Is the World Cup a good deal for cities?
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If your city is offered a chance to host a World Cup match, you can’t possibly say no, right? And yet, when you crunch the numbers, the economic picture doesn’t look so good. But should cities only be thinking of their bottom line when making these decisions? Or should they think more like the millions of fans trekking across the globe to splurge on a once-in-a-life experience?
What you need to know
International flags adorn an urban plaza in Toronto - Photo by Frank H
The World Cup’s underwhelming economic impact: An analysis published by the Parliamentary Budget Office of Canada finds that the costs of hosting the World Cup far exceeded the benefits — at least in a strictly economic sense. Credit card spending at bars and restaurants in Toronto, which hosted six matches, were only 3% higher than during the same period last year. Meanwhile, Toronto taxpayers paid about $380 million for the event. Former Toronto Mayor David Miller, for one, believes FIFA are “sharks” who pass on as much of the cost of the tournament to local governments but still reckons the matches are worth it for the excitement and kinship the event fosters.
Historically the World Cup was run by local organizing committees (tied to a national soccer federation) that were responsible for the costs but shared the revenue with the host cities. Now FIFA has centralized control of the event. Under the new model, the cities are bearing much of the cost but not getting a cut of the revenue.
The economic impact of professional sports in general and major sporting events in particular is a perennial debate in cities around the world. There is a broad academic consensus that subsidizing professional sports stadiums is bad economic policy but few city leaders can resist doing it anyway, especially when the beloved local team threatens to leave.
Major events like the World Cup and Olympics have also prompted fierce debate about economic tradeoffs. Even soccer-obsessed Brazil’s hosting of the 2014 World Cup faced internal backlash (and major protests) over the billions spent on stadiums, many of which did not enjoy particularly much use after the conclusion of the month-long event.
At the very least, cities should try to align major events with long-term goals. For instance, the 2028 Summer Olympic Games provide an excellent excuse for Los Angeles to quickly build transit infrastructure (28 by ‘28) that will benefit Angelenos for generations to come.
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