Billions Championship: who will earn money at the World Cup
Today, on June 11, the XXIII FIFA World Cup will open at the Azteca Stadium in Mexico City. The largest sporting event of the fourth anniversary, along with the Summer Olympics, promises to be the most ambitious against the background of previous tournaments — 48 teams, 104 matches and three huge countries, among which is the largest economy in the world. In today's United States, where they love and know how to commercialize anything, politicians promise not only a spectacular holiday, but also huge profits. Historically, however, the cost of hosting the tournament has exceeded the revenue from it. Izvestia investigated whether the current World Cup would be an exception.
Loss history
Discussions about the profitability or unprofitability of the largest single-stage football tournaments (the World Cup or Europe, Copa America, and now the club World Cup) often confuse different indicators. FIFA, as a casino, always wins. The International Federation receives all its income from television broadcasts and sponsorship contracts, while spending very little. By the way, this is in many ways why the organization is so willing to expand the number of participants: there are no disadvantages for it, and profits grow with the number of teams and matches.
The income of the receiving party is quite another matter. They are much more difficult to measure: you need to estimate the costs of hosting the tournament (mainly capital, but operational costs must also be taken into account) and compare them with the effect that the World Cup had on GDP in the relevant time period. But again, such things should be compared head-on with caution, since some impacts, such as stadiums, hotels, airports, roads, etc., can have both positive and negative effects. Finally, there is the income of the local business itself, which is the most difficult to fully assess.
Every time a country applies to host a major sports tournament, the campaign is accompanied by extensive economic justification. Politicians promise job creation, an influx of foreign tourists, a boost for small businesses, and long-term GDP growth. The results, however, are not always that amazing.
For example, the 1990 World Cup in Italy was considered by many to be the first fully commercial one. The country, which was experiencing an economic boom at that time, had high hopes for the tournament, wanting to attract a huge number of tourists and upgrade its infrastructure. However, this was not to be. The primary budget was impressive at the time — $2 billion, three times more than in Mexico in 1986. As a result, it was covered by 80% — expenses amounted to $3.69 billion, the lion's share of which fell on the country's budget. At the same time, tourists turned out to be much less than expected, and the World Cup did not provide any additional economic growth. The state has added a significant amount to its public debt (for today's Italy, with its debt of 130% of GDP, it is more than a relevant topic). The most annoying thing is that the large-scale reconstruction of stadiums turned out to be useless in the long term, since in the 1990s the new "English" standard of compact, purely football stadiums with steep and high stands, roof and seats gained popularity. The renovated and newly built Italian arenas, which were quite satisfactory for 1990, looked archaic after 5-7 years.
An even more characteristic fiasco is the 2014 World Cup in Brazil. What could have gone wrong in a country where football is akin to a national religion? However, the huge investment did not pay off. Almost $20 billion was spent, with a direct effect on GDP of barely half that amount. Most of the stadiums built, especially in regions where there are no elite professional clubs, have become "white elephants". They had everything in order with modernity, but for the underdeveloped Brazilian entertainment industry, these masterpieces were superfluous. All this was read on the eve of the tournament, it is not surprising that Brazilians vehemently protested against hosting the World Cup. South Africa faced similar problems and even more so after the 2010 World Cup. The 2022 World Cup cost Qatar $200 billion (more than all previous championships combined), but obviously no one was going to count the money there from the very beginning.
Of course, there are exceptions: the 2006 World Cup in Germany was successful not only in terms of entertainment (a number of exciting matches and Zidane's legendary headbutt into the chest of the Materazzi will be remembered forever), but also financially. Germans spent about $5 billion in total, while retail sales in the country's stores alone increased by $3 billion. The construction of new comfortable stadiums has given a significant boost to Bundesliga attendance. There were practically no "White elephants".
Paper Eagles
In the case of 2026, we can be sure that FIFA is guaranteed to collect its jackpot. The combined bid by the United States, Canada and Mexico is projected to bring the organization a record $14 billion in revenue and about $11 billion in net profit, which will then be distributed among national associations.
For the three North American powers, everything turns out to be less straightforward. A year ago, FIFA President Gianni Infantino cheerfully reported to US President Donald Trump in the Oval Office that the economic impact of the tournament would exceed $40 billion in contribution to global GDP and create more than 200,000 new jobs in the United States alone. However, it should be understood that most of these positions are temporary vacancies in the service and security sector for the period of six weeks of the tournament. The projected GDP growth actually turns out to be the result of substitution: Americans will spend money on tickets and beer near stadiums instead of buying household appliances or going on a regular vacation inside the country. For the US economy of more than $27 trillion, this world Cup will remain a microscopic event at the level of statistical error.
However, the North American tournament has one important advantage over the Qatari or Brazilian experience. The United States has almost completely avoided capital expenditures on sports infrastructure. The matches will be held at ready-made, state-of-the-art stadiums (such as MetLife in New Jersey or AT&T Stadium in Texas), which host NFL games on a weekly basis. America did not have to build cities in the desert or cut down the forests of the Amazon for football arenas.
From this point of view, the 2026 World Cup is indeed the cheapest in terms of primary investments for the United States (and those that exist are carried out by almost 100% of the private sector). Washington's main expenses are related to security and logistics, which fits within the current budgets of megacities. However, for the consortium partners, Canada and Mexico, the financial burden turned out to be more significant. The modernization of stadiums in Toronto and the reconstruction of the legendary Aztec required significant investments from local budgets, which has already caused a wave of criticism from local communities. For example, in Mexico City, on the eve of the start of the tournament, teachers protested, demanding that public funds be used to raise salaries instead of subsidizing the football festival.
And all around — silence
The 2026 World Cup coincided with a series of global upheavals, which left its mark on the pre-tournament atmosphere. FIFA's unprecedented pricing policy has become a significant barrier for fans, which, in the spirit of the current US administration, has decided to arrange something like "maximum capitalism."
For the first time in history, the organizers have implemented a dynamic pricing model borrowed from airlines. According to the platform Ticketdata.com By the beginning of June, the average cost of an entrance ticket to the group stage matches was close to $600. FIFA rewritten the price tags upward as the available seats decreased. This caused a wave of outrage from fan communities around the world, who openly called the tournament an "outright robbery."
The high cost of tickets has been superimposed on the transport crisis. The war in the Middle East and the blockade of the Strait of Hormuz have driven up prices for aviation kerosene and motor fuel to multi-year highs. An intercontinental flight for fans from Europe, Asia or South America has become an unbearable luxury.
As a result, the expected hotel hype is not observed in the USA and Canada. Yes, in the key host cities, hotel rates have formally increased on paper by 300% compared to last year, but the real level of bookings is far from panic. For example, in New York, this figure for June is 2% less than the same period last year, when no major events took place in the city. International fans are refusing to travel en masse, preferring to watch matches on TV, and domestic demand is unable to compensate for this failure.
Macroeconomics knows the so-called "crowding out effect": ordinary tourists, fearing inflated prices and crowds of fans, simply avoid visiting the host country during the championship. As a result, the restaurant and hotel sector across the economy does not receive a net increase in revenue, but only redistributes it.
Within the United States itself, the attitude towards the tournament remains emphatically cool. A recent Bloomberg poll shows that for most Americans (especially for the baby boomer generation), this championship is not an important event. Soccer, despite a significant increase in popularity over the past 30 years, has failed to enter the core of U.S. sports culture, losing competition to the NFL and baseball, remaining a predominantly "women's" sport in the country. Lionel Messi's presence in the MLS locally fueled interest in football, but did not create a nationwide boom before the World Cup.
The 2026 World Cup will go down in history as a politicized, expensive and logistically difficult tournament. In a macroeconomic sense, it confirms the general trend of fragmentation of the global space. For FIFA, this tournament will remain a super-successful financial enterprise. It will be comfortable for the United States, as the use of ready-made infrastructure has minimized budget risks. However, for Canada and Mexico, as well as for hundreds of thousands of ordinary fans around the world, the 2026 World Cup will remain in memory as an example of exorbitantly high prices and draconian restrictions that push the sport itself into the background. The only hope left is that the teams will present the audience with a sufficient number of masterpiece matches that will make them forget about the circumstances, just as the magnificent World Cup in Spain in 1982 ousted the Falklands War from the fan's agenda.
Переведено сервисом «Яндекс Переводчик»
