When the first ball is kicked at Johannesburg’s Soccer City stadium this summer, history will be made. And so will billions of dollars. The first World Cup ever to be held on African soil will not only be a milestone in the sport, it will also be a massive windfall for the global football business.

For the sportswear industry, which has absorbed its fair share of recession-induced pain, the sight of 32 national teams battling it out for the FIFA World Cup Trophy could not be better timed. Nike, Adidas and Puma are all more positive about their prospects this year and have been busy developing new kits and equipment to coincide with the tournament. While Nike and Adidas will continue vie for the lion’s share of the business, for Puma the event has a special significance. Its track record in sponsoring top African sides stretches back more than a decade; four of the six African teams at the finals – Ivory Coast, Ghana, Cameroon and Algeria – will wear its shirts; and the German firm has even described the 2010 finals as Puma “playing at home”. It also sponsors the 2006 World Cup winners, Italy, a shrewd business move in 2004 by Puma’s Italophile CEO Jochen Zeitz, who knows the value of the tournament.

“It’s an amazing event because it gets the energy of the corporation and of the brand focused on one big thing, which we’ve been planning for since the last World Cup,” Zeitz told CNBC Business over a cappuccino at London’s Liberty store. “We announced that as of the 2006 World Cup in Germany we wanted to grow our soccer sales… and that’s what we’ve accomplished. This is now the pinnacle, the opportunity to keep up four, five years of successful growth in the soccer category. It’s the biggest sport in the world, and the biggest sport for us, and I consider this a positive motivator.”

Along with rousing Puma’s own troops, Zeitz believes the tournament will also excite customers. “It will have a positive impact, no question, on football sales,” says the 47-year-old German, who, at 30, became his country’s youngest CEO of a stock exchange listed firm when he started his current job. He expects the World Cup effect to deliver double-digit growth in Puma’s soccer category sales from June onwards, and drive single-digit growth for the company as a whole. Indeed, Puma recently reported that net income for the first quarter of 2010 increased to €83.1m from €5.6m a year earlier, although Zeitz remains wary of the World Cup euphoria in the business media: “Before a big event, there’s always more focus on our industry. People see this event as an opportunity to leave the recession behind. I’d say ‘there’s a recession; the World Cup’s not going to pull us out’. But if the overall environment is improving, then it’s great to have an event to kick-start something.”

Getting the ball rolling for Puma would mean having a successful tournament, which Zeitz defines as getting two of the seven teams it sponsors – the others being Switzerland and Uruguay – into the second round. For a man who owns a farm in Africa, and whose most enduring World Cup memory is of being a student in Florence when Italy won the 1982 tournament, the choice of which two is simple: “Italy and an African team,” he says decisively. With Italy fielding an ageing team and nearly five decades having passed since a country last retained the World Cup – when Brazil achieved the feat in 1962 – Zeitz has no illusions about the Azzurri’s chances of repeating their 2006 triumph: “It’s pretty unrealistic to believe that the same team will win the World Cup twice in a row. It’s a question of [brand] presence at the beginning but after the second round it’s going to be tough because the African teams have tough groups and the Italian team is not the youngest. The good news though is that Italy, like Germany, always pull themselves together in a big tournament.“

Indeed, the excitement and unpredictability of the World Cup is probably the only thing to remain constant down the decades of dodgy shorts and even dodgier haircuts. It is, after all, the quality which keeps the audience rooted to the spot and it is this that holds the key to the vast business opportunity. “Sport is an amazing vehicle to transmit a message,” says Zeitz. “And in today’s world that’s why things become a business – because they carry a message to a wide audience.”

Just how wide that audience has become and how large that commercial opportunity has grown is staggering. At a cumulative 26 billion viewers over the four weeks, according to sports information provider Sportcal, the World Cup audience will dwarf the planet’s population of just under seven billion. As a branding opportunity, it has no equal in sport, according to Jeff Slack, vice-president of global football at sports marketing group IMG, who is emphatic about the 2010 World Cup’s impact: “It is by far the biggest sports event in the world; I think it will surpass the Olympics in many ways. The latest recession has not really affected premium football rights and the World Cup is an example of that. People forget how quickly this has boomed. In 1998, in France, FIFA made about $200m in marketing and television. In South Africa it is going to make $3.5bn (€2.7bn). It is absolutely fundamental to the sports world. I think this World Cup, from a branding platform and from a business platform, will be by far the biggest sports event that’s ever happened.”

A key driver for this will be the sheer accessibility of the game, both physically and culturally. Once there was only television to carry the World Cup message, initially in slightly fuzzy black and white, currently in colour HD and soon to be 3D. But now there is also the internet – cascaded down onto laptops, notebooks and mobile phones, and dramatically expanding the number of potential service providers and consumers in the process. Hence the boom in rights prices. “The content becomes more and more valuable because people have more and more ways to consume it,” says Slack, who sees further traction for football in the future economic powerhouses of China and India. “Football’s generally accepted in these countries, which mean it’s a virtuous circle if you’re a major rights holder.”

He also believes that football will finally make headway in the US, a holy grail for the sport since the 1970s. To support that view, Slack points to the fact that US broadcaster ESPN embarked on its largest promotional campaign behind a single event in the company’s 30-year history when it trailed the network’s coverage of South Africa 2010. “They are completely convinced that football is going to grow in the US,” he says. “The English Premier League is telecast there and it goes within the existing media structure that gives people more access to this and they’re becoming fans.” It’s no coincidence either that the largest single country rights deal ever for the World Cup also involves US broadcasters, who have paid a whopping $425m (€330m) for 2010 and the 2014 tournament in Brazil.

What Slack describes as the “virtuous circle” – whereby sponsorship drives the game’s expansion, which then brings new audiences to rights holders – inevitably brings you back to the sportswear business. “For brands in the sports sector, the World Cup is everything,” says Slack. “Wars are going on between the three major sports apparel and shoe companies because football is where they’ve got to grow. Basketball was a mainstay for Nike, but it doesn’t have the global following that football does; the Brazilian national football team is now by far Nike’s most important global sports asset.”

Though the sportswear companies stand to reap considerable benefits, they will not be alone. Other major sponsors of the tournament outside the world of sport are also investing heavily. “People like VISA, Coca-Cola and Sony are spending millions of dollars, and spending years preparing for the World Cup as a global platform for their business,” says Slack. “They will also spend a huge amount of money measuring return.” Coca-Cola, which is known in the remotest corners of the globe, may not need the World Cup to spread brand awareness, but it still wouldn’t miss the chance of putting its logo in front of an audience of 26 billion.

Malcolm Pinkerton, a senior analyst with Datamonitor’s retail arm Verdict Research, places the drinks industry in the winning team off the pitch: “I think the big winners will be sports equipment and fashion, and also food and groceries. The losers will be the home-related ones who are already struggling as it is, so DIY and gardening will be affected.” He also doubts another boom for electricals. “At Euro 2008 and the 2006 World Cup, one of the big boosts came from people upgrading to flat screens or HD, but that won’t be as strong as in the past. There haven’t been major technical advances in televisions, most people already have a big screen and I think 3D is still a long way off.”

Clearly, the retail world in all its forms stands to benefit hugely from a successful World Cup. Though his company is among those poised to cash in, Zeitz would like the biggest winner to be from beyond the corporate world. “My biggest hope is that Africa will benefit the most: that there will be great games, a lot of excitement and hopefully an event so smooth that it will maybe bring the Olympics to Africa,” says the Puma chief, who hopes the finals can provide the same image uplift for South Africa as they did for his native Germany.

In fact, South Africa stands to benefit in many ways from a good tournament. Peter Mann, a founder of sports consultancy PMPGenesis, which is advising the Football Association on England’s bid to host the 2018 World Cup, sees the republic as riding a particularly big wave. “There are more major events now than at any time in our history, and there are more cities and countries bidding than at any time in our history,” he says. “South Africa sees the World Cup primarily as a way of demonstrating it has the ability to deliver a first-class event under its own auspices, without calling upon external consultants from overseas, and of also demonstrating what a wonderful country people are coming to now or in the future.”

The tournament will also provide a major boost to the national economy, estimated by Bank of America Merrill Lynch to be $1.1bn (€850m). For Mann, though, the direct World Cup business is only part of a bigger picture: “South Africa wants a share of that action. But they also have a longer-term plan. They see this as a stepping stone to other events. The Olympics have never been held in South America – they will now in 2016; the Olympics have never been to Africa and the logical place for them to go – whether it’s 2020 or 2024 – will be Africa. Events are a catalyst for change. Change is long-term. This World Cup is part of a sequence of a business momentum that is growing and will have a 20-plus-year life.”

Ultimately, a whole squad of companies and nation states stand to be winners before, during and after the final in Johannesburg on 11 July, provided the tournament goes well. Though ticketing, infrastructure, and security issues have all surfaced during the run-up to the event, there is also a feeling of optimism, partly because of the hard road which the host nation has travelled to get here in the first place. As Slack says: “For South Africa this is the event of a lifetime. You’ve got the legacy of apartheid, the legacy of Nelson Mandela and all those things. People in our world get very focused on whether the stadiums will be ready and the tickets sold. But I think there’s going to be such an amazing feeling about this... I think it’s going to come off very, very well.”

Jochen Zeitz, among many others, is hoping he’s right.

FIFAWorld Cup by numbers

Date: 11 June – 11 July 2010
Number of teams: 32
Number of venues: 10
Total prize pot: $420m
Winning prize: $30m
Defending champions: Italy
Most wins: Brazil (5)

Media

Host broadcaster: HBS
Host broadcasting budget: $160m
Total media rights revenue: $2.5bn
Biggest media rights contributor 2010: Europe – $1.3bn (51%)
Biggest deal in a single country in FIFA history: $425m – US combined deal for 2010 & 2014 World Cups. Consisting of Univisión, $325m (Spanish lang.) and ABC/ESPN, $100m (English)
Total expected cumulative TV audience: 26 billion

Marketing

Total marketing revenue: $900m
- Sponsorship – $690m (est.) (domestic sponsorship accounts for $70m)
- Hospitality– $110m
- Licensing – $80m (est)
- Accommodation & ticketing – $20m (est)

Economic Impact

Government spend to date: R17.4bn ( $ 2.3bn/€1.8bn) – infrastructure, stadia etc)
Economic impact: R55.7bn ($7.4bn/€5.8bn) – direct, indirect & induced spending (South African Tourism study)
Total estimated commercial revenue: $3.4bn

2006 v 2010

Media rights revenue: 2006 – $1.4bn 2010 – $2.5bn (78.6% increase)
Marketing revenue: 2006 – $860m 2010 – $900m (4.7% increase)
Total commercial revenue: 2006 – $2.26bn 2010 – $3.4bn   (50.4% increase)

Source: Sportcal Global Communications