Hosting the World Cup draws massive exposure to a host country in terms of tourism, foreign trade, jobs and the potential for new development. But that can come at a huge cost. For the 2022 World Cup in Qatar, which runs from Nov. 20 to Dec. 18, the government is shelling out roughly $229 billion, making it the most expensive ever.
That total is almost five times the combined amount of $48.63 billion spent on the events that decide national soccer supremacy from 1990 to 2018. World Cups are played once every four years.
But there can be significant downsides for the host country. Overspending on infrastructure and stadiums has led to some hosts being in massive debt and left with constructions that serve little use after the FIFA World Cup comes to a close.
Landing the bid to host the World Cup can be a decadelong process. A country must submit a bid proposal that lists why it makes financial sense for the international soccer governing body, as well as how it will serve its goal of improving the sport’s global reach.
The organization scores proposals off two main categories: infrastructural and commercial. Nine criteria are weighed by varying levels of importance, with stadiums being considered the most important. Tax exemptions are another critical consideration as local governments turn stadiums and venues related to the World Cup into tax-free zones.
The three main moneymakers for FIFA come from broadcasting, ticket sales and marketing revenue, which all go to organization. It also allocates funding for the host countries to cover the tournament’s overall operations. For 2022, FIFA shelled out roughly $1.7 billion to Qatar, including the $440 million in total prize money for teams. The 2022 World Cup in Qatar is expected to bring in $4.7 billion in revenue.
Host countries rely on the economic impact derived from the tournament to generate revenue, and there are short-term and long-term economic impacts. A surge in tourism, hotel stays, job creation, and above-average spending at local restaurants and businesses are examples of short-term economic indicators.
But some host countries, which do not have the necessary infrastructure or stadiums to support the world’s largest soccer tournament, incur huge debt loads and are left with so-called “white elephant” structures after the tournament ends.
Consider Brazil: The cost of the 2014 World Cup there ballooned as the country needed to construct new roads, transit lines, stadiums and hotels. Estimates suggest that $11.6 billion was spent on that tournament.
But now, the Mane Garrincha Stadium in Brasilia, which cost almost $1 billion to build, is being used as a bus depot. Meanwhile, protesters criticized both FIFA and local government officials, saying that funding would be better spent on social services for people rather than on soccer stadiums.
Qatar, on the other hand, has spent well over a decade preparing for the 2022 tournament, with as much as $500 million spent per week to speed up production.
However, being on the world stage has also brought to light allegations of corruption, putting into question the FIFA selection process. In 2015, 41 FIFA officials were indicted on bribery, racketeering, wire fraud, and money-laundering corruption charges.
What’s more, in 2016, Amnesty International first reported numerous human rights violations stemming from the pressure the country was under to meet the 2022 deadline. Some 1.7 million migrant workers make up 90% of the total workforce in Qatar, and virtually all of them were underpaid and subjected to below-par living and working conditions.
Nevertheless, hosting the FIFA World Cup is viewed as an honor as soccer is the world’s most popular sport, with over 5 billion fans. That honor goes to the U.S., Canada and Mexico which combined will host the next World Cup in 2026. The United States, which hosted the 1994 World Cup, is viewed as the most successful of the tournaments, drawing over 3.5 million fans.
Admittedly, it can be a bad idea for some countries to host these games, and the negative FIFA headlines have soured some against the event. But history suggests that fans will continue to tune in with hopes and aspirations of their country winning the cherished World Cup.
Watch the video above to learn why hosting the FIFA World Cup can be a bad idea for some countries.
(With Inputs from cnbc)
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