Millions of spectators worldwide nervously cram by their TVs. On the screen a superstar touches the ball forward as he dribbles down the sideline. Cutting in, he lobs a ball into space to the feet of a young talent, anxiously playing in his first game. A few moves at his feet, and suddenly all that lies between him and the goal is the keeper. He strikes the ball, it sails through the air, and lands in the back of the net with a satisfying swish. The crowd erupts, with different fans having their dreams fulfilled and crushed sitting side by side. On the field the young newcomer celebrates with the veteran superstar, celebrating his first goal with a childlike glee. At home children sit by the TV and watch the newcomer, little does he know he’s becoming their idol. This combination of passion, dreams, and fanaticism only happens once every four years at the FIFA World Cup. For years, children have grown up dreaming of representing their country in the World Cup, and for some it becomes reality. 

The first World Cup was hosted in 1930 in Uruguay. It came into existence because football was dropped from the 1932 Summer Olympics due to a lack of popularity, and thus the current governing body of football, FIFA (Fédération Internationale de Football Association), decided to host their own tournament in order to promote the sport. FIFA itself was founded in 1904 in Zürich with the purpose of overseeing international competition between major European footballing nations during that time. Today, FIFA is comprised of 211 nations, each competing for a chance at being one of the 32 nations to represent themselves at the World Cup. The tournament has happened every four years since 1930, with the exception of two times in the 1940s when the tournament was called off due to World War II. The most successful team is Brazil, with 5 titles, and the current champion is Germany, who won the tournament in 2014. The next tournament is planned for 2018 in Russia, and after that in Qatar in 2022. Each tournament brings a feeling of nationalism to the countries that participate in the competition. For countries where football is basically a religion, it provides an outlet for children to find role models and people to forget about their troubles for a few weeks. However, is the World Cup really as harmless as it seems? Or does this childlike glee found throughout the world hide a system far more convoluted and expensive than ever expected?

According to Yundong Liu in The People, Ideas, and Things Journal the 2010 World Cup in South Africa commanded a price tag of over $2.5 Billion (Liu). However, that cost is absolutely dwarfed by the total final cost of the 2014 FIFA World Cup in Brazil. Pat Garofalo reports in The U.S. News that the final estimate for the price of the World Cup in Brazil was over $11.5 Billion (Garofalo). These costs take into account everything from the infrastructure required to get people to and from the stadiums, to the construction of the stadiums themselves. These inordinately large amounts of money are what are required to meet the standards of FIFA, and host a “successful” tournament. However along with many experts, I asked the question of whether the World Cup was worth the costs required to host it. Through research from multimedia, news, and academic sources I came to the conclusion that the World Cup is not worth the money required to host it. Due to the massive amounts of infrastructure, and thus the large amounts of money required to construct it (mainly the stadiums), the tendency for a country to go over its initially planned budget, and the lack of any substantial support from the general public, I believe that the FIFA World Cup is a large financial liability that causes host countries to lose money both in the short and the long run. Furthermore, I believe that this money could and should be put towards bettering the lives of the host countries citizens, not the tourists that visit the country. 

As both the World Cup in 2010 and 2014 wrapped up, both South Africa and Brazil found that they were left to deal with the infrastructure and massive stadiums they had to construct, or what many call “White Elephants.” A “White Elephant” is defined as “a possession unwanted by the owner but difficult to dispose of” (Dictionary).  Take for example the situation in Manaus, Brazil during the preparation for the 2014 World Cup. Manaus is located in the middle of the Amazon rainforest, in order to reach the city by car from the rest of Brazil one must cross through Colombia, Peru, and Ecuador first. Instead, the major method of transportation to the city is through ports and airports. Within this city of 2 million, a massive stadium was constructed for the World Cup. In fact, Pat Garofalo reports that the stadium constructed in Manaus has a price tag of $300 million (Garofalo). In order for this 42,000-person stadium (with a bigger seating capacity than Fenway Park) to be constructed, according to John Oliver’s Last Week Tonight, all of the materials had to be shipped in from Portugal across the Atlantic, and brought up the Amazon river (LastWeekTonight 2:32-3:10). All this continually increased the price tag, reaching to the total mentioned above. However, this stadium isn’t even a major stadium in the World Cup, and will only be hosting four games total during the Cup. When the mayor of Manaus was asked in an interview by Bloomberg about what would be done with the stadium after the competition was over, he admitted to hoping to sell it to an entrepreneur to try to get some of the money back. He said he wanted to try to refurbish the existing stadium in Manaus, but was pressured into raising and spending the additional money to construct this new stadium (Bloomberg 1:45-2:15). In South Africa in the 2010 World Cup, a similar situation was encountered with its’ stadiums. In Polokwane, a city with a population of just over 500,000, a 40,000-person stadium was constructed for just around $2 million, with a projected $1 million in maintenance costs a year. According to Maura O’Connor on Public Radio International the city of Polokwane has no professional football team to fill the stadium, and local politicians find it unlikely that any visiting teams would bring enough fans to fill the stadium. In fact, in the 2009-2010 season of the South Africa Premier League, on the largest footballing stage in the country, “of the 212 football games played…only four drew more than 40,000 fans” (O’Connor). 

There are multiple narratives like these in every World Cup. Billions of dollars are spent on the construction of stadiums that aren’t needed by the population. This money could instead be spent by the government and reinvested into schools, hospitals, or neighborhoods for the people of the host country. The money invested in these things could take care of the welfare of those citizens who need it the most, instead of concerning itself with the tourism and travel associated with the World Cup. Furthermore, a significant chunk of money is used up in the production of large modern stadiums in places that cannot sustain them. Instead of investing these large chunks of money, local stadiums could be refurbished instead of ignored and used for the games that take place in the cities. Because these local stadiums are ignored, and host countries are forced to build these massive new stadiums, significant chunks of space are taken up that could be used to create the public facilities listed above. The culture of spending, along with pressures to create state of the art stadiums from FIFA and the first world country participants, make it impossible for many host countries to do anything productive with the money they produce in the short or long run. While some would say that this culture of spending encourages the governments of the host countries to improve on the existing infrastructure of the nation, resulting in an improvement in the quality of life of the citizens, I believe that regardless of the improvement seen after a World Cup, more money could be invested, and specialized to fit the needs of the locals, if money wasn’t put into the stadiums in the first place.  

While these stadiums carry massive costs after the tournament, the largest costs are normally found in the initial cost of building. In fact, a major issue that has been outlined in recent years is the prevalence of budget overruns during the construction of mega-events such as the World Cup. Martin Müller wrote a paper called The Mega-Event Syndrome in which he outlined several reoccurring issues mega-events such as the Pan-American games, the Summer and Winter Olympics, and the FIFA World Cups ran into. One that was touched on was the prevalence of these budget overruns. Within this paper he outlines six main reasons these overruns occur, and why the culture behind the World Cup and other mega-events caused them. However, for this paper I will only focus on three. 

According to Müller these reasons are: Fixed Deadlines, Profiteering, and Large Contingencies. Fixed deadlines cause the event to go over budget because the event cannot be put on pause to allow the construction to catch up, regardless of conditions it needs to be running on opening day no matter what. Because of this, the country will hire additional workers and firms, and add extra shifts in order to catch up. However, because they have to find firms that are willing to put in this extra work, firms have the freedom to charge whatever they want. This leads to the second reason, profiteering. Profiteering causes the event to go over budget because the fixed deadline allows firms to make as much money as they want. It opens the door for collusion within firms, and inefficient construction in order to garner more shifts and hired workers. This is especially prevalent in countries with weaker economic regulations like Brazil, and profiteering was rampant in preparation for the 2014 World Cup. Finally, many host countries feel pressured to build more infrastructure than is necessary for mega-events. These large contingencies lead to overruns because projects are continually made larger and larger as projections continue to grow in preparation for the Cup (Müller 9). 

These three major issues culminate into the budget overruns we see so commonly in mega-events. An example is the 2010 Commonwealth Games in India, which had an initial budget of $50 Million but ended with a final cost of $4 Billion. However, this is not an outlier. In fact, the average cost overrun of an Olympics, since 1960, is 179% (Müller 9). This leads to my conclusion that the massive budget overruns that are experienced in mega-events like the World Cup are not worth it, and once again the money that is used for these constructions could be used to benefit the citizens of the host country. Many of the economists and politicians who argue for the hosting of a World Cup argue that they do so because it is the only way to get public improvements put in place. In an interview conducted by Müller, Ken Livingstone, the former mayor of London, said: 

I didn’t bid for the Olympics because I wanted three weeks of sport. I bid for the Olympics because it’s the only way to get the billions of pounds out of the Government to develop the East End. (Müller 12)

It is argued that the large amounts of money thrown at these developments, that do often overrun their budget, have a positive externality that indirectly benefits their citizens. However, I once again argue that if the government cut out the middle man, the World Cup, they could benefit their citizens in a much more direct way. They could target their assistance, while also forming a budget that has much less fluctuation, and a much more flexible deadline. Though first, this requires the culture of the World Cup to change. The pressures on a country to focus entirely on what FIFA and the visiting nations want, by building entirely new infrastructure, stadiums, and transportation, lead to these budget overruns. If FIFA and other nations relaxed these pressures, the host country could focus on a World Cup scaled to what their country could sustain. By finding this middle ground the country could not only save money, but have more money available to invest back into its’ citizens. This would not only lead to a better quality of life, but also a happier populace. 

A happy populace is another thing the World Cup lacks in many places. Both nationally, and internationally, the world is seeing that very few people want to participate. In fact, according to Ian Mount of Fortune Magazine a survey conducted a few months prior to the 2014 World Cup found that public support of the tournament had fallen from 79% in 2008 to 48% (Mount). Around Brazil, widespread protests were held leading up to the tournament over the government’s spending. These protestors were angered by the large amounts spent on the tournament, when that money could have been spent on public housing or other welfare projects within the cities. These concerns seem to be a reoccurring theme, not only within the realm of this paper, but also within the realm of these protests, often seen leading up to and immediately after the tournament. Patrick Bond, when interviewed by Mount, stated a similar sentiment when he said “what was the land worth? What was the opportunity cost? Let’s say we spend the money on public housing instead. We would probably have many fewer riots” (Mount). The point he is making is that if the large sums of money were spent on humanitarian needs instead of the economic obligations of the tournament the population will be much happier in return. This happy populace, instead of the populace that clashed with police in Sao Paulo. You can see why, when according to Simon Kuper and Stefan Szymanski in Soccernomics, almost the entirety of the $3.5 billion price tag for the tournament was payed for by the Brazilian taxpayer (Kuper, Szymanski 285). Within the city, according to Thomas Barrabi of the International Business Times, the subway workers strike that was voted to continue indefinitely until the beginning of the cup has left over 20% of the city in a total gridlock (Barrabi). Without a happy populace, a tournament gets infinitely harder to host. The cost of security, workers to counteract those on strike, and any additional measures required add up to further inflate the cost of hosting the tournament. An unhappy populace doesn’t buy tickets, merchandise, or souvenirs. They don’t tell their friends to watch the big games, and when the time comes to trust the government again, the same government who spent billions on a project that doesn’t benefit those who need it, they often wont. 

A common counterargument is that hosting the World Cup provides a sense of nationalistic pride for the citizens, and in the long term creates a feel-good effect that makes the citizens of the country more likely to spend. Because of this, it has been shown that a citizen’s willingness to spend affects economic areas like the stock market (Liu). However, I argue that this only applies if the citizens of the country are willing to host in the first place. If a country has public housing, schools, and hospitals then maybe their citizens can embrace the Cup, and then maybe the long term economic effect will be positive. However, in recent years the trend (in South Africa and Brazil) has been to incur large economic losses while neglecting to take care of current issues. After the cup, those 51% of people who opposed the World Cup did not go away. I propose that it is unlikely that that 51% of people felt the feel-good effect that increases spending. In fact, I argue that instead those 51% probably did the opposite, and through their protests and discontent contributed less towards the economy. A World Cup can be run with a discontent populace, as evidenced by Brazil, however I believe for it to truly be beneficial in the long run it must have a happy citizenry supporting it. This has been shown in Germany, and other countries like Italy and France who were reportedly happier after the World Cup (Kuper, Szymanski 290). However, these are countries that are fairly first world, and are known for their extensive public works programs. Unlike Brazil, they cared about their citizens first. For a World Cup to truly be successful the culture around it must be changed to allow a country to first care about its’ citizens happiness before caring about the success of the cup. 

The culture of the World Cup has changed in the last few years and has become an event that is too costly to yield any economic gain. However, why does it matter to anyone besides the host country and those who live within? The World Cup represents a very real example of what can happen when a country puts the entertainment of foreigners over the welfare of its citizens. Through gross misuses of power, the country ignores its’ citizens need in favor of the demands of an outside body in order to attempt to improve its’ appearance. In its’ current state I believe that the World Cup is not worth hosting, the costs outweigh the benefits. However, I do not believe it is completely unsalvageable. I believe that the solution to this problem, that will meet in the middle is for the country to continue hosting the World Cup. However, instead of spending billions of dollars on the required infrastructure needed to host the cup, they instead refurbish and build upon preexisting stadiums. Furthermore, instead of completely listening to what FIFA’s demands are (I.E. Deadline, infrastructure, etc.) they should push back and bargain to create a culture that promotes healthy demand and accurate budgeting of resources. Finally, a country should focus on the needs of its’ citizens before focusing on hosting a mega-event like a World Cup. If a country can guarantee the happiness of its’ citizens, it can then focus on improving their happiness by hosting these events. If a country follows these three steps it can not only lower the costs of hosting, but it can also increase the benefits of said country.
