S&P researchers join World Cup frenzy

By Doug Watt | June 29, 2006 | Last updated on June 29, 2006
2 min read

In a departure from its usual focus on the financial services sector, Standard & Poor’s has bonded with millions of soccer fans around the world, releasing a new index measuring how countries have performed at the World Cup over the last 40 years.

The results will come as no surprise to those who follow the tournament closely. The analysis shows that Brazil and Germany are clearly the world’s football powerhouses: Brazil has won the coveted trophy three times since 1966 (as well as in 1958 and 1962). Germany is a three-time winner (including 1954, which was not part of the S&P study) and has been runner-up four times since 1966.

Germany is also the only country to proceed past the group stage at every World Cup over the past four decades.

“Could this be an indicator that we should be gearing up for a repeat of the 2002 finals,” S&P asks. “Or will England be able to continue its steady rise since its non-qualification in 1994?”

Argentina, considered a favourite by some this year, has underperformed in the last three cups, S&P notes, compared to its relative highs in 1978, 1986, and 1990.

S&P also looks at the prestigious “golden boot” winner, awarded to the player with the most number of goals in the tournament. Based on data compiled over the past four years, France’s Thierry Henry is the favourite, followed by Brazil’s Adriano, Ruud Van Nistelrooy of the Netherlands and Ronaldo of Brazil.

However, going into the quarter-finals, Henry has only two goals, as does Adriano. Ronaldo is in a group of six players with three goals, while Germany’s Miroslav Klose leads with four. Van Nistelrooy has only one goal and his Dutch squad are out of the tournament after losing to Portugal.

Of course, it wouldn’t be an S&P report without some financial data. The research team examined whether sponsorship of a major event, such as the World Cup, has an effect on a company’s share price.

Using a global database of equity stocks, S&P examined the performance of all the World Cup’s official sponsors over the course of 12 months, beginning six months prior to the start of the month-long tournament and continuing to approximately five months after its conclusion. The performances were benchmarked against the S&P 500 and the S&P Europe 350.

The results, S&P says, were inconclusive. Although the sponsors were mostly the same, including Adidas, Fuji, Anheuser Busch, McDonald’s and Coca-Cola, the 1998 advertisers underperformed both the S&P 500 and the S&P Europe 350 indices, while the 2002 sponsors outperformed both benchmarks.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com


Doug Watt