It is an analysis of football market in Brazil. How corruption is related to world cup in Brazil? Forecasting in world cup and its market etc are explained.

1. Brazil 2014WorldCup
and the market for
forecasting
By,
Fernando Posadus, Columbia University

2. Economic
implications
for Brazil
 Brazilian Ministry of Sports estimates that the country will grow in
USD $70 billion due to theWorld cup.
 $30 billion in direct taxes
 $10 billion in additional indirect taxes,
 $3 billion of an increase in consumption of Brazilian goods and
services.
 $2.5 billion additional spending in travel industry by 600 000
tourists.
 $21 billion for infrastructure. The government expects 332,000
permanent jobs and 381,000 temporary jobs to be created
through 2014 mainly because construction of hotels,
airport and to remodel 18 stadiums.
Forbes

3. Delays and
corruption
 Despite the investments made, a fifth of the projects were
dropped because they could not be delivered on time, while
others won't be finished until after the Cup, such as Rio de
Janeiro's international airport
 Bullet train Rio-Sao Paulo was never initiated.
 Four stadiums that have only third-tier football teams: Manaus,
Natal, Cuiaba and Brasilia. Brasilia was the most expensive
stadium and its price nearly tripled from the original estimates.
 Initial estimated cost for stadiums was less than USD $2, the final
cost was USD $3.52 billion.
Reuters & Bloomberg

4. Context
 Protest in June 2013 against the increase in buses fare (5.2
rupees).
 Then protest for public services, corruption, the cost of
living, ineffectual government and more
 Government highly criticized for the spending.

5. Context II
 Support for the tournament has already plummeted from 79% in 2007 to 48%
in 2013.
The scale ofWorld Cup protests will depend on:
 How well the event is run
 The performance of Brazil’s team on the pitch. If the national is eliminated
early, Brazilians will question more the expense.
(BrunoTorturra, Midia Ninja, a brazilian media group)

6. Context III
 The stock markets of host countries have historically always outperformed
slightly in the month following the event. But, on average, the outperformance for
host and victor alike tends to fade very quickly and often turns into losses.
 World Cup will have an impact on the popularity of President Dilma Rousseff.
Expected to stand for re-election in October.
 No matter what happens with the World Cup or the election, analysts say Brazil’s
economy is large enough to continue to offer interesting opportunities. Brazil’s
high interest rates are offering real returns on government bonds of 6 to 7 per
cent.
FinancialTimes

7. Football predictions and
forecasting

8. Goldman
Sachs

9. Goldman
Sachs
 Based on a regression analysis uses all the official football
matches (no friendly games) since 1960. The sample is
14,000 observations.
 Dependent variable, the number of goals scored by each
side in each match.
 Poisson distribution
 Explanatory variables:
1. Difference in Elo rankings between the teams.
2. The average number of goals scored by the team over
the last ten official games.
3. The average number of goals received in the last five
official games.
4. A country specific dummy variable indicating whether
the game in question took place at a world cup.
5. A dummy variable indicating whether the team played
in its home country.
6. A dummy variable indicating whether the team played
in its home continent.
They used the coefficients of the six variables to run a
Monte Carlo simulation. The result of such simulations are
used to calculate the probability of the countries to reach a
particular stage in the Cup.

10. Goldman
Sachs

11. Other
predictions
Bloomberg: Brazil 1 – Spain 0
Itaú Unibanco (Brazil largest bank): Brazil – Argentina
The Economist:
Probability given by:
The outcome of every official FIFA game since 1993
Relative ranking of teams when they've played one another
The location of games

12. Why so much
interest?
 World Cup Brazil will generate $4 billion in total revenue for FIFA,
or 66% more than the previous tournament in South Africa in
2010.
 Most of the money will come from the sale of television and
marketing rights.
 FIFA will make total payments of $576 million to the participating
associations (37% more than SA).
 About 70 million prizes (75% more than SA). Near $35 million for
winner and $8 million for the 16 teams eliminated in the group
stage (the per-player, per-day amount will be $2,800).
Forbes

13. Why so much
interest?
 Global sports industry is worth between €350 billion and €450 billion.
At Kearney
= GDP Cameroon

14. Why so much
interest?

15. Goldman
Sachs
When will India
andChina play
in aWorldCup
Final?
 Population
 Popularity of the sport
 Performance in other sports
INDIA
 Ranked 147 out 207, below Ghana,
Haiti, Rwanda, Gambia.
 Why is the country unable to
produce 11 players out of 1.2 billion?
 Poor infrastructure
 Competition from cricket
 Less urbanized (football played in
rural areas which make difficult to
reach national levels)
 Weak administration.
Administrators not linked to the
game (political appointees).
 Lack of training