What is the economic impact of the Rugby World Cup?

The first shots of the IRB Rugby World Cup have been fired in France, titans have been sunk, changing rooms are rife with the walking wounded and rugby fever is at a pitch.

But, the impact of the Rugby World Cup far exceeds entertaining crowds with breathtaking tries and eliciting jeers from aggrieved crowds for off-the-ball scuffles. There are numerous economic factors that fluctuate with the fortunes of the respective teams.

“The economic aspects are, of course, diverse. It is a long tournament and analysts have already warned that it can have an influence on people's productivity,” explains Prof Waldo Krugell, economic expert at the Faculty of Economic and Management Sciences of the North-West University (NWU).

“With South Africa's matches being played on Sundays, a win or a loss can cause an absence from work on Monday. However, the beer industry is not sure if that will be the case. Consumers are struggling financially and loadshedding means that taverns cannot always keep the beer cold. Where people are wary of crime, they may not leave the house to watch matches and this dampens spending,” says Krugell.

“Internationally, a lot of research has also been done on the influence of sports sentiment on the stock market. When a country's team loses, investors are somewhat depressed, and the next day is often a bad one on the stock exchange. The research has found that this is the case for the FIFA World Cup as well as for international cricket and rugby matches. Other research, in turn, looked at what happens to the stock prices of the big sponsors. In the case of the PGA golf tour and American NASCAR Cup races, sponsors' stocks do better for the duration of the competition,” Krugell explains.

He does, however, paint a pleasant picture for connoisseurs of certain bubbly beverages.

“Let us enjoy the rugby, and when you have a drink, make it a beer and do so responsibly. Our locally produced beers are a product with a largely South African content, and their production process creates jobs and supports small farmers. With that, good luck to the Boks – I am sure that you will make us proud.”

*During the 2019 IRB Rugby World Cup in Japan, more than 857 million people tuned in to the tournament across the globe.


Prof Waldo Krugell

Submitted on Wed, 09/13/2023 - 15:08