Were you one of the many Americans waiting with bated breath to hear the results of the U.S.’s bid to host the 2022 World Cup? Maybe you even lived in one of the host cities and were hoping that some of the predicted $5B in economic benefit to the U.S. might come to your local economy. Well, according to some economists, we’re all a little better off saving our money and just taking a trip to Qatar. Although, meteorologists might recommend against it.
American economist Dennis Coates, in an oft-cited paper, finds that the projected positive economic impacts predicted in bids to host the Cup rarely come to fruition. He cites analysis where the U.S.’s 1994 hosting role was supposed to result in $4B in positive impact but actually had a -$9B impact on the U.S. economy.
While the cost to build all the infrastructure and deal with security and other issues is clearly huge, it’s also obvious that, while it’s happening, the World Cup generates a pile of cash – ticket sales, hotel rooms, transportation, merchandise, advertising rights, and on. So, what gives?
Well, while Coates’ paper, “What Americans Need To Know about a US World Cup Bid,” reads like an expose of the Board of Directors leading the U.S.’s bid for 2018 and 2022, the fact appears to be that the “soccer industrial complex” is the big economic winners of hosting the cup (at least, according to Coastes). Whether it is FIFA or the local host committees or the national teams that are charging municipalities 6-figure sums for the “honor” of hosting a pre-Cup training camp, it is soccer-centric organizations – not the general population – that stand to have the most direct long-term economic benefit from the World Cup. Unfortunately, much of the economic benefit of the Cup never trickles down to any of the citizens that are impacted by the preparations for the event (or the people that have to deal with the so called “white elephants” of stadia that never get used when the event is over).
Brazilians are expected to keep protesting the World Cup during the tournament, saying that the public money spent on the event should of gone to public services. (Photo: @bentsai81 | Twitter)
Given this harsh reality, is it really all that surprising that Brazilian citizens have already taken to the streets to protest the excessive costs overruns that have come with Cup preparations and their negative impact on Brazil? Remember, these protests are in a soccer-crazed nation, with a previously highflying economy that also has an Olympics clipping the heels of the World Cup. Brazilians are facing two mega-events with questionable value and profit occurring two years apart from each other. While some protests have turned violent, Brazilian street artists have taken a more peaceful approach, with anti-World Cup murals like the ones shown below appearing throughout Sao Paulo and other host cities.
(Photo: @Thozi_Mng | Twitter)
It seems that, if anyone should “foot the bill” for hosting the Cup, it should be the soccer interests in the regions where the Cup is held and FIFA – not the local municipalities that appear to have very little to gain. For FIFA to take home at least $ $631M in profits from the 2007-2010 World Cup cycle while South Africa spent more than $3B seems out of whack. Yes, the Cup is a great way for a region to build its brand, but a well-executed event is as much a brand-builder for FIFA.
And, if you’re reaction to the Brazilian protests has been, “I can’t believe they are complaining about hosting the Cup,” it might be worth thinking again. Unlike the U.S. in 1994, Brazil certainly doesn’t need the help to make the beautiful game a central part of their culture. They do need help to build a thriving long-term economy and to help drive positive social change – and the promises of hosting the Cup (or the Olympics) in that regard have a tendency to ring hollow.
