The Business of the World Cup
Wednesday, June 23, 2010
Here's one formula for calculating the economics of soccer: Winners spend more.
Thierry Amezcua is the owner of Papatzul, a Mexican restaurant in Soho. "Usually, if the team they come to cheer for wins they'll stay and consume more," he says. "It's double the business. There have been a couple days that have been really big."
Here's another formula: You don't have to win to spend.
South Africa tied the first game and lost the second, but business was still booming at South African restaurant Madiba in Brooklyn, says owner Mark Henegen. Henegen says Madiba has tripled its income since the World Cup started. "The bar gets overwhelmed. We went through 72 cases of beer in two days. By Sunday I was out shopping for beer. That's three times the amount of beer that I would go through in a week, so that's pretty intense."
Most people think Americans don't care about soccer, but business in restaurants is proving otherwise. Andrew Riege heads the greater New York chapter of the New York State Restaurant Association. They don't keep sales figures, but Riege has already collected anecdotes about the impact. "I was just in a meeting with a restauranteur and they told me that the game between the U.S. and England was the busiest day of the whole entire year at their restaurant," Riege says. "I think that speaks volumes about the amount of business the World Cup is bringing to restaurants, bars and nightclubs."
The owners of Madiba and Papatzul both say they had to spend money to make money. Morning games forced them to open about three hours earlier than normal and hire more staff in the kitchen and out on the floor.
Henegan says that before the games started, Madiba had only one flat-screen television. "I bought two more cameras and another flat screen TV, a good sound system, a whole new amp, and four more speakers and another projector screen. That's ten grand right there, but we made that back the first game, so that was well worth it."
"I wonder out loud not only how the bars and restaurants are doing, but also the retailers. I have seen more flat-screen TVs being carried into restaurants in the last couple weeks than I've ever seen before," said Robert Walsh, the city's commissioner of Small Business Services.
Retailers like Best Buy don't give sales numbers, but manager Eddie Mora says that it's not hard to spot a World Cup fan making purchases at his store in Union Square. "If someone comes in wearing a jersey, whatever nationality is out there, it's pretty safe to assume that they're watching the World Cup."
It's not just big-box stores like Best Buy that are getting an economic boost from the Cup, says commissioner Walsh. "The restaurants are happy, the cafés are happy, but there is something that is much more powerful taking place. And that's in the shoe repair shop, the bodegas, the delis. It has trickled down into those businesses."
Problem is, there are less than three weeks to go.
"We're going be very sad when it ends," Walsh says. "Because it's been very exciting and a lot of fun, and, business-wise, good for sure!"