July 11, 2010 in Business

World Cup causes net loss in productivity

Most- watched sporting event leads to major time drain in workplace
David Rising Associated Press
 
Associated Press photo

Brazilian soccer fans at the central market in Sao Paulo react during a World Cup quarterfinal soccer match between Brazil and Netherlands on July 2.
(Full-size photo)

BERLIN — Told they couldn’t watch the World Cup on the job, Italian auto workers went on strike — conveniently, a half hour before game time. German companies set up office viewing areas to keep employees from defecting on game days.

And Brazil? Brazil basically shut down when its team played, with businesses and schools closed and elective surgery put off so people could be in front of a TV.

The soccer tournament is the world’s most-watched sporting event, and the fact that it comes around only once every four years is probably fortunate for anyone trying to get some work done.

One study suggests the German economy, Europe’s largest, loses more than $8 billion in productivity, about 0.27 percent of gross domestic product, during the monthlong tournament. Surveys in Britain predict output losses there of $1.5 billion to $2.3 billion.

And that’s just two of the 214 countries and territories where the 2006 World Cup drew the cumulative viewership of 26 billion people. That’s a lot of eyes not on the job.

Some workplaces — particularly government ones — are strictly watching that employees aren’t rooting when they should be working. Italy’s Renato Brunetta, minister for public administration, even warned government workers ahead of the tournament: “Fun is one thing, work is another.”

Many other bosses seem only too happy to allow the World Cup into the workplace — perhaps because they share their subordinates’ football obsession. In the Netherlands, whose team knocked Brazil out in the quarterfinals, the entire country’s quitting time was unofficially moved forward to 1 p.m. on Friday so fans could watch the game.

Adam Gardner, a 31-year-old custodian at Britain’s Cambridge University, said his boss gave him permission to come in early and leave early to root for England — then headed out to watch the game himself.

“A lot of people did. The place was empty,” Gardner said.

German insurer Allianz SE set up viewing areas in its Munich offices for Germany’s match with Serbia and allowed all interested to watch it — as long as they punched out beforehand so they weren’t watching on company time. About 10 percent — 1,100 workers — took the company up on the offer.

“It is really motivating if employees are allowed to watch the World Cup during their work day at the company,” Allianz spokeswoman Vera Werner said. “Some of the managers also came along to watch the game and they saw it as a way to boost their co-workers’ team spirit.”

Researchers at Germany’s Hohenheim University estimate that the average German would devote 15 minutes of work time daily to the World Cup through the tournament. That included watching games, checking scores on the Internet and taking part in office betting pools.

The U.S. is not as swept by football fever as the rest of the world, but the time difference with South Africa means all matches are taking place during America’s normal work hours.

Nearly 15 million Americans tuned in to ABC for the team’s 2-1 loss to Ghana in extra time, with another 4.5 million watching on the Spanish-language Univision — making it the most-watched men’s World Cup game ever in the country.

The World Cup is the fourth-biggest “top productivity sapper” in the U.S., based on a nonscientific ranking of top sporting events carried out by Challenger, Gray & Christmas, a workplace consultancy based in Chicago. The NCAA men’s basketball tournament ranked No. 1 and was followed by NFL fantasy football pools and the Super Bowl.

The World Cup is not exclusively an economic drain. Economists say it boosts consumer spending for things like fan paraphernalia, party supplies and bigger-ticket items like wide-screen televisions.

Britain’s Centre for Economics and Business Research estimated that despite productivity losses, there would be a net $2.43 billion short-run boost to that country’s GDP in June and July thanks to increased consumer expenditure and business spending on advertising.

South Korean retailer Home Plus is reporting what may be the strangest economic benefit. It credits fans gathered at big outdoor World Cup rallies, unwilling to miss one minute of the action, for driving a 168 percent increase in sales of adult diapers last month.

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