Sack Blatter, have a re-vote and bring the tournament back to Germany

It´s hard to believe that it’s four years since Paul, the Oracle Octopus, came to worldwide attention for his uncanny ability to predict the outcome of Germany’s games in the 2010 World Cup. His track record of backing the winner from his tank in Oberhausen had been identified as pretty good in the Euro 2008 championships, but he really cemented his reputation two years later on the world stage with seven correct predictions for all of Germany’s games.

He bravely (and correctly) predicted that Spain would beat Germany in the semi-finals, a forecast which led to death threats from irate German fans, who called for Paul to be turned into polpo alla gallega, or worse. Spain’s prime minister Jose Zapatero offered to send Paul official state protection, and even industry minister Miguel Sebastian made preliminary arrangements for Paul to be granted safe haven in Spain, in a sort of cephalopod witness protection programme.

Paul left us in 2010 for the great aquarium in the sky, but his legacy obviously lives on. We read in the German press that three German scientists – professors of sociology, of sport sociology and of empirical economic research – have been studying what most influences the outcomes of football games, with a view to predicting the outcome of the forthcoming World Cup. Their prognosis is being published as a special research topic by the prestigious German Institute for Economic Research (DIW) in Berlin.

Their thesis – not improbable, given what we know about the outcomes of Europe’s national football leagues – is that the team with the most expensive players generally wins. Currently, Spain’s players are collectively valued at about €650m, Germany’s €575m and Brazil’s at about €470m, with others bringing up the field.

Adding up the individual market values of any team’s players is not that difficult a task. In fact, compared to say, the real estate industry, the values of each component are highly transparent and globally mobile. The players are internationally tradeable, unlike fixed assets, and their productivity is instantly measurable.

The most valuable teams have a certain amount of bundled transfer value across the whole squad – the stratospheric monetary value of a Lionel Messi (€120m) or a Cristiano Ronaldo (€100m) can be lost in an instant if they tear a ligament or lose their goalscoring touch. What matters is the team’s collective value. To underline their point, the professors point out that of the 204 nations who tried to qualify for the 31 places in this year’s World Cup (the home team Brazil is exempt from qualifying), 30 of those places went to the teams with the highest valuation.

Barring bad luck then, or a homemade disaster, we should be looking at a Spain versus Germany final, say the esteemed academics. For the long-odds punters amongst us, the profs even have a theorem that suggests that Belgium is undervalued, and likely mispriced. There, that should serve to raise spirits over the next six weeks.

It has long been a secret contention of ours at REFIRE that Germany’s current run of good economic fortune really started to take off after the magnificent summer of 2006, when the last World Cup but one was held in Germany. Apart from the weather, for which Germany cannot claim responsibility - although it helped that the sun shone for four weeks without interruption – those who came to Germany for the duration or just nipped in and out for the games of their choice will bear witness that this was the greatest ever World Cup, in so many rewarding ways.

We met Australians and Paraguayans, whose teams had been bundled out in the early qualifying rounds but who couldn’t bear the prospect of returning home while the fun was so good. For hundreds of thousands of people, this was the first time they’d spent any real leisure time in Germany – a country so often associated in other people’s minds with work – and found the experience immensely pleasurable.

They discovered that young Germans were like them – humorous, educated, spoke good English, enjoyed having a good time, and treated their guests fairly, rather than gouging their visitors for “what the market would bear”. .Above all, it was the public-spiritedness of that summer in Germany that set the benchmark for all future large-scale sporting and cultural events, which will be hard to replicate anywhere else. Of course, geographic proximity played a role, with travel distances manageable and countless European neighbours able to make sequential visits for games or to share in the bounteous hospitality arranged by every large German city in their brilliantly-organised public viewing and welcoming facilities.

Who can ever forget the provisional stadium – free for 35,000 visitors every day, with beer and sausages – set up with full seating on both sides of the river Main in Frankfurt, and a giant double-sided viewing screen anchored out in the middle of the river? This kind of organisation, and similar facilities with a human touch all round the country, played a decisive role in shifting perceptions as to what Germany was all about. It was a watershed moment.

It might sound naïve, but the summer of 2006 showed up in stark relief so much of what is good about Germany – its splendid cities, its parks, its generous civic spaces, its old and well-preserved buildings along with imaginative modern architecture, its funkiness, its general liveability – this was Germany’s finest hour. The national team didn’t even make it to the final, but they played attractive football all the way. The football team, the country, and its people gained legions of new foreign fans.

It’s worth remembering that all of these factors also help to make Germany a diverse and attractive market for real estate investment, beyond the mere cold calculation of yield compression and liquidity ratios. It’s worth remembering that German property – whether commercial, retail, logistics or residential – has an inherent value because it can nearly always be used for something else, and there are creative and imaginative people who have the vision and the resources to make it happen. That’s what really makes a market valuable.

On the eve of this coming World Cup, then, the putrid stench of sleaze and corruption surrounding the Qatar 2022 fiasco simply drives home to us here at REFIRE the inestimable value of a mature democracy based around social capital and a responsible, fair-minded and yes, hard-working people in creating a sustainable real estate industry with enough genuine opportunities for many. Replace Sepp Blatter and his cronies, have a re-vote, and bring the tournament back to Germany. Now, let the games begin.