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 fans sitting side by side having their dreams crushed and fulfilled. 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. However, for others, like many living in the slums of Brazil, the failures of the government to care for its’ citizens make their future uncertain.

The first World Cup was hosted in 1930 in Uruguay because football was dropped from the 1932 Summer Olympics. The current governing body of football, FIFA (Fédération Internationale de Football Association), decided to host their own tournament in order to promote the sport. 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 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. For countries where football is a religion, it provides an outlet for 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 hide a system of overspending and excess behind a rose-tinted lense?

According to Yundong Liu’s The PIT Journal the 2010 World Cup in South Africa commanded a price tag of over $2.5 Billion (Liu). However, that cost is dwarfed by the total cost of the 2014 FIFA World Cup in Brazil. Pat Garofalo reports in The U.S. News that the final estimate for the cost of the tournament was over $11.5 Billion (Garofalo). These costs take into account the infrastructure required to get people to and from the stadiums, and the construction of the stadiums themselves. These large amounts of money are what are required to meet the standards of FIFA, and host a “successful” tournament. However, due to the massive amounts of infrastructure required, and the costs associated, the tendency for a country to go over its initially planned budget, and the lack of support from the public, I believe that the FIFA World Cup is a large financial liability that causes host countries to lose money in the short, and long, run. Furthermore, I believe that this money should be put towards bettering the lives of the host countries citizens, not the tourists that visit. 

As both the World Cup in 2010 and 2014 wrapped up, South Africa and Brazil found that they were left to deal with the infrastructure and stadiums they constructed, what many have come to call “White Elephants.” A “White Elephant” is defined as “a possession unwanted by the owner but difficult to dispose of” (Dictionary).  Take for example Manaus, Brazil during the preparation for the 2014 World Cup. Manaus is located in the middle of the Amazon rainforest. Within this city of 2 million, a massive stadium was constructed for the World Cup. In order for this 42,000-person stadium (a bigger seating capacity than Fenway Park) to be constructed, all of the materials had to be brought up the Amazon river (LastWeekTonight 2:32-3:10). All this continually increased the price tag. In fact, Pat Garofalo reports that the stadium constructed in Manaus had a final cost of $300 million (Garofalo). However, this stadium wasn’t a major stadium in the World Cup, and only hosted four games during the tournament. 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 get some of the money back. He said he wanted to try to refurbish the existing stadium in Manaus, but was pressured into spending the additional money to construct this stadium (Bloomberg 1:45-2:15). In South Africa in the 2010 World Cup, a similar situation was encountered with their 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 annual $1 million spent on maintenance. 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 doubt any visiting teams would bring enough fans to sell it out. In fact, in the 2009-2010 season of the South African Premier League, the largest footballing stage in the country, out “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. This money could be invested into schools, hospitals, or neighborhoods for the people of the country. The money invested could take care of the welfare of those citizens, instead of concerning itself with the tourists who visit. Instead of constructing entirely new stadiums, local stadiums could be refurbished instead of ignored8. Because they are ignored, and hosts are pressured, by FIFA, to create state of the art stadiums, it is often impossible for many host countries to do anything productive with the money they produce in the short or long run. While some believe that the money invested in the World Cup improves the quality of life of its’ citizens, I believe that the benefits would be more tangible, and more specialized, if the money was invested directly towards the citizens instead.

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 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 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. 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 paused to allow the construction to catch up. Instead, the country will hire additional workers and add extra shifts in order to meet their deadline. 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 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 required because once the event starts the country won’t be able to build more to accommodate larger than anticipated crowds. 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 that are common 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 the Olympics, since 1960, is 179% (Müller 9). If these costs are consistently so high, why do countries want to host these events? Many 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)

They argue that these large amounts of money 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. 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 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 would 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 was another thing that the recent hosts of the World Cup were lacking. Both nationally, and internationally, the world saw that very few people wanted 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 protests were held over the government’s spending. Protestors were angered by the large amounts of money spent on the tournament. They felt as if that money could have been spent on public housing and other welfare project. Patrick Bond, when interviewed by Mount, stated a similar sentiment by saying “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). He is arguing that if the country had spent the money on their citizens instead of on the tournament, the citizens would be far happier now. You can see why the citizens are unhappy, when according to Simon Kuper and Stefan Szymanski in Soccernomics, almost all of the $3.5 billion price tag for the tournament was payed for by the Brazilian taxpayer (Kuper, Szymanski 285). 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 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 creates a feeling of 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 their citizens can embrace the cup, and then 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 52% of people who opposed the World Cup did not go away. I propose that this 52% of people didn’t increase spending. Instead those 52% probably did the opposite, and through their protests and discontent actually took away from 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 first world countries, and are known for their extensive public works programs. Unlike Brazil, they invested in their citizens before investing in the tournament. For a World Cup to truly be successful the public must support it. This is not possible with a discontent population. 

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? 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 the needs of its’ citizens in favor of the demands of an outside body in an attempt to improve its’ international image. In its’ current state I believe that the World Cup is not worth hosting because the costs outweigh the benefits. However, I do not believe it is completely unsalvageable. I propose that countries continue hosting the World Cup, but 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 giving into FIFA’s demands (Deadline, infrastructure, etc.) they should push back and bargain. This bargaining will allow a country to negotiate requirements that are economically feasible for their budget. Finally, a country should focus on the needs of its’ citizens before focusing on hosting a mega-event like the 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 hosting a tournament. The FIFA World Cup is a great idea in theory. It provides an outlet for international exposure, while promoting competition and nationalism. With my proposed changes, the World Cup will become something that everyone can look forward to, citizens and tourists alike.  
