Which stocks to back during FIFA 2020 world cup in Qatar, no beer jokes here.

It's finally kick-off time! And controversy follows, as usual. No alcohol sales at the stadiums, very short notice, didn’t even hear the bell, no VAR decision, just red card.

Ok, The FIFA World Cup Qatar 2022™ will be played from 20 November to 18 December in Qatar. It will be the 22nd edition of the competition

For three years and 11 months, soccer fanatics have been waiting for the 2022 World Cup, however, what are companies CEOs thinking?

I read a headline that most adverts and sponsorship will be by Chinese companies. surely not. How about Heineken, oh oh, I’m sorry Qatar, most of the world football fanatics like a pint during a match.

So, are major corporations lining up to get a piece of the sporting frenzy as well, either as sponsors, through social media or via broadcasting rights?

Not too sure. Some of the Wests corporations have been wary of big sponsorship commitment.

The decision to award Qatar hosting rights for the 2022 World Cup has been marred by controversy, including allegations of corruption and human rights violations, since it was first announced 12 years ago.


CORRUPTION ALLEGATIONS

The organisers of the 2022 World Cup have strongly denied allegations from the U.S. Department of Justice that bribes were paid to secure votes when the hosting rights for the tournament were awarded 12 years ago.


WELFARE OF MIGRANT WORKERS

Qatar has faced intense criticism from human rights groups over its treatment of migrant workers, who with other foreigners comprise the bulk of the country's population.

A 48-page report by Amnesty, Reality Check 2021, said that practices such as withholding salaries and charging workers to change jobs were still rife, despite labour reforms in 2014.


LGBT+ AND WOMEN'S RIGHTS

Homosexuality is illegal in the conservative Muslim country, and some soccer players have raised concerns for fans travelling to the event, especially lesbian, gay, bisexual and transgender (LGBT) individuals and women, who rights groups say Qatari laws discriminate against.

But World Cup organisers have repeatedly said that everyone, no matter their sexual orientation or background, is welcome during the tournament.


CONTROLS ON ALCOHOL

The Qatar World Cup is the first to be held in a Muslim country with strict controls on alcohol, presenting challenges for the organisers of an event sponsored by a beer brand and often associated with beer-drinking fans. Yesterday’s announcement that alcohol will now not be allowed in the stadiums was defiantly a curve ball coming so close to the kick off. Maybe the sponsors saw this coming.

So with the back drop of these controversial issues, which companies will be splashed across our media?


Big corporate sponsors generally don't like controversy. When Tiger Woods, then the world's biggest sports star, was engulfed in a sex scandal in 2009, Gillette, Gatorade, AT&T, Tag Heuer and Accenture were among the brands who dropped the golfer.

The following year, Qatar was awarded the rights to one of the world's most lucrative sports sponsorship bonanzas: the FIFA World Cup.


No such thing as bad publicity.. or is there?

Since the 2018 World Cup in Russia, little has changed when it comes to official World Cup sponsors. From a combination of so-called FIFA Partners and specific FIFA World Cup Sponsors, the only one that was there in 2018 which will not be there this time is Gazprom, the Russian gas company which has been heavily sanctioned because of the war in Ukraine.

Alongside Adidas and Coca-Cola, Hyundai-Kia, Qatar Airways, Visa, the Wanda Group, Anheuser-Busch InBev, Hisense, McDonalds, Mengniu Dairy and Vivo are all still on board from the last edition.

Three additional official sponsors have even been added: Software company Globant, Indian education tech company Byju's and Crypto.com, continuing football's growing embrace of the cryptocurrency sector. Hahaha, good timing, not sure they will be there now.

Yet some sponsors who might otherwise have been there are gone. In 2014, when new allegations about the bidding process emerged, Fly Emirates, Coca-Cola, Sony, Adidas and Visa all released statements issuing concern about Qatar 2022.


"The negative tenor of the public debate around FIFA at the moment is neither good for football nor for FIFA and its partners," Adidas said at the time. Visa said: "Our expectation remains that all of our partners maintain strong ethical standards and operate with transparency."


Of those, Sony and Fly Emirates were the only ones to actually end their relationships with FIFA. Both opted not to renew commercial deals once they expired at the end of 2014.


Ten billion supporters watching.

For many of the sponsors, the sheer scale of exposure afforded by the FIFA World Cup is too great to turn down. FIFA President Gianni Infantino says he expects five billion people around the world to watch the tournament, exceeding the previous record of four billion who watched Russia 2018.


Which companies stocks may benefit ?

Here we have compiled a list of companies that are simple to acquire or trade on the stock market and likely to benefit and display exponential growth from the FIFA World Cup 2022.


Adidas Group (XETRA:ADS)

The Coca-Cola Company (NYSE:IKO)

McDonald’s Corporation (NYSE:MCD)

Marriott International Inc (NASDAQ:MAR)


ADIDAS GROUP XETRA:ADS (ADS)

ADS recently went its separate ways with Kanye West following some controversial comments from the celebrity. The pain of the split piled onto the inflationary and retail pressure the company is already under. Down over 60% from the end of 2021 highs, ADS has struggled to find a footing in this current downturn.

As yet unable to return to the pre-pandemic revenue highs, investors have grown impatient with the stock.

The recent action provides an opportunity for the investor willing to take a chance on a turnaround and the World Cup could just be that opportunity.

During 2018 the stock climbed over 10%, the surge of sales related to the world cup in 2018 more than doubling the quarterly revenue in which it occurred compared to the previous.

The benchmark German index, the DAX, fell 19% over the same calendar year, 2018, suggesting there was a material benefit from partnering with the World Cup above and beyond the market expectations.


THE COCA-COLA COMPANY (NYSE:KO)

KO is the largest non-alcoholic beverage company in the world. In a host country that largely disapproves of alcoholic beverages, KO will find a willing partner to stock and market its product lines at this World Cup.

With the games and many of the meal and entertainment venues around the country supplying only non-alcoholic beverages, KO will certainly benefit from the flood of visitors to Qatar.

This will only form a small percentage of the sales that KO hopes to make from this partnership. The World Cup audience is enormous, sparring with the Olympics for the title of most watched sporting event in history. The 2018 World Cup was watched by almost 3.6 billion. All expectations are that this figure in 2022 will be surpassed.

KO spends around $4bn US dollars per year on advertising, and another $400m US dollars has been set aside just for the World Cup advertising campaign.

In 2010, Coca-Cola saw a 5% uptick in sales from the event. This translates to a $550m boost in sales just from the World Cup. The intangibles of the presence have additional duration in the minds of the consumer and will provide additional returns.

After all, against an audience of 3.6bn or more, the advertising spends for the event of $400m equates to just 11 cents per potential customer.

KO is famously the darling of Warren Buffet’s Berkshire Hathaway, and the solid appreciation over time of this stock can be attributed to its savvy advertising partnerships, global reach, stable margins and dividend, currently yielding 3%.

As the audience for the World Cup continues to grow, KO will remain in the minds of the consumer as the premier non-alcoholic beverage company and provide a stable base for any investor’s portfolio.


MCDONALD’S CORPORATION (NYSE:MCD)

MCD is a company with stores and franchises in nearly every corner of the globe. With such an enormous platform for its products, the World Cup, with its more than 3.6 billion viewers, provides the perfect opportunity to keep its product fresh in the minds of its customers and burnish its reputation.

MCD is a long-time sponsor of the World Cup, though doesn’t ordinarily see direct sales increase from the partnership. The World Cup is more of a brand global outreach and is seen to be a cost-effective way to reach as many customers as possible.

The strategy is well proven – MCD beat comparable sales and profit estimates in its latest quarterly report. The stock bounced 3.5% on the news and is close to even on the year in a market that has shed approximately 20%.

With a solid dividend yield of 2.3% paired with top-line revenue growth of 20% for the calendar year 2021, MCD provides the dependable and consistent returns that KO does, year in and year out.

With several MCD locations in Qatar, foot traffic over the World Cup will provide a welcome boost to income for the local franchise holders, but it is the shareholders that will benefit most from the international messaging provided by the pairing with this global event.

MARRIOTT INTERNATIONAL INC (NASDAQ:MAR)

MAR, with its properties in Qatar including the five-star Ritz-Carlton, will be benefiting directly from the additional 1.2 million paying customers staying during the World Cup.

MAR is down a modest 5% year-to-date, having suffered at the hands of rising wages, restricted customer movements, and labour difficulties under COVID in recent times. However, it has beaten out its newest rival as the Airbnb share price has tumbled 32% this year.

The return to normalisation has solidified the business model in the eyes of business and leisure travel as a quality service with an easy-to-follow payment structure and no additional fees that might come with an Airbnb booking.

The convenience and pleasure of a MAR stay is a very durable service offering and one that the stock investors have recognised as well.

Revenue growth continues to impress and the trailing twelve-month (TTM) top line is narrowing in on those pre-pandemic figures, while the opportunity to clean house during the pandemic downswing has resulted in much improved margins from their properties.

The TTM gross margin is currently 21% compared to 15% pre-pandemic. So while TTM revenues are still 15% below 2019, the net income is currently higher by almost 40%.

MAR is certainly a stock that many wrote off as an antiquated and threatened business model under the stratospheric rise in Airbnb. Yet the operations continue to improve along with the customers and certainly a stock to consider worth your consideration.


How about the top betting sites? I haven't seen a poor bookie ever.

Are Paddy Power Plc, Betfair Group Ltd, Ladbrokes PLC & William Hill plc worth A Punt ?

FINAL THOUGHTS

If you fail with your betting or your fantasy football, why not take a punt in the markets, with a bit of analysis and foresight, you will probably do better.