Event Management, Vol. 22, pp.

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MEGA-SPORTS EVENTS AND STOCK MARKET RETURNS:

THE CASE OF THE 2022 WORLD CUP

MOHAMED ABDELAZIZ EISSA AND HISHAM AL REFAI

Finance and Economics Department, College of Business and Economics,

Qatar University, Doha, Qatar

This study examines the impact of the FIFA’s official announcements on Doha Stock Exchange
(DSE) of Qatar with respect to the 2022 World Cup. Using the abnormal unsystematic return method
of Savickas, our findings reveal that the relationship between this sports mega-event and the DSE
is significant, indicating that the market is very sensitive to FIFA’s announcements about the 2022
World Cup. The highly significant reactions of the DSE reveal investors’ positive (or negative) feel-
ings that the government and private expenditure on medium- and long-term projects undertaken
in anticipation of hosting the Cup will affect future trading volumes in DSE. Any future announce-
ments, good or bad, are likely to affect companies investing in these huge projects, impacting on
their share value and triggering portfolio reallocation by local and international investors, leading to
increased abnormal return.

Key words: 2022 World Cup; Doha Stock Exchange (DSE); FIFA official announcements;
Abnormal returns; Event study; GARCH model

Introduction a metro, a new port and airport in Doha, and suit-

Qatar, a state wealthy from its deposits of gas and
oil, has undertaken to stage the 2022 World Cup,
as announced by the Fédération Internationale de
Football Association (FIFA). It was the first Mid-
dle Eastern country to receive this privilege and in
response has announced ambitious plans for 2022,
to which the government and quasigovernmental
bodies will substantially contribute; for example,
air-conditioned stadiums, highways, railways and
able accommodation and cultural facilities are
envisaged (Fattah & Tuttle, 2014; also see Qatar’s
Supreme Committee for Delivery & Legacy https://
www.sc.qa/en).
In the past, such sporting events as the 2006
Asian Games, the 2011 AFC Asian Cup, and the
2015 World Men’s Handball Championship have
been based in Qatar, but none has given the state
and its capital such limelight as this (Becker, 2013;
Brannagan & Giulianotti, 2014; Foley, McGillivray,

Address correspondence to Mohamed Abdelaziz Eissa, Associate Professor of Finance, Finance and Economics Department,
College of Business and Economics, Qatar University, Doha, Qatar, 2713. Tel: +974 44035079; E-mail: m.eissa@qu.edu.qa

379
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 380 EISSA AND AL REFAI
& McPherson, 2012; Grichting, 2013; Scharfenort,
2012), Qatar’s ultimate ambition is to build up a rep­
utation as an important venue for events of all kinds,
whether sporting, business, cultural, or educational.
Enough stadiums, transport facilities, and tour-
ist attractions are already to be found in developed
countries, together with a history of managing large-
scale events profitably. When other countries try to
emulate them, they are belittled for seeking risks
needlessly (Ellen, 2011), even though they often
hold such meetings simply to earn the concomi-
tant profits (Kasimati, 2003; Li & Blake, 2009).
Qatar, though a developing country, is too rich to
fear such expenditure; it wants only to be famous
for its cultural contribution. In any case, Qatar’s
Vision (2030) had allocated $57 billion in the next
10 years to augmenting the country’s infrastructure,
apart from the demands made by the World Cup
(“Qatar Index Gains,” 2010). This is more than has
ever been spent on a nation’s building in so short
a time.
The extra amount needed for government spend-
ing on projects for this sporting occasion, accord-
ing to Deutsche Bank estimates, would add 23%
per year to capital expenditure from 2012 onwards,
increase private sector borrowing, and increase
the rate of population growth. The new infrastruc-
ture will affect the country far more than the other
countries where the contest has been scheduled
(Grichting, 2013). It is estimated to cost the equiv-
alent of 24% of Qatar’s GDP, substantially outdo-
ing South Africa, where 1% of GDP was spent on
the World Cup in 2010; Brazil, where 0.9% was
spent for it in 2014; or Russia, where it is envis-
aged that 3% of GDP will be invested for the 2018
tournament.
However, Qatar has not been accepted easily as
prospective host. A few weeks before FIFA’s deci-
sion, it declared that Qatar was a riskier country in
which to hold the contest, because it had so few
facilities; moreover, its hot, humid, and unhealthy
climate, its size, and its inexperience of the game
all militated against its being chosen (e.g., Becker,
2013; Brannagan & Giulianotti, 2014; Morris, 2012;
Scharfenort, 2012). Commentators suspected that
Qatar would be unable to meet the practical demands
in time, that its geographical position made it vul-
nerable, and that the human rights of the construc-
tion workers were jeopardized by cultural and
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language difficulties (Lepp & Gibson, 2011). Some
were apprehensive that the behavior of the football
fans would offend local sensibilities (Scharfenort,
2012).
Further checks to its aspirations were The Sunday
Times’ allegations that Mohamed Bin Hammam
had bribed some states to vote in Qatar’s favor;
the newspaper spoke of bank transfers, letters, and
emails, which suggested that FIFA representatives
had accepted millions of dollars for this purpose
from the president of the Asian Football Confed-
eration (AFC)1 (Becker, 2013; Dorsey, 2014). As
the allegations increased, the general public every-
where worried about FIFA members’ venality and
wanted the bidding for the 2022 World Cup to be
restarted, although this would have been unprece-
dented in the Association’s history (Dorsey, 2014).
Becker (2013) and Morris (2012) claimed that
Mohammad Bin Hammam’s contentious service
well ante-dated FIFA’s vote.2 The Sunday Times
endorsed the accusation that he had bribed dele-
gates to support Qatar as the venue.3 After an enquiry
into the behavior of some of its top officials,4 FIFA’s
ethics committee suspended Bin Hammam, who
later received a lifetime injunction to steer clear of
anything to do with football. Then FIFA officials
began to wonder aloud whether Qatar would forgo
its privilege of hosting the contest (Becker, 2013;
Morris, 2012. Moreover, the major European foot-
ball leagues, joined by US associations for football
and basketball, protested when FIFA changed the
timing of the tournament to winter,5 an action with-
out parallel (Knowlton, 2015).
Naturally, such actions and announcements affect
the stock market, as many empirical inquiries have
noted; news events always have implications for
stockholders’ sense of what is relatively secure and
what carries risk. This changes the portfolio value
of investments at home and abroad and thus leads
to their reallocation. Here we chart what differences
were made in the Doha Stock Exchange (DSE) by
the official offer to Qatar of the chance to stage the
World Cup in 2022. The models of Allen and Gale
(2000), Calvo and Mendoza (2000), Dungey and
Martin (2005), and King and Wadhwani (1990), for
example, were devised to test such differences.
This study, which is, as far as we know, the first
of its kind, contributes to the literature in several
respects by considering the reaction of the DSE
 MEGA-SPORTS EVENTS AND STOCK MARKET RETURNS 381

to certain announcements by FIFA, as well as its
decision on the World Cup venue. FIFA’s choice of
Qatar kept the public suspicious and critical lon-
ger than any of its previous actions. Moreover, the
abnormal unsystematic volatility of the market led
us to employ event-oriented method, which has
never to our knowledge been applied before in this
field—the publishing of decisions on major sport-
ing occasions and the stock market’s responses to
them. Third, for the sake of robustness, our study
separately assesses the impact of all the events on
all the firms comprised in the Dohar stock market’s
general price index, unlike previous studies that
have used general or sector indices (see the Meth-
odology section for further details). Finally, the
effect of major sporting occasions on stock markets
is generally traced on the event day alone, often
with insignificant results. We, in contrast, take a
period of 7 days before and after an event date to
assess the event’s impact. This is because anoma-
lous stock returns elsewhere appear on the event
day itself or the day before or after, but in our case
the announcements succeeded one another over
time. Table 1 shows the events we chose to focus
on: FIFA announced its choice of Qatar to hold
the contest in 2022; The Sunday Times alleged that
Qatar had used $5 million to bribe delegates; Bin
Hammam was suspended; FIFA exculpated Qatar
from the above charge; November–December was
scheduled for this particular World Cup.
The results of this study reveal that four out of
these five announcements provoked considerable
reaction to the announcements on the day they
were made, while the DSE reacted markedly to
them on subsequent working days.
Literature Review
The profitable results of holding world compe-
titions has persuaded increasing numbers of na-
tions to compete for this privilege (Becker, 2013;
Szymanski, 2011). Infrastructure development be-
comes not a burden but an investment, though there
is little consensus about its advantages (Andersson,
Armbrecht, & Lundberg, 2008; Manzenreiter,
2008). Thus, the chance to host such events may
rouse enthusiasm but is sometimes hard to ratio-
nalize in economic terms (Mitchell & Stewart,
2015). National pride in Russia and Brazil, for
example, will devote $18 billion and $13 billion,6
respectively, to constructing suitable infrastructure
for their World Cup commitments (Szymanski,
2011), although they will draw very little economic
benefit from doing so (Ellen, 2011).7
The direct and indirect economic and financial
consequences of such behavior is followed in sev-
eral articles. Kasimati and Dawson (2009) empiri-
cally revealed that the Greek economy benefited
from holding the 2004 Olympic Games, whereas
Ellen’s view (2011) was that the Greek economy
invested $12 billion in the Games, which has not
been recouped. Instead, Athens alone increased its
public deficit by 5% of the Greek GDP. Neverthe-
less, Barcelona’s staging of the Games brought

Table 1
FIFA’s Official Announcements
Event Event Date Event Description Event Window (Start–End)

1 December 2, 2010 FIFA appoints Qatar to host the 2022 World Cup October 28, 2009–January 9, 2011
2 May 25, 2011 Bin Hamman officially suspended following April 25, 2010–June 29, 2011
allegations of bribes, FIFA’s Ethics Committee
launched an investigation
3 June 1, 2014 The Sunday Times alleged of having documents April 23, 2013–July 6, 2014
of bribery. FIFA’s Ethics Committee launched an
investigation
4 November 13, 2014 FIFA’s final report clears Qatar of alleged bribery September 29, 2013–December 21, 2014
5 March 19, 2015 FIFA’s Executive Committee confirms November– February 9, 2014–April 4, 2015
December for the 2022 World Cup
Note. Description of the events selected for the test of abnormal volatility and abnormal returns. In each event, we use 300 daily
observations for each listed stock. Those 300 observations divided into two periods, the estimation period is 250 observations,
and the event period 50 observations. The event day is on the middle of the event period, the event window is 7 observations,
3 observations before and after the event day.

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 382 EISSA AND AL REFAI
over 20,000 into steady employment, while its con-
struction boom, which markedly improved Catalo-
nia’s infrastructure, lasted above 4 years. Around
Atlanta, as Mitchell and Stewart (2015) found, the
counties where Olympic events took place in 1996
showed greatly improved employment figures.
Consequently, stock markets in countries where
these events are held may be said to do well in
some ways. The positive reaction by these stock
markets occurs because the projects of all kinds
that are found necessary for the influx of visitors
attract high investment and thus stimulate the econ-
omy. However, the effect of the mere advertising of
events has not often been studied. The award of the
Olympic Games to Australia, according to Berman,
Brooks, and Davidson (2000), left no evidence in
2000 of influence on the Australian stock market,
only the parts of the market in New South Wales,
the location of the Games. Floros’ (2010) report of
the effect on the prices in the Athens stock exchange
related to Greece’s national and international spon-
sors found no evidence from the main index, but
a positive influence on one sponsor in particular,
the Hellenic Telecommunications Organisation. A
short-term positive impact on the hosts’ stock mar-
kets at the time of the announcement was found by
Cheng and Hai (2014), who educe evidence of it in
the case of 30 major international sporting events.
Similarly, the South African stock market was seen
to have reacted positively but not to a significant
degree when the choice of the country to host the
2010 World Cup was announced, yet a positive and
significant wealth effect was created later (Obi,
Surujlal, & Okubena, 2010). Abuzayed (2013),
for his part, considered the stock markets of the
Gulf Cooperation Council (GCC) countries and the
way in which they reacted to the news about the
2022 World Cup, concluding that the DOA index
reacted positively (volatility) and the services sec-
tor (abnormal returns). The markets in the other
GCC countries showed no spillover, but the Saudi
Arabian stock market showed some effects.
The way in which the stock market responds
to failed attempts to secure this privilege has also
been studied. Italy’s stock market did not react
as positively as Greece’s did to the news that the
latter was to hold the 2004 Olympics, according
to empirical evidence from Veraros, Kasimati, and
Dawson (2004), while positive differences between
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the returns of different countries in response to
winning and losing the chance to host Olympic
summer and winter games are found by Mirman
and Sharma (2010). Significant positive impact
on the stock returns of prospective host countries,
such as Athens and Seoul, has been established by
Nishio, Lim, and Downward (2009) for the sum-
mer Olympic Games, while they reported a signifi-
cant negative impact on losers (such as Athens with
regard to the 1996 Games) of announcements that
they have lost. Stock market reactions are shown to
be significant once the element of anticipation has
been controlled, in a study of the market reaction to
announcements about which country has been cho-
sen as the venue for sports events and other exhibi-
tions of special interest (Martins & Serra, 2011).
Dick and Wang (2008) analyzed the stock market
reactions when 15 summer and winter Games had
their hosts chosen; summer but not winter Games
revealed a significant and positive effect, while los-
ing an attempt to become host did not cause any
significant impact on stock market indices.
Clearly, then, conflicting results emerge from the
research at present. It came mostly from developed
economies that have the requisite amenities at the
time of bidding. For Qatar, which must spend so
much on infrastructure, the situation is different.
The market value of the DSE rose unprecedent-
edly high at the prospect of great numbers of mega-
projects, not least because the MSCI was expected
to promote Qatar’s status to that of an emerging
market (Merzaban, & El Madany, 2013). To mea-
sure the effect of major sporting events on abnormal
returns, we test the effect of announcing a single
sporting mega-event on abnormal return at the level
of individual firms, even though most studies have
adopted a general price index for this purpose.
Method
Data and Event Description
Because we were examining the impact of FIFA’s
official announcements on the DSE, taking into
account possible event-induced volatility, our anal-
ysis included all listed stocks. The market return
was calculated from the general price index, and
the log returns were calculated for all the time
series used. We considered 300 daily observations
 MEGA-SPORTS EVENTS AND STOCK MARKET RETURNS 383
for each listed stock, which were expected to yield
reliable parameter estimates (refer to Table 1 for
descriptions of the events). We considered in our
estimation a sufficient number of observations
before the event window, as well as the event days
themselves, and 25 observations after the event.
Test of Abnormal Returns
In order to assess whether the events had an
impact on stock returns (i.e., whether abnormal
returns occurred because of these events), we used
the approach suggested by Savickas (2003). This
is a very robust method, as it had to be in view of
the fact that Savickas addresses the conditional
heteroscedasticity behavior of volatility as well as
possible event-induced variance increases. Further-
more, it does not require the conditional volatility
to be the same for every firm analyzed. These are
very appealing features, making Savickas’ approach
superior to the well-established methods proposed
by Fama, Fisher, Jensen, and Roll (1969), reex-
amined by Brown and Warner (1980, 1985) and
Boehmer, Musumeci, and Poulsen. (1991). The
advantages of Savickas’ GARCH-based approach
is emphasized by the results obtained by Balaban
and Constantinou (2006).8 Savickas’ (2003) test is
based on:
rit = αi + βirmt + γiDt + εit (1)
hit = ai + bi hit−1 + cie it2−1 + di Dt (2)
where rit is the stock return for firm i in the period
t, and rmt is the return of the market portfolio. The
error term εit is assumed to be conditionally nor-
mally distributed with zero mean and variance hit.
α and β are the parameters of the mean equation;
a, b, and c are the parameters of the variance equa-
tion. Dt is a dummy variable that equals 1 for an
event day t, 0 otherwise. Besides the inclusion of
this dummy variable, we apply the quasi-maximum
likelihood function to estimate the parameters as
follows:
 2022 World Cup). The methodology of Savickas
T
e t2 
∑  t
1
L(Φ ) = − ln h 2
(Φ ) +  (3)
T t =1 ht2 
where T is the number of observations, Φ is the
vector of parameters to be estimated, and all other
variables are as previously defined. The BFGS
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optimization method is used to produce the maxi-
mum likelihood parameter estimates and their cor-
responding asymptotic standard errors.
θt is a refinement of the usual t-statistic, which
takes into account intertemporal firm-specific het-
eroscedasticity, and can be calculated according to:
N
∑
Sit
i=1 N
qt =  (4)
N  N
S jt 
∑ ∑
1
 S − 
N ( N − 1) i=1 
it
j =1 N 
�
yi
Sit = �  (5)
hit
Therefore, from equation (4) we can infer that θt
is the ratio of the abnormal returns cross-sectional
mean to its estimated standard deviation. The abnor-
mal return Sit is a standardized measure, given by
�
the ratio of the coefficient yi (capturing deviations
of return on a specific stock from the market return
in response to an event day) to the event-induced
volatility. Under the null hypothesis of no abnor-
mal returns, the test statistic θt follows the Student
t distribution with N − 1 degrees of freedom. This
approach allows the event-induced volatility effect
to be different across all stocks because di ≠ dj for i
≠ j. Furthermore, in our technique, which is unlike
other event study techniques, each stock’s vari-
ance is allowed to be stochastic outside the event
period.
Empirical Results
Before applying the event study technique pre-
sented in the Methodology section, we tested for
ARCH effects in our data set. In order to do this,
we employed the ARCH-LM test of Engle (1982).
The empirical findings suggest that volatility clus-
tering occurs in most of the return series analyzed
(the ARCH test results are available upon request).
Table 2 reports the results of abnormal returns
for the first event (FIFA appoints Qatar to host the
(2003) reveals highly significant abnormal returns
at a 1% level of significance on December 2, 2010.
Abuzayed (2013) found insignificant abnormal
returns using the General Price Index; the only
exception was at sector level, specifically for the
 384 EISSA AND AL REFAI

Table 2 the announcement day, unlike the work of previous

Abnormal Returns Event 1: FIFA Appoints Qatar studies on the General Price Index.
to Host the 2022 World Cup Table 3 reports the results of the second event
Event Window/Date Savickas (2003) θ on May 25, 2011 (Bin Hamman officially suspen­
ded following allegations of bribes). The FIFA’s
Preevent decision to suspend Bin Hammam over the alleged
November 29, 2010 6.900*
November 30, 2010 5.556* bribery shows that the early prospect of Qatar los-
December 1, 2010 0.454 ing the 2022 World Cup meant greater uncertainty
Event day about the long-term spending on infrastructure
December 2, 2010 7.009*
Postevent investments. The news on the suspension of Bin
December 5, 2010 0.491 Hammam had dampened the investors’ sentiments
December 6, 2010 1.267 and trimmed their appetite for assets (“Qatar
December 7, 2010 1.723***
Unlikely to Reap,” 2011). Following the suspen-
Note. Event date: December 2, 2010; window: October sion news, the DSE index fell by 0.20%, mostly for
28, 2009–January 9, 2011. The θ value was calculated
using equation 4. The abnormal returns appeared in the
construction firms and the banks financing them
pre- and postevent periods as well as the event day. (“Qatar Unlikely to Reap,” 2011). While the suspen-
*Significant at 1%; ***significant at 10%. sion of Bin Hamman put pressure on DSE index after
the event, the test of abnormal returns by Savickas
(2003) failed to pick up any significant abnor-
services sector. The significance of abnormal mal returns during the event period or the days
returns on the announcement day was due to the before the event. A more likely interpretation is
effect of anticipation by excited investors and trad- that investors in the DSE were not anticipating the
ers. The anticipation of Qatar’s potential selection suspension, because Bin Hammam denied all the
was significant enough to have boosted the DSE allegations and later put them down to a conspiracy
with 0.68% on the announcement day (Bennett & against his candidacy to become president of FIFA.
Weisenthal, 2015; Longman, 2010). The result here Table 4 reports the results on the third event (The
clearly shows the advantage of Savickas’s (2003) Sunday Times having documents allegedly endors-
methodology in capturing the abnormal returns for ing of the charge of bribery). Highly significant

Table 3 Table 4
Abnormal Returns Event 2: FIFA Launches an Abnormal Returns Event 3: The Sunday Times
Investigation for Allegations of Bribes Alleges That Qatar Paid $5 Million to Bribe
Voters
Event Window/Date Savickas (2003) θ
Event Window/Date Savickas (2003) θ
Preevent
May 22, 2011 2.316** Preevent
May 23, 2011 0.578 May 27, 2014 4.70*
May 24, 2011 0.321 May 28, 2014 1.20
Event day May 29, 2014 3.14*
May 25, 2011 0.119 Event day
Postevent June 1, 2014 5.83*
May 26, 2011 0.838 Postevent
May 29, 2011 0.498 June 2, 2014 0.88
May 30, 2011 0.244 June 3, 2014 7.04*
June 4, 2014 3.39*
Note. Event date: May 25, 2011; window: April
25, 2010–June 29, 2011. The θ value was cal- Note. Event date: June 1, 2014; window: April 23,
culated using equation 4. The abnormal returns 2013–July 6, 2014. The θ value was calculated
appear in the preevent period. However, on the using equation 4. The abnormal returns appeared
event day and in the postevent period, there were in all days within the event window except on
no abnormal returns. May 28, 2014 and June 2, 2014.
**Significant at 5%. *Significant at 1%.

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 MEGA-SPORTS EVENTS AND STOCK MARKET RETURNS 385
abnormal returns can be noted within the whole
window of the event. One plausible explanation for
the continuous abnormal return during the whole
window of the event is that The Sunday Times
leaked a series of reports on the allegation of brib-
ery 1 week before publishing it, which spilled over
to almost all the news networks, newspapers, and
social media sites around the world.
The negative news from The Sunday Times amid
speculation that Qatar would lose its chance to host
the 2022 World Cup clearly underscored investors’
nervousness at the prospect of construction firms,
banks, and many retail and services firms forgo-
ing many future long-term infrastructure invest-
ments. The panic caused the DSE index to tumble
by almost 2.20% on June 2 and 2.4% on June 3
(“Qatar Bourse Falls,” 2014). By June 5, the DSE
index lost almost 4.10% or $6 billion of market
capitalization in 3 days as investors sold off their
assets in fear that a second vote would risk Qatar’s
losing its privileged role in 2022. These results
indicate that the impact of the leaking of documents
by The Sunday Times and the anticipation of the
FIFA’s investigation on the fate of the 2022 World
Cup were also priced in the DSE market. In addi-
tion, when searching for financial news, we find that
the abnormal return over the window event period
might be also explained by the country’s decision
to raise ownership limit of some listed companies
to 49% on May 27. Ahead of the official upgrade of
Doha stock exchange from a frontier market status
to an emerging market by Morgan Stanley Capi-
tal International (MSCI) (Wright, 2014), combined
with The Sunday Times’ proof of bribery allegation
before publishing a series of reports every day since
June 1, which were picked up by various news net-
works, newspapers, and social media sites.
In Table 5, we report the results of the fourth
event on November 13, 2014 (FIFA’s final report
clears Qatar of alleged bribery). Savickas’ (2003)
test gives evidence of highly significant abnormal
return effects, at 1% and 5% respectively, on the
days of the event window. The only exception,
surprisingly, was the event day, due perhaps to the
fact that the announcement was made on Thursday
night when the DSE market had closed. FIFA’s
final reports would end the reopening of the bid-
ding process and confirm the integrity of Qatar’s
winning bid. After FIFA’s final report, Sepp Blatter,
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Table 5
Abnormal Returns Event 4: FIFA’s Report Clears
Qatar of Alleged Corruption
Event Window/Date Savickas (2003) θ
Preevent
November 10, 2014 30.218*
November 11, 2014 19.928*
November 12, 2014 3.167*
Event day
November 13, 2014 0.405
Postevent
November 16, 2014 2.512*
November 17, 2014 2.316*
November 18, 2014 22.519*
Note. Event date: November 13, 2014; window:
September 29, 2013–December 21, 2014. The θ
value was calculated using equation 4. The abnormal
returns appeared in pre- and postevent periods, and
there was no abnormal return in the event day.
*Significant at 1%.
the FIFA’s president, announced that Qatar’s right
to host the 2022 World Cup was irreversible (“Sepp
Blatter: Awarding 2022,” 2014). This clearly shows
that for Qatar the case would not require any more
scrutiny, although the world media criticized the
final report and repeatedly accused FIFA of not
doing enough to stamp out the corruption surround-
ing the 2022 World Cup. This sent a positive signal
to local and international investors that the infra-
structure projects were indeed to be implemented,
making investors more confident about their long-
term investments in DSE market. The anticipa-
tion factor is clearly evident from the significant
Savickas (2003) test statistics.
As regards the fifth event (FIFA’s Executive
Committee confirms November/December for the
2022 World Cup), the results in Table 6 show highly
significant abnormal returns on all the days of the
event period at a 1% level of significance. As noted
above, Qatar was awarded the 2022 World Cup on
the basis that it would take place in the summer.
The decision by the FIFA’s Executive Committee
ended a long debate on the timing of the tournament,
given that the summer heat would arouse concern
for the health of players and spectators alike, even
though stadiums and entertainment venues would
be equipped with technology for cooling them.
FIFA’s decision to avoid the searing summer heat
clearly impacted on the DSE. The postponement
 386 EISSA AND AL REFAI
Table 6
Abnormal Returns Event 5: FIFA Confirms
November–December for the 2022 World Cup
Event Window/Date Savickas (2003) θ
Preevent
March 16, 2015 3.53*
March 17, 2015 4.84*
March 18, 2015 16.44*
Event day
March 19, 2015 98.16*
Postevent
March 22, 2015 3.45*
March 23, 2015 21.42*
March 24, 2015 22.48*
Note. Event Date: March 19, 2015, Window:
February 9, 2014–April 4, 2015. The θ value was
calculated using equation 4. The abnormal returns
appeared in all days within the event window.
*Significant at 1%.
confirmed that FIFA supported Qatar as host to
the 2022 World Cup, so the market responded sen-
sitively to this message by showing an abnormal
return. The investors understood that this decision
would end the reopening of the bidding process
and endorse the integrity of Qatar’s winning bid.
Moreover, searching for financial news shows that
the abnormal return over the window might be
explained also by the regional Gulf markets indices
declined due to the decrease in oil prices (Bennett
& Weisenthal, 2015; McAuley, 2015; “MIDEAST
STOCKS,” 2015). Therefore, the abnormal return
in DSE in this period was caused in conjunction
with pessimistic investors concerned about the oil
price slumps (McAuley, 2015), and the announce-
ments of FIFA’s executive committee confirming
November–December for the 2022 World Cup.
Conclusion
Examining the impact of FIFA’s official announce­
ments on the DSE with respect to the former’s deci­
sion to allow Qatar to host the 2022 World Cup
using the abnormal unsystematic return method of
Savickas (2003) reveals that the relationship between
sports mega-events and the stock market is highly
significant. The DSE reacted significantly to FIFA’s
announcements about the 2022 World Cup. To four
out of the five announcements (FIFA appointed
Qatar as host of the 2022 Cup, The Sunday Times
alleges that Qatar paid $5 million to bribe voters,
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FIFA cleared Qatar of corruption, FIFA confirms
November–December for the 2022 World Cup),
there was significant reaction on the event day.
In addition, on the following working days, the
DSE reacted significantly to the announcements.
This indicates that the stock market of Qatar has
become very sensitive to announcements related
to the 2022 World Cup, most of all in the last 2
years when their right to host it was challenged.
The highly significant reactions of the DSE to these
announcements were due to investors’ positive and
negative assessments of the way in which expen-
diture on medium- and long-term public spending
would affect the future trading volumes in the stock
market. Any announcement relating to the 2022
World Cup would be likely to affect all companies
investing in the huge projects now under way in
the anticipation that Qatar will host the 2022 event.
These announcements will affect share value and
trigger portfolio reallocation, leading to increased
abnormal returns on the Doha Stock Exchange.
Notes
1
Mohamed Bin Hammam was a member of FIFA’s
executive committee from 1996 to 2011.
2
According to Morris (2012), The Sunday Times reported
that two FIFA executives, Reynald Termarli of Tahiti and
Amos Adamu of Nigeria, had offered to sell their votes, lead-
ing FIFA to bar them from the voting process. The Sunday
Times also produced evidence that Qatar had paid Issa Hayatou
of Cameroon and Jacques Anouma of the Ivory Coast.
3
The Sunday Times alleged that a whistle-blower who
worked with the Qatari bid team claimed to have information
about the alleged bribery.
4
In accordance with FIFA laws, 24 members of the
Executive Committee are required to select the host for the
World Cup. For 2018 and 2022, two members were banned
for alleged bribery (Morris, 2012). In May 2011, reports
surfaced that two other executive committee members were
paid $1.50 million to vote for Qatar (see Becker, 2013).
5
Sepp Blatter said on the Swiss TV station RTS that it was
a mistake to host the tournament in the Middle East (“Sepp
Blatter: Awarding 2022”, 2014).
6
The figures are rough estimates and subject to cuts by the
host governments.
7
Nooiji, Berg, and Koopmans (2011) argued that had the
Netherlands’ joint bid with Belgium for the 2018 World Cup
been successful, the operating profits would have been poor.
8
Savickas (2003) provides evidence of misspecification in
the traditional test (Brown–Warner) in the presence of event
induced volatility, whereas the GARCH-based test has no
such feature. Furthermore, the GARCH-based test seems to
be less misspecified than the standardized cross-sectional
test in the presence of event-induced volatility.
 MEGA-SPORTS EVENTS AND STOCK MARKET RETURNS 387
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