Hosting the
Football World Cup: A financial own goal.
While the world is
getting ready for football biggest showcase, it's not always true
that the countries hosting the FIFA World Cup get the most bang for
their buck. With investment in the Brazilian World Cup being
speculated as being between 1.1 Billion USD and 11.1 Billion USD the
stakes are being raised in Brazil. With internal protests and
international concern for a World Cup that will start on time
increasing, is hosting sport's biggest spectacle even worth the
trouble?
According to
official financial reports released by FIFA on a yearly basis, the
past World Cups haven't always produced stellar financial returns for
their hosts. FIFA's pockets bulge after hosting football's biggest
showpiece, with football's governing body posting an average profit
of 700 million USD on the back of the the World Cup. Host nations are
quick to point out the long term monetary benefit of hosting the
World Cup, but this is often difficult to quantify and taxpayers
aren't all too enthusiastic to accept this long term focus.
The 2002 World Cup
in Asia didn't deliver the goods costing the host nations Korea and
Japan, a total of 10 billion USD and still failing to deliver a
profit . Admittedly the 2002 World Cup took place months after the
9/11 terrorism attacks and had to contend with a worldwide slump in
advertising, but it still failed to live up to FIFA's projections.
The 2006 World Cup in Germany turned a healthy 216 million USD
profit, but again FIFA was guaranteed a 30% cut of whatever was left
over. South Africa came off even worse with a paltry 10 million
dollar profit at the end of Africa's first World Cup. With FIFA
holding on firmly to broadcasting rights, the World Cup might not be
profitable for Brazil, but it will almost certainly be profitable for
FIFA.
What does this mean
for Brazil? The country has been saddled with astronomical debt from
day one and although the seven years they've had to prepare is the
most time any host nation has ever received, the official line from
FIFA is that “no country has ever been this far behind in their
preparation”. Coupled with rising political tension inside of
Brazil, the tendency for expensive football stadiums to become white
elephants once visitors leave; as well as the world's football public
anxiously breathing down its neck, the financial ends at least, might
not necessarily justify the means.
