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Business

the victor the spoils?

Released at: 05:53, 09/07/2014

the victor the spoils?

$10 million may seem like a fair price to secure the broadcasting rights to the World Cup in football-mad Vietnam, but broadcasters have so far been reluctant to open their wallets.

by Nam Tien

“Goooaaaaaall” the crowd at the Lan Anh Club in Ho Chi Minh City screamed when Brazil netted their second goal to clinch the World Cup Final against Germany in 2002. Around the country, from cafés to pubs and from plains to plateaus, millions of other people, young and old and in between, also screamed in celebration. Vietnamese love their football.

No reliable figures have been put together to accurately determine the number of people who watch the World Cup in Vietnam when it comes around every four years. According to expert estimates though, the figure for the 2002 tournament was probably some 40 million, or more than half of the country’s population at that time. No other event attracts such an extraordinary level of interest and the huge numbers present opportunities to those with business acumen. Not only the country’s football fans are eagerly awaiting the start of this year’s World Cup in Brazil in June but also its enterprises, many of who are offering attractive services and promotions to take advantage of the month of games.

Football cafés are already preparing, buying more tables, chairs, and televisions to entice customers to come and watch. Even electronic stores are getting into the game, offering discounts of 30 to 50 per cent on TVs and lesser discounts on other items, as well as holding lucky draws with prizes including motor cars and holidays. The “World Cup Cyclone” is also sweeping through industries seemingly not related to football at all, like food and drinks, telecom and even banking.

Broadcasting rights per game, by tournament ($)

The one who would appear to benefit the most is not TV manufacturers and retailers or football cafés but the broadcaster that holds the rights. The World Cup 2002 was a boon for Vietnam Television (VTV), with each advertisement during the games, and especially the final, going for thousands of dollars a time. Businesses saw the benefit of approaching such a huge audience and willingly parted with the necessary cash to advertise. And this hold true in Vietnam of other football tournaments. During the 2011 European Champions League final, the advertisement for “Kangaroo - the leading water filter in Vietnam” was screened so often that people quickly tired of it, yet it nonetheless helped an unknown company reach a wide audience of potential new customers and strong sales have continued to this day.

Price for watching World Cup 2014 on TV ($)

Not all advertisements during football matches are successful, but most enterprises are keen to try their luck. Broadcasters know this well, but with the rights for the World Cup costing $10 million there’s also an element of risk involved.

Sky-high rights

In recent years the cost of securing football broadcasting rights in Vietnam has become more expensive every time a contract is signed. VTV parted with $450,000 for a season of the English Premier League (EPL) in the early 2000s, but when it came time to renegotiate the deal in 2004 the price had gone up to $600,000 a season. Then, in 2007, VTC (Vietnam Television Corporation) won the rights for the next three seasons, from 2007 to 2010, for approximately $4 million. The distribution of the rights was then taken over by another entity, MP & Silva, and now stand somewhere between $16 million and $19 million. With the contract for broadcasting in Vietnam set to expire, the rights for the next three seasons are expected to fetch $40 million a season.