The 2022 FIFA World Cup is finally here. This is no doubt a world cup of many firsts. For the first time ever it is being hosted in the Middle East, by Qatar. It is also the first ever world cup to have all the stadiums within an hour’s (or less) drive of each other. It is again the most expensive world cup ever, far eclipsing the previous ones. Russia hosted the previous FIFA World Cup in 2018 – they spent around US$14 billion. For Qatar to host the 2022 FIFA World Cup, they have spent over US$220 billion (staggering!). That figure is far more than the total costs incurred in hosting FIFA World Cups from 1990 to 2018. Considering these huge amounts, why, then, is hosting a FIFA World Cup a big deal?
Overview Of The Costs Of Hosting The Previous FIFA World Cups
The table below is to give you an idea of the costs of hosting a FIFA World Cup over the years.
|Italy 1990||400 million|
|USA 1994||500 million|
|France 1998||2.33 billion|
|Korea/Japan 2002||700 million|
|Germany 2006||4.6 billion|
|South Africa 2010||3.6 billion|
|Brazil 2014||11.6 billion|
|Russia 2018||14.2 billion|
|Qatar 2022||220 billion|
In Case You Did Not Know, It Is A Big Deal Hosting A World
First off, the high cost of hosting a FIFA World Cup is quite telling. You ask yourself, why, then, do nations scramble to host this event? Literally, countries bid to get a shot at hosting the FIFA World Cups. In fact, there are lots of controversies behind FIFA World Cup bids. Russia 2018 and Qatar 2022 have been some of the most topical ones to date. This is an interesting and multi-layered subject, but I will highlight a few things.
Look at Qatar, for instance. Qatar, size-wise is quite small; you can drive from top to bottom in just 2 hours. The region is also extremely hot. Qatar has not always had a notable soccer culture. These are some of the reasons why Qatar winning the 2022 FIFA World Cup bid came as a shock to many.
Behind their win is a string of numerous underhand dealings that many sources have reported. There were confirmed reports of millions of US dollars exchanging hands to influence the vote. This, again is to show you that hosting a FIFA World Cup is a big deal. Why all the trouble? Why do countries go above and beyond to win the bid to host a FIFA World Cup?
Hosting A FIFA World Cup – What Is The Catch?
The widely mentioned issue is that hosting the world cup boosts the economy of the hosting nation. To some degree, there are indications of how true that is. First off, there will be significant infrastructural development. The pursuit of hosting a world cup will stimulate infrastructural development that might have never happened otherwise. There is also an increase in employment creation. Consider how the local tourism of the host nations blows up before, during, and after the event. Consider the local businesses that will get a sharp increase in business activity. All these aspects substantially result in more disposable incomes.
However, there is an argument regarding tax breaks. There are many tax breaks during these world cups, so the host nation might not get much in terms of taxes. There are also indirect and difficult-to-measure benefits. For instance, there will be an influx of key social capital into the host nation. That can, in short to medium and long term, give birth to entities or initiatives beneficial to the economy.
Highly Debated Though
However, the point of saying hosting the FIFA World Cup brings about economic gains for the hosting nations is highly debated. I saw somewhere where hosting a world cup was likened to hosting an expensive party. The insinuation was that you do not expect to gain financially from such. In fact, some people insist that the hosting country can even be left in debt. Most economists say the premise for the argument that the economy gets boosted is inconclusive.
After all, roughly a month (the duration of the event) is not sufficient enough to translate into lasting economic benefits. Look at Qatar, for instance; it has taken them over 10 years to gear up for the 2022 FIFA World Cup. Can just one month offset all the costs and bring out economic profits? Some of what constitutes direct revenue are mostly enjoyed by FIFA, not the host country. For instance, ticket sales and screening rights are most beneficial to FIFA. What do you think; are there truly economic gains from hosting a world cup?
What Really Is The Catch Then? – Let Us Look At Some Actual Data
In 1994 the FIFA World Cup was hosted by the USA. The projected profit from hosting it was US$4 billion. It is reported that they made an almost US$10 billion loss. Yet, in subsequent years we still see nations bidding to host FIFA World Cups. It is reported that FIFA made an almost US$2 billion profit from the South Africa 2010 world cup. This was despite them giving South Africa US$480 million as assistance in hosting the world cup. What more when a better-endowed nation hosts? For Qatar 2022, FIFA gave US$1.7 billion to assist it in hosting the event. Clearly, they cannot contribute that much without a catch. These are examples of the many data pointers that show that nations are not really the winners in this mix. It seems the biggest winners are FIFA, the bidding committees and the power players of the host country.
Clearly, this discussion must have left you with much to ponder and discuss. The idea that has been sold is that the host nation’s economy gets a boost. Whilst there are some gains for sure, in the grand scheme of things, things are not really what they seem.