Is the World Cup bid a giant boondoggle?

Discussion in 'USA Men: News & Analysis' started by sidefootsitter, Sep 8, 2010.

  1. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    http://www.baltimoresun.com/news/opinion/oped/bs-ed-world-cup-bid-20100908,0,1411912.story

     
  2. YankatOxford

    YankatOxford Member

    Oct 15, 2007
  3. Sakatei

    Sakatei Member

    Jun 24, 2007
    There is a .pdf for the report if you search for the title. Maybe someone wants to wade through it. I am having link issues.
     
  4. SilentAssassin

    Apr 16, 2007
    St. Louis
    The report is based on studies of other sports mega events from the past, because the bid committee refused to release their economic impact study to the public. Based on independent studies of past sporting events like Super Bowls, World Cups, and Olympics, and educated guesses about what is in the economic impact study for the USA bid, it concludes that their estimate likely overstates the economic impact of a World Cup, although the impact would be less bad for a US bid than some past hosts and prospective future hosts because they don't need to build any new stadiums. It concludes that hosting a World Cup is a bad deal for taxpayers, because taxpayers foot much of the bill for hosting the event (e.g. sanitation, security), while USSF and FIFA reap most of the benefits.
     
  5. pdxsoccerfan

    pdxsoccerfan Member

    Aug 31, 2010
    Club:
    Portland Timbers
    I think the methodology they used to try and estimate the economic impact of the 1994 WC is highly suspect. Basically, they take the GDP from before the World Cup and after the World Cup and compare them to see if the economy grew at the rate that they expected. It turns out that the US GDP grew $9 billion less than expected in the time frame that they looked at. The problem is, the US GDP has random fluctuations that are greater than $9 billion all the time so it isn't a statistically significant difference.
     
  6. russ

    russ Member+

    Feb 26, 1999
    Canton,NY
    Club:
    Liverpool FC
    Nat'l Team:
    United States
    I know we hate the Fed and FIFA with the fire of a thousand burning suns,but who would we expect to reap the benefits of a World Cup?

    IF you're opposed to a US WC bid for any reason,you're in effect saying you don't want soccer to grow faster in this country.
     
  7. Magikfute

    Magikfute Member

    Mar 9, 2001
    Lancaster, PA
    Club:
    DC United
    Nat'l Team:
    United States
    Where did you see their methodology? I didn't see it in the article. If it's as you describe, it's asinine.
     
  8. FirstStar

    FirstStar Hustlin' for the USA

    Feb 1, 2005
    Time's Arrow
    Nat'l Team:
    United States
    It's pretty well established in current economic theory that all of the pure dollar impacts from sporting events and arena/stadium construction are significantly inflated. The argument that the World Cup makes any country money has been refuted over and over (the folks in Soccernomics do a good job laying this out while still being big fans of the game). Most of these studies focus on the fact that events like the World Cup (and building any new stadium with public funds) don't really generate much new revenue for the affected areas, they just result in a reallocation of leisure money that was most likely already going to be spent in that area.

    People do make money-- travel agencies do brisk business, hotels, restaurants and airlines see an uptick, "neighborhoods" derive benefit from that new stadium in the area. It's just that most of this money is being reallocated from other parts of the economy and isn't really newly created wealth (see above). It's pretty astounding even to note that the World Cup usually doesn't move the needle all that much on international travel to the host country! You must remember that most host countries are, already, popular international destinationns and the evidence indicates that the World Cup scares away almost as many travelers as it attracts. Thus, the USA can expect fewer Japanese tour groups (who will either decide it would be too expensive to visit during the World Cup or will get crowded out) to be offset by more S. American futbol fans.

    I will say that we shouldn't have to build a single new stadium and that's a major plus for us. Most of the thought put into these discussions centers around whether public funding for stadia pays off- and it really doesn't (because the public doesn't get any of the profits and, as noted above, people take money that would have been spent going to a local bar with friends to watch the game and use it instead to go to the new stadium to see it live).

    To me, it's not a question about the USA "making money" off this event and just more a question of whether we, as a collective, will derive enough personal satisfaction (economic utility) out of the event to justify spending the money. I will and am all for it.
     
  9. SilentAssassin

    Apr 16, 2007
    St. Louis
    He doesn't have any real methodology. He has a lit review that includes a study of the 1994 World Cup done by someone else, but as mentioned above the impact study for this bid was not released, so he didn't do a quantitative analysis.
     
  10. Mr Martin

    Mr Martin Member+

    Jun 12, 2002
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    This is fair and reasonable. I agree.
     
  11. divingheader

    divingheader Member

    Nov 10, 2001
    St John, NB, Canada
    Club:
    Newcastle United FC
    Nat'l Team:
    United States
    Good post.

    I think Soccernomics is a wonderful book. I would like to see it refuted by equally as qualified authors. Lies, damn lies, and statistics... different conclusions from the same data would be interesting.

    I am interested to see whether the thinking that leaning on the current infrastructure rather than embarking on big building programs makes a WC more profitable for the host country as a whole begins to make an impact on FIFA's thinking. Being able to demonstrate that the WC can be a money maker for the voters/taxpayers of the host country would be... valuable. As is being able to update the sporting and transportation infrastructure of an emerging nation like SA. Running up the debt of a first world nation which would need a lot of updated infrastructure would not be as... popular.
    More WC Finals for the USA and emerging nations, fewer for the traditional soccer powers. The world moves on in all things.

    I too am all for it. Won't be long now and we will know where we stand!
     
  12. clashcityrocker

    Mar 12, 1999
    In the shadow of RFK
    Club:
    San Jose Earthquakes
    One factor that is different for the US is that none of the stadiums (the largest expense, I would think) would be white elephants. Most, if not all, of the stadiums being used would be NFL stadia and have a primary tenant before and after the Cup, which makes the US more similar to Germany and England in terms of reuse of Cup infrastructure and less like Korea, France, and South Africa, which struggle to fill the new arenas that needed to be built.
     
  13. camasterton

    camasterton Member

    Jun 26, 2001
    North Carolina
  14. DaPrince84

    DaPrince84 Member+

    Aug 22, 2001
    MD
    Club:
    Arsenal FC
    Nat'l Team:
    --other--
  15. whitecloud

    whitecloud Member+

    Jan 25, 2009
    Gulf Shores, AL
    Club:
    Orlando City SC
    Nat'l Team:
    United States
    The stadiums are already built. Stadium authorities have an obligation to their taxpayers to fill them with events. If they don't have World Cup games they will be hosting concerts, monster truck rallies, X-games, etc. Their responsibility is to the taxpayers of the local municipality, not the tax payers of the entire nation.
     
  16. FirstStar

    FirstStar Hustlin' for the USA

    Feb 1, 2005
    Time's Arrow
    Nat'l Team:
    United States
    Eh, not really true. Stadium authorities are now mostly private companies affiliated with the dominate sports franchise that uses the stadium. For example, BoA Stadium here in Charlotte is run by an arm of the Carolina Panthers, even though public bonds were used (in part) to finance the stadium. FedEx Field (DC), is run by an arm of the Redskins. Some major stadia in the US (like the LA Colliseum) are public and match what you say, but most aren't anymore.

    Because these stadia are now run primarily to support one team and they are a part of that team's business model, they really aren't used for much else. Here in Charlotte, there's a bowl game and (I think) a handful of high school football games at BoA field and that's about it. No concerts. Mexico played Iceland here (thrilling 0-0 draw) last year. Not much else. That stadium is preserved to meet NFL standards and help the Panthers win-- everything else is secondary.
     
  17. Beau Dure

    Beau Dure Member+

    May 31, 2000
    Vienna, VA
    1974 Montreal Olympics?

    Nit-picking aside, how do you pin a nine-figure loss (in one city!) on the World Cup? What were the expenses that so far outweighed the hotel/restaurant revenue?
     
  18. Friedel'sAccent

    Friedel'sAccent Member+

    Jul 7, 2006
    Providence, RI
    Club:
    Reading FC
    Nat'l Team:
    United States
    Folks, I've binned the political discussion and the attendant insults. If you want to talk partisan politics, please move to the appropriate forum. Thanks.
     
  19. pdxsoccerfan

    pdxsoccerfan Member

    Aug 31, 2010
    Club:
    Portland Timbers
    It isn't in the article. A little while ago I ran across a different article that quoted the same results and gave some information about how the numbers were generated.
     
  20. QrysDonnell

    QrysDonnell Member

    Apr 2, 2006
    New York
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    In the Soccernomics book while they refute that hosting events makes countries money, they do point out that people do it becuase it makes them happy. Which is the real reason people host things like this. Economic studies are just a way to make it seem like it's a good idea so that all of the various business can feel good about throwing money away only to feel happy.

    Even unused or underutilized stadia probably still fill residents with pride while they gripe about them (a Montreal or Barcelona). Having a rotting old grand stadium is better than never having had anything.
     
  21. Potowmack

    Potowmack Member+

    Apr 2, 2010
    Washington, DC
    Club:
    DC United
    Nat'l Team:
    United States
    If FIFA wants to share in the profit upside of a WC, they also need to be exposed to the risk of losses. The tax payers of a WC host nation shouldn't be the only one risking a loss if a WC is not profitable.

    It's not a legit use of taxpayer money to sponsor the growth of any sport. If a team or sporting event can't figure out a way to be financially viable without taxpayer money propping it up, that's too bad for the sport but it isn't taxpayers' problem.

    If the WC isn't an economic plus for the US, we shouldn't host it.
     
  22. england66

    england66 Member+

    Jan 6, 2004
    dallas, texas
    Jack Warner.
     
  23. russ

    russ Member+

    Feb 26, 1999
    Canton,NY
    Club:
    Liverpool FC
    Nat'l Team:
    United States
    Why are economics the only consideration?

    Oh wait,they aren't.

    QrysDonnell explained the situation effectively enough,so I won't repeat it.
     
  24. Stan Collins

    Stan Collins Member+

    Feb 26, 1999
    Silver Spring, MD
    http://www.umbc.edu/economics/wpapers/wp_10_121.pdf

    Here is the report he's pushing, but you should be aware that it doesn't actually contain the survey. Coates is just quoting prior research (and at that, the main point he's highlighting was just a few lines of his original paper). From page 10:

    This traces back to his citation:
    That article doesn't seem to be available online without a subscription fee.

    Fwiw, the way it strikes me is that the idea you could come up with a regression analysis complicated enough to include all relevant factors except your experimental variable in order to isolate what the growth of personal income 'should have been' is more than a little preposterous. (Also, personal income feels like deliberately the wrong variable to choose.)
     
  25. Potowmack

    Potowmack Member+

    Apr 2, 2010
    Washington, DC
    Club:
    DC United
    Nat'l Team:
    United States
    I've read Soccernomics and I understsand the argument that big events make people happy. But feeling important and happy because we hosted a big event isn't a legitimate reason to spend tax money. Especially in a country like the US where a significant majority of the country is not a soccer fan.

    I personally don't expect taxpayers to subsidize my hobbies. If soccer and the WC isn't viable in the US based solely on private financing, we shouldn't pick the pockets of our fellow Americans to pay for our leisure pursuits.
     

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