup happens every four years and is the most-watched sporting event in the world. “The final game alone receives 600 million views, over twice as much as the Olympic opening ceremony, the second most viewed sporting event. The average number of views per match, 95 million, is larger than the World Series.” Source.
At our office, we’ve had World Cup games on the TV in our cafe area. And I’m sure a number of us follow games from our desks. The World Cup is hosted by Qatar, which is 8 to 11 hours ahead of US time (depending on your time zone). This means that nighttime games in Qatar (which is when most of them occur) are during working hours in the US. Check out this chart from Invgate of how many hours of games occur during working hours for various countries.
For the 2014 World Cup, the US experienced an estimated $1.68 Billion of lost productivity. But that World Cup was in Brazil, which is close to US Time Zones; we can expect more workers to be distracted by the World Cup during business hours due to Qatar’s time zone difference. I couldn’t find a good estimate for lost productivity globally, but I expect it is huge, given how popular soccer is outside the US.
Don’t believe that the World Cup creates distraction? A 2012 paper on stock trading during the 2010 World Cup and found that when the national team was playing, the number of trades dropped by 45%, while volumes were 55% lower. And what was happening during games affected the markets as a goal caused an additional drop in trading activity by 5%. The researchers also found that local markets decouple from global markets when a country’s home team is playing suggesting that traders aren’t paying attention at work. Fascinating.
Another study found that what happens on the soccer pitch affects investor mood as a loss in the World Cup elimination stage leads to lower returns for the home country’s stock market of about -0.5% (which is a significant anomaly).