Is Hosting the World Cup Worth it?

By | April 18, 2016

Have you ever wondered why the bidding process for hosting the World Cup is so competitive and intense? FIFA has a pretty sophisticated process for compiling bids and ultimately deciding on a destination. The process begins with a simple request form that is sent out, and made available to every member association (MA). The MAs then submit bids which are evaluated by FIFA very closely based on a number of criteria. The organization then submits recommendations on behalf of select countries whose bids were most impressive and practical given the circumstances. Eventually, after extensive deliberation, FIFA arrives at its desired country. In some cases, as seen in the upcoming World Cup, FIFA also needs to reconsider its choice. Initially, FIFA chose Qatar to host the 2022 World Cup. However, FIFA is considering pivoting to a different country if Qatar fails to meet certain human rights regulations. The global community is watching Qatar, particularly how the country treats and looks after migrant workers. After some investigation, it was found that Qatar fell short of many basic human rights issues. Professor John Ruggie of Harvard University issued a report that read,

“Fifa should include human rights within its criteria for evaluating bids to host tournaments and should make them a substantive factor in host selection.”

This, combined with past controversy FIFA dealt with by not addressing human rights issues in previous hosting countries, led to a response from FIFA. Although FIFA cannot enforce human rights in countries around the world, they can facilitate the implementation through the offer of hosting. Regardless, you can see the extensive process of choosing the right host for the world cup, and what it entails exactly.

https://upload.wikimedia.org/wikipedia/commons/4/43/Maracana_Stadium_June_2013.jpg

However, the economic impact of the World Cup is questionable and uncertain in many cases. Given the considerable demand previously mentioned, this may come as a bit of a surprise. The reality is, is that hosting the tournament puts the hosting country on a global stage, attracting billions of individuals’ attentions. Brazil spent over $13 billion to finance the World Cup in 2014. Although there were large estimates for cash inflow to Brazil through tourism, and international investment, there are certain figures and metrics that suggest that the benefits simply do not outweigh the costs of hosting.

Tourism is a clear reason why a country should host the World Cup. The Brazilian Airline Association reported a decrease in air traffic of 11-15 percent between June 2014 (World Cup time) and June 2013 (regular time). This leads experts to question whether or not regular tourists were deterred due to inflow of irregular tourists, or if other factors played in. Additionally, economists estimated that many jobs would be added as a result of the economic stimulation. In June 2014, however, job creation fell to its SLOWEST pace since 1998 in Brazil. Not only this, the Brazilians had to face increases in prices in general because of the tournament. Inflation was souring, and overall efficiency was decreasing.

http://orig08.deviantart.net/9dcd/f/2014/110/b/b/brazil_2014_worldcup_football_by_openstocknetwork-d7f9e6d.jpg

At any rate, it’s important to consider the full cost-benefit analysis of hosting the event. We know a lot of time, energy and thought goes into the selection process, but do these countries really want to host…?

 

References: 

http://www.fifa.com/governance/competition-organisation/bidding-process.html

http://www.theguardian.com/football/2016/apr/14/fifa-qatar-world-cup-report-human-rights

http://www.economywatch.com/features/economic-impact-brazil-world-cup.16-06.html

Brazil and the World Cup’s economic impact – A look back

8 thoughts on “Is Hosting the World Cup Worth it?

  1. Mousa Alshanteer

    I admire FIFA’s reconsidering its decision to host the 2022 World Cup in Qatar, considering its treatment of migrant workers, among other issues. Robbie Rogers recently criticized the federation in a commentary published within USA Today, lamenting the fact that FIFA’s decision to host the 2018 World Cup in Russia and 2022 World Cup in Qatar make manifest its refusal to stand against anti-LGBT bigotry and discrimination. I also agree with Professor Ruggie’s assessment that the federation ought to include human rights as a criterion by which to evaluate bids by member associations to host international tournaments. The situation here very much reminds me of the National Basketball Association reconsidering its decision to host the 2016 All-Star Game in Charlotte after the North Carolina state legislature passed House Bill 2. The legislation prevents employees from filing lawsuits against their employers for workplace discrimination in state courts and prevents cities and counties from legally protecting transgender individuals who use public restrooms based upon their gender identity, among other provisions. “We’ve been, I think, crystal clear a change in the law is necessary for us to play in the kind of environment that we think is appropriate for a celebratory NBA event,” said Adam Silver, the commissioner of the league. Furthermore, in response to the passing of House Bill 2, the National Collegiate Athletic Association Board of Governors recently adopted an antidiscrimination requirement for sites that bid to host sporting events, calling into question whether the opening rounds of next year’s NCAA Division I men’s basketball tournament championship will remain in Greensboro. The National Football League, the National Hockey League and other professional sports organizations are currently assessing the situation, contemplating the implications of relocating their respective events in response to the passing of the controversial legislation. Hopefully, this will become more prominent of an occurrence across all sports. Sports hold an important place within the American conscience, culturally, financially, historically and socially. By taking stances against discrimination, perhaps such professional sports organizations as FIFA, the NBA, the NFL and the NHL, among others, may send a strong message to cities and states which sanction similarly discriminatory legislation.

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  2. Anne Straneva

    What I think is interested about the Olympics is the intangible sense of nationalism the games create. What is not accounted for by the hosting country’s economic metrics, is the rise in domestic sales for national and sport paraphernalia for the home nations. The games create an sense of global unity and friendship which can then be expressed in society, economics and politics. Given the rise of consumer culture in today’s global and interdependent environment, it is now possible for a world audience to experience and express feelings of nationalism triggered by the Games. I suggest that it is these nationalistic sentiments that serve as the foundation for the Olympic Games state investment, commercialization and popularity.

    The role of the media enables the populous to engage in nationalism, commercialism and consumerism no matter the world location. The commercialization of the Olympics through broadcasting, sponsorship and corporate financing is the underpinning of the monetary incentives behind the Games. Ironically, it is through the consumption of the event through media that allows for the rise of nationalism.

    A sense of belonging and identity through repudiation is inherent for human nature. By identity through repudiation I am referring to how one defines who someone is by articulating who one is not. In the context of the Olympic games, this would be different styles of play, athlete characteristics, team mantras, histories, uniforms, etc. In particular with the media, it is inherent that their are different national broadcasters and news reporters, as they can frame the experience through their appropriate biases. No one would like a commentator who is impartial going into a swimming race, they would want the complete backstory and cheers centered around one’s respective home country. It is in this way that the media is able to reaffirm the identity through repudiation and an “Us vs. The Wold” scenario. Unity against a common enemy is a crucible for nationalism.

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  3. Dominic Elzner

    In my opinion, it is not worth it one bit to host a World Cup. While I feel that it would boost the morale of the host nation, the monetary costs associated with it are just too much for it to be worth it. In your post, you said that Brazil spend $13 billion to acquire and finance the World Cup in 2014. I do not believe that they acquired nearly half the money that they spent in order to host the World Cup. I’m sure there was a ton of tourism to the games, but they built stadiums that are rarely used today. They are not going to make any money for it to be worth it economically. But are there other reasons that a World Cup could be worth it?

    I agree with Austin’s previous statement in his comment. He said, “The lack of correlation between long-term economic development and hosting large tournaments like the World Cup hints that the real reason behind trying to host these tournaments is based in the intangible.” Host countries want to feel good about themselves, and try to distract from all the bad that is going on, like corruption in Brazil, and failure to meet human rights regulations in Qatar. However, in my opinion, it is not worth 13 billion to cover up corruption. Maybe it was worth it to Brazil’s president, but she still was caught, and will still face the consequences. Overall, the World Cup is not worth it at all.

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  4. Chris Arora

    Part of the reason World Cup revenue projections fall short of their long-term marks is because the stadiums become vacant or relatively unused. Looking back at the 2008 Beijing Olympics or the 2010 World Cup in South Africa, several of the buildings and stadiums are dilapidated, destroyed, repurposed, or underutilized. Most of South Africa’s World Cup venues are rarely used, if ever, and the flagship venue, the Cape Town Stadium, is losing an estimated $6- $10 million annually. In Brazil, the second most expensive World Cup venue, the Estádio Nacional Mané Garrincha, along with the Arena Pantanal and Arena de Amazonia are without clubs from the top two divisions of Brazilian soccer and have seen little use. Several of the other World Cup venues routinely attract less than 15,000 people per match.

    One striking similarity between Brazil and South Africa is the lack of popularity of the domestic leagues. In 2012, the Premier Soccer League in South Africa attracted 4,000 people and Série A in Brazil attracted 16,000 people on average to stadiums with capacities of 50,000 plus. One can only imagine the same trends will extend to Qatar given the relative unpopularity of the Stars League.

    Source:
    http://www.si.com/planet-futbol/2015/02/02/world-cup-stadiums-brazil-south-africa-fifa-white-elephants#

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  5. Samantha Shapiro

    I definitely agree with Austin’s idea that hosting the World Cup in 2014 acted as somewhat of a distraction for Brazil. I would also argue that it acted as a band-aid. Hosting could quiet the skeptics for a short time as Rio essentially played “dress up” as a grand economy and tourism hub. In retrospect, many would argue that hosting the tournament did more bad than good for the city, considering the huge sums of money spent in preparation and the social inequalities and corruption that hosting just highlighted and exacerbated. As Nicholas explains in this post, it appears that the World Cup did not at all help tourism to Brazil; I recently read an article in which the author discussed tourism since 2014 and argued that while Brazil offers various attractions for visitors, people would simply rather go to a similar other location where they do not have to deal with the risk of disease and crime or face a crumbling economy. I’m really interested how the upcoming Olympics will affect Rio, considering few changes have been made to better the city since the World Cup. I foresee an interesting debate to come as to if tournaments like the World Cup and the Olympics should be held in developing countries. Some would argue that these countries should not host because doing so hurts them even more, while others assert that hosting such a wide-scale event will hopefully boost their global reputation and spur growth.

    In terms of FIFA’s decision about Qatar, I do hope that they stand firm on their commitment (no matter how forced it may be) to human rights. It does not really make sense to me that an organization as far-reaching as FIFA would associate itself with a host country that has such obvious and dire internal problems. However, I doubt that FIFA will actually end up moving the location of the tournament, simply because of how much planning goes into choosing a host city in the first place and preparing it for such an endeavor. Hopefully, the fact that FIFA is teetering even just a little about their decision will send some sort of message to the rest of the world that their actions and decisions are being watched very closely.

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  6. Austin Tran

    Brazil is an interesting example of a host country because they paraded the World Cup (and the Olympics) as a massive economic driver, so much so that the Minister of Sports claimed the tournament would pump tens of billions of dollars into the Brazilian economy over the next decade. Yes, the tournament would draw in a short term increase in tourism related revenue, but this injection of cash is not sufficient to cover the $11.3 billion spent on Cup-related infrastructure. In the long-term refurbished stadiums could help local teams draw larger crowds, but the benefit this has on the economy would be nowhere near the Sports Minister’s estimate based on past examples of host countries. The estimate for the 15-year economic impact of the 2006 World Cup, held in Germany, is under $5 billion and the actual revenues for the 2010 Cup in South Africa have been closer to $500 million than to the $900 million initially reported.

    The lack of correlation between long-term economic development and hosting large tournaments like the World Cup hints that the real reason behind trying to host these tournaments is based in the intangible. For one, tournament hosts can use their opportunity to gain prestige by demonstrating to the world that they are economic powerhouses and are developed and rich enough to afford these large costs. Another reason that has a more historical precedent is that hosting the World Cup can be a distraction away from the real problems at hand. Take Brazil for instance, the President is possibly up for impeachment and the corruption under her administration would have likely been discovered earlier if the nation was not focused on the tournament. This idea reflects some Marxist views on the sport and how it distracts away from real social issues and has been around for quite some time according to the Galeano book.

    Whatever the reason may be, countries who put their hat in the ring to host the World Cup definitely understand what they are signing up for and have always have their reasons, whether they be tangible or not.

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  7. Andrew Cho

    A few days ago Fox Sports commentator/former US team defender Alexi Lalas conducted the first English interview with the newly elected FIFA President Infantino (this happening in itself is highly interesting, especially so soon after the Panama Papers). In the interview, Infantino indicated that they are beginning the process to select the 2026 host, hoping to decide by 2020. So far, we know Mexico and Canada will be in the running bids. I suspect that at least in Canada, a well developed nation, basic human and worker rights will be protected. Perhaps Canada is looking to expand upon its place in North American tourism, or simply generate more interest in soccer in the country. The nation certainly has the resources to prepare as a host.

    On a different note, I thought this post was perfectly timed for another reason as Brazilian president Dilma Rousseff was recently voted in the lower house for impeachment. She accused of corruption, the shrinking Brazilian economy, and overall disillusionment from the public. It would be interesting to see if some of these public opinions came directly or indirectly from the events pertaining to the 2014 WC. Rousseff took office in January 2011.

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