The Strategist

In Russia, the French won more than the World Cup

12/18/2019 - 18:24

For some people in France, victory was achieved long before the finals. The French national soccer team returned victorious, and so did companies like Louis Vuitton, Metalu Plast or Freyssinet. With a record-high budget for the FIFA 2018 edition in Russia, numerous French companies acquired not only profitable contracts, but a level of publicity they had rarely achieved before. Be it in luxury goods or in infrastructure, many French companies seized the opportunity to showcase their know-how.

The most expensive world cup ever, despite economic turmoil
As often happens, the last World Cup was used as an economic opportunity to launch new developments in Russia, ranging from aerial infrastructures to train lines, and mega-hotels. An initial budget over 14 billion dollars was slated for the event and was quickly overshot so badly that estimates are still competing as to the total price tag. International reporter Henry Ridgwell writes : “The FIFA World Cup in Russia is the most expensive ever, with an official price tag of $15 billion. Close to $3 billion has been spent on 12 new or upgraded stadiums, and at least another $8 billion on infrastructure, including new roads, railroads and airports.” Unfortunately for the organizers, the 2014 Crimean crisis led to an economic downturn which led to a severe fall of the ruble, placing the financing plan under strain. In the end, a joint venture between the federal government, regional governments and private investors was called upon to finance the 2018 Russian World Cup. Naturally, every business in the world was eager to participate in the pharaonic project, namely for the opportunity to show their skills under such intense light, in addition to being naturally drawn to the jumbo budgets. Marketing reporter Michael Sheetz writes : “FIFA hauled in $4.8 billion in revenue from the 2014 World Cup, turning a $2.6 billion profit for the association. Broadcast revenue topped $2.43 billion, while sponsorships and ticket sales brought in $1.6 billion and $527 million, respectively. The 2018 World Cup is expected to rake in about $6 billion in revenue for FIFA, up 25 percent from 2014. With as many as 3.2 billion people expected to watch the tournament, broadcast revenue is expected to rise to $3 billion.
French engineering called upon
Although national preference was naturally a factor in the attribution of contracts (many contracts landed in Russia, as part of the overall FIFA agreement with Russia), the high standards which FIFA holds itself up to led the organizers to sometimes look abroad for the most relevant solutions, and France was ready for the challenge. French construction company Freyssinet was called upon for the roofing of the new stadiums, namely for the 45,000-seat stadium in Volgograd. The structure required the capacity to safely lift the 1600-ton steel structure, which was assembled on the ground, to the top of the building. French leader Metalu Plast was also selected for in-field installations and provided custom-built field shelters for 6 stadiums. In order to comply with FIFA standards, new shelters had to be designed with a very specific height (7 inches less than the original design), so as to ensure that no spectator loses a second of the show. International marketing manager Guillaume Deguerry says : “The spotlight that the World Cup has put on us has given us great international visibility. Our capacity for innovation, adaptability and the quality of our equipment have been made visible to everyone. As a result of this, we received many requests. For example, we delivered field benches for stadiums in Cameroon while the country was to receive the African Cup of Nations.” Finally, Schneider Electric was awarded the electrification contract to supply the new installations with power. Linking the new structures safely with the electrical grid was no easy task, and the firm was in charge of handing over full and operating control of the stadiums before the kick-off - which it did. Even though such contracts are highly profitable, the main benefit for firms like Schneider Electric is in terms of marketing: with virtually unlimited budgets, organizers systematically choose the best in every sector.
Luxury producers selected largely in France
The prestige which World Cups gained over the years have made the competition a large marketing target for many French companies specialized in the luxury sector. It was therefore no surprise that Louis Vuitton tried so hard (and managed) to obtain the contract to design and produce the golden trophy which would eventually be handed to its fellow countrymen. So as to reap maximum return on the project, Louis Vuitton launched an entire collection of by-products, based on the soccer theme, handcrafted with the same level of skill for which it is already famous. ForbesLife editor Michael Solomon writes : “Louis Vuitton—which has provided the trophy case since 2010—has created an officially licensed collection to celebrate the 2018 tournament. Made from the brand's signature Epi leather, the Keepall and Apollo bags (as well as smaller accessories) feature the hexagonal pattern of a soccer ball in three basic color combinations.” And the Paris-based luxury brand wasn’t the only one on the deal. Champagne producer Taittinger also negotiated exclusive rights as official champagne supplier for the event, in order to consolidate its leading position on its market. Labelsandlabeling information blog reported : “Following a long-term association with the global drinks brand, API Group was selected to create the perfect finish for Champagne Taittinger’s Brut Reserve NV. Capitalizing on Taittinger’s position as the official champagne for FIFA World Cup in Russia 2018, the packaging design featured a blue and silver cosmic theme to reflect the host country’s achievements in space.” Taittinger is bound with a long-term partnership with FIFA and has launched marketing since 2013 in that field.

2018 was clearly a sunny year for France, who had been yearning for a second world cup for 20 years. But somewhat further from the limelight, French firms were scoring equally well, with billions worth of contracts being assigned to them, and either maintaining them or hoisting them to the first tier in their respective markets. If the multi-million contracts were merely business as usual for large companies like Freyssinet, they were an opportunity for Metalu Plast to be recognized as an important player on the global market. Indeed, as Guillaume Deguerry of Metalu Plast himself testifies : " In our business, it is hard to do better than the Soccer World Cup!