They may have screwed us over in the GFC and their ex-employees are in a position to do so again given their prominence in this and any other American administration, but at least Goldman Sachs are giving something back to the community. Well, they have given us a 2010 World Cup Research Report put together by people in the various World Cup countries analysing their home country’s chances, except for North Korea, whose chances are assessed by the South Korean analyst, preparatory to the hostile takeover at 10 cents in the dollar (if the North Korean people get lucky).
This is, unsurprisingly, a cross between a form guide and a merchant banker prospectus. The cross national perspective is valuable, especially here in Australia. Australia is rated as a 100/1 chance to win the World Cup with only 8 of 32 countries less highly rated than the Socceroos. We are the most favoured Asian team with South Korea at 125/1, Japan at 200/1 and North Korea at 1000/1, which is the same as the odds quoted for New Zealand.
The study also addresses the issues surrounding the selection of World Cup hosts for 2018 and 2022 which provides an interesting contrast to David Penberthy’s nationalistic chest beating about the chances for the Australian bid for the 2022 World Cup. GS conclude that 2018 is just about locked in for a European country, (obviously even more likely since Australia withdrew from 2018) probably Russia or Spain/Portugal. Following that in 2022 they see FIFA choosing its best possible expansion market with the USA being their most likely candidate. Choosing the USA is seen partly as an exercise in buying time to allow China to put in a bid for 2026, thus bypassing Qatar, Australia, Korea and Japan as an Asian host nation. Otherwise the continental rotation policy means that China may not host a World Cup this side of 2050. And I don’t think anyone at FIFA would want that.
Australia’s chances are dismissed because of our location, the small possibility of expansion in a limited market and our ‘unfriendly’ football environment (see the “light hearted” kiss off from Pim Verbeek now that he can say what he really thinks about AFL and Rugby).
Another interesting perspective on Australia’s chances of hosting the World Cup was provided by John Birmingham in Sport & Style (no link) this month – we still call it soccer, not football, and we really don’t care enough between World Cups. We still like our AFL and Rugbys way too much for FIFA and we don’t have that big a population anyway. Sepp Blatter, the head of FIFA, has already marked our card.
If we refer back to the Golden Sacks report we can see how much FIFA gets for the World Cup TV rights, and hence how much we really care. The Australian rights for 2010 and 2014 were bought for US$15M, or $0.70 per capita. This is half of the amount paid per capita for the US rights and a significantly smaller percentage of the amount paid for the rights in countries where they do care. Italy, the USA, Germany, France and the UK all paid over US$300M for the 2010-14 TV rights. World Cup to Australia – I don’t think so.
The Goldman Sachs estimation of Australian chances when playing soccer is:
A probit model of World Cup qualification reveals that the probability of Australia reaching the World Cup when its terms of trade approach current levels exceeds 90%. Moreover, Granger causality tests indicate it is terms of trade spikes that cause World Cup entry, whereas reverse causation fails. Given the terms of trade will be around 20% higher in 2010 than 2006, the model predicts that Australia’s chances of entering the final round of the 2010 World Cup is high! Note, we have not included a dummy variable for Italy’s tendency to fall over inexplicably at crucial moments.
A different perspective on Australia’s chances in the 2010 World Cup is provided courtesy of the Guardian. “A second consecutive finals appearance may not bring improvement.” Apparently Australia also has “undoubtedly the crappiest template in world sporting nicknames, in which Australian sporting teams must be known as the Somethingroos, they are the Socceroos.” Yes, pay that, cobber!