I know I promised that this site would be a world cup free zone. So I claim that this is a business story, not a sport story. Tom Coyner’s excellent Korean Economic Reader service sent me the following editorial from the Korea Herald a couple of days ago. As it was a sports story I almost deleted it, but then I saw the final paragraph.
We wonder which outcome will be more welcomed by the banks that sold products offering yields depending on the team’s performance. (my emphasis)
If anyone is reading this in Korea, perhaps you could let me know what financial products banks are offering — I guess a deposit account which pays an extra feel-good interest rate if the Red Devils get to the final or something like that.
Being slightly anal about such things, my concern is this: how does a bank hedge this risk? Where can a bank buy protection which will pay out in the event of a sporting success? The only answer I can think of is this: Down the bookies of course. I know bankers are often accused of being gamblers, but in this case the accusation sounds about right. The full editorial follows:
Bursting the World Cup bubble
Korea Herald Editorial
June 9, 2006
SEOUL: Soccer fever is heating up in Korea. The obsession with the World Cup, the high hopes being pinned on the Korean team’s potential to move through the tournament, and the extreme commercialization by businesses, is so overwhelming that an alliance of civic groups has launched an “anti-World Cup” campaign. The group, Culture Action, asserts that Korean society is too distracted by the excessive World Cup fervor and is thus overlooking important national issues. We do not agree with every point the group makes, but we need to ponder some of the concerns. Too many Koreans have excessively high expectations of their national team. It is quite natural for Koreans to hope that the 2006 squad will be as successful as the class of 2002. Excessive commercialization of the World Cup is to blame for inflating the expectation bubble..At the center of this lamentable situation are large businesses and broadcasting giants. In view of the public’s fascination with the national soccer team, it would be stupid if they do not try to take full advantage of the public relations, marketing and advertising bonanza the World Cup offers. But they are overly obsessed with hyping up the World Cup craze.
The Korean national team’s scoreless draw with Norway and a 3-1 defeat by Ghana in recent warm-up matches disappointed many in the country. The team’s lackluster performance, however, can become a blessing in disguise.
If head coach Dick Advocaat corrects problems exposed during the games and leads the team to the second round and beyond, it certainly will be the most desired blessing. If not, the recent poor showing will still have done the nation some good as it certainly helped lower the public expectations of the Korean squad, as shown in the latest polls. We wonder which outcome will be more welcomed by the banks that sold products offering yields depending on the team’s performance.