5 Expensive World Cup Facts

Published in El Pais, 26 June 2018.

With the World Cup now underway in Russia all eyes are turned to the event. So far there has been surprises (Argentina and Germany to name a few) but many would agree the event has been entertaining. After years of preparation, Russia can finally breath easy and enjoy the fruits of their labour. With that in mind I decided to list a few interesting economic facts about what it takes to host such an event.

1. Cost of hosting the event seems to be increasing. The fact that hosting the World Cup is expensive should be a surprise to few, but it is still staggering to see how much it costs. Russia has spent roughly $14 billion dollars to host this year’s event with Brazil spending over $15 billion for the 2014 World Cup. This is substantially more than what South Africa paid ($4 billion) in 2010 and Germany ($6 billion) in 2006. The money is spent on things from housing, transportation and renovating/building stadiums. The increasing costs may result in more joint bids like the winning bid for 2026 that recently saw Mexico, Canada, and the United States become hosts for the event.

2. FIFA focuses on long term viability when setting up stadium parameters. When host countries plan on building or renovating stadiums for the event FIFA insists that the stadiums could be financially viable long after the event is over. This attempts to prevent a similar situation with the Olympics as facilities become abandoned almost as soon as the games are over. Football is the most popular sport in the world, so it is much easier to foresee future use of a stadium than a pool or speed skating facility that can host thousands of spectators. Countries also have the option of using as little as 8 stadiums for the event.

3. FIFA foots the bill for the event. All operating costs for the event are paid directly by FIFA. This amounts to roughly $2 billion dollars with roughly 25% being allocated for prize money. This is paid for by selling the tv rights to the event. All expenses indirectly related to the World Cup such as infrastructure are to be paid by the host city.

4. The selection process has been greatly altered starting from the 2026 bid. The cost of bidding for the past two world cup had some unexpected expenses as evident in the controversy surrounding the last two bids for 2018 and 2022 World Cup. English representatives claimed they were approached by members of the executive committee demanding bribes for their vote, starting a massive investigation with FIFA and triggering a new voting process which gives every nation a right to vote instead of just the few in the executive committee.

5. Financial benefit of hosting the World Cup is mixed. While organizers are quick to argue the cost is beneficial for the countries long term economy, the claim is often put in question. While the country receives a slight boost in the two years leading up to the event as well as the year of, many countries see a dip in growth in the two years after the event.