Is the World Cup bid a giant boondoggle?

But that discussion is more or less moot to this article. The claim being made by Baade and Matheson that's being quoted by Coates is that somehow, completely independently of taxes, private citizens earned less money in 1994 because the World Cup was played in their town.

That's kind of a mind-boggling claim to me. First, I find it hard to fathom the mechanics of how that would happen, and second, I find it hard to fathom how you'd prove it with regression analysis if it did.

(Now, Coates spends time in the rest of his paper arguing that there are other taxpayer costs besides stadiums, but he's not arguing they add up to anywhere near $9 Billion.)

 

I don't understand the premise of the thread. The USA ( and other countries) are not bidding on this to make money.

 

There are individuals who will certainly make money off of this. If you own a football stadium that will end up hosting a bunch of games, the WC will be great for you.

But it seems like the costs of the WC aren't going to be incurred by the people making the money. FIFA and the stadium owners won't be paying for the required security, for example. And the money being spent on games and travel is likely money that would have been spent, anyway. It's just finding a different home. Rather than going to Florida for a week in July, 2012, a tourist might decide to go to see games in New York and Boston. And putting money in FIFA's pockets just pissed me off on principle.

But the US has the advantage of not having to build any stadiums. The NFL stadiums alone can handle the WC quite easily. Heck, the SEC, PAC-10 and the Big 10 have enough large stadiums for the WC.

 

I've always been under the impression that the stadiums owners did have to pay for things like extra security required for a world cup/nfl game/etc. I can see where the WC would not have a significant impact on the U.S. economy just because it's huge.

Most college stadiums wouldn't make the standards. Don't they have to be seats instead of bleachers?

 

I have to take issue with a couple of the assumptions in this thread. The first is that you cannot make money off of major sporting competitions. The city I live in, Indianapolis, which I believe is one of the 18 cities in the bid, has made quite a bit of money off of sporting events. The Indianapolis 500 was at one time ( and still may be) the largest single day sporting event in the world (if you count auto racing as a sporting event) with well over 300,000 in attendance every year. We also host the final four about once every four years, as well as the big ten basketball tournament. The city has used these sporting events, as well as the Colts (and their fantastic new stadium) to help re-create the entire downtown and become a convention destination. The thing Indianapolis realized long ago, and the reason we still try to get these events, and do what we can to keep the ones we have, is because it offers a chance to expose our city to many people who might never have taken notice. In a sense, it is a large marketing opportunity. The World cup bid could be a similar situation for the various host cities. It is a mistake to think that the only way to measure the economic impact is to look at the immediate effects.

 

Right. But they're not bidding on it to lose money either. The particular argument about losing money here doesn't sound very convincing. But if it were clear that hosting the World Cup would cost the US taxpayers more money than it would earn them, then I'd be opposed to hosting the World Cup. We've got enough debt.

 

I would be up in arms if a city I lived in were going to spend several hundred million dollars purely on a stadium for the World Cup. But, this isn't South Africa. Stadium building is mostly a local taxpayer activity in the U.S. Citizens in those municipalities either voted directly for a stadium or voted for officials who did. And those stadiums were built apart from any considerations for the World Cup and will have tenants both before and after the World Cup. The Los Angeles area is the most interesting situation because the World Cup could clearly have an impact on stadium issues there, but there are other parties pushing hard for a stadium there and the World Cup is merely an interested bystander.

 

And of course,the larger point being international soccer as a whole is a giant boondoggle in many ways.

There's a reason the best saying in football IMO is "club before country".

 

Totally correct. Except for a handful of clubs, most soccer teams around the world are basically run more like a museum (breaking even financially while providing a service to the local community) than a corporation (existing to make money for its owners).

I think this differing approach is a major reason why all 32 NFL teams are in the top 50 for sports team valuation in the world, while only a handful of soccer teams make the cut.

l'll be quite happy if the US gets the 2022 WC. But we can afford to put it on more easily than most countries, since we don't have to build any new stadiums. If our WC bid required spending taxpayer money to build stadiums, like what happened in South Africa, I'd be strongly opposed.

 

Baseball fan...

 

Read Soccernomics.

Large sporting events like the World Cup and the Olympics are almost certainly money losers. That doesn't mean bidding on them is a bad idea, especially in developed countries where people aren't exactly dying from a lack of clean drinking water and whatnot. It's worth it when you consider the added happiness in the home country, which even has a noticeable effect on things like reduced suicide rates.

 

I think the "happiness" argument is kind of a lame justification for hosting events like the WC. If your goal was to increase citizen happiness and lower suicide rates, you could probably use the tax money spent on a WC more directly and effectively on education, money for mental counseling etc. Sure, increased happiness may be a side effect of hosting a large event like the WC or Olympics, but the increase in happiness is not an efficient use of tax dollars.

Large events like the WC and Olympics are basically a way for politically-connected people in certain cities to leverage tax money for their own profit.

 

Holy booterism,Batman!And people think I'm cynical.

And of course I am,so I think that's true of any large works project.

The alternative of course, is handing everything over to Corporate America,which would be even stupider.

 

Agreed. If you want to increase long-term citizen happiness efficiently, spend the money on early childhood education or putting public parks in underserved areas or attracting grocery stories to poor neighborhoods. Or tax cuts.

If the World Cup costs a nation a substantial amount of money overall, the government shouldn't sponsor it. The World Cup is immensely profitable for FIFA and for particular local and transnational elites who have sweetheart deals with FIFA. Beyond that, I'm not sure that anybody knows whether it's a net positive or a net negative for the nations involved. If it turns out it's a money-loser, then smart governments will start refusing to host it. Unless a nation can break even financially when hosting the World Cup, there's no good reason to arrange to transfer billions of dollars from taxpayers to the offshore accounts of Sepp Blatter, Jack Warner, and the rest.

 

If the WC is indeed a profitable venture, then FIFA should have no problems figuring out how to fund the event privately. I don't see anything wrong with corporate sponsors runnig the thing. They'd certainly do a better job than FIFA and most soccer associations around the world.

That's the rub- WC boosters are constantly claiming that the competition is a money-maker, yet their business model doesn't work without government spending tax dollars to prop up the event. You don't need tax dollars if what you're proposing to do is profitable on its own.

Well, FIFA is telling the truth for once- the WC is a money-maker, for FIFA and its corrupt leadership. And for the remoras who are able to attach themselves to the WC public money gravy train.

 

Form Wikipedia"
"The 1994 World Cup in the United States was hosted in a number of different cities. In Los Angeles, site of the final, there was a total economic profit of 623 million dollars that went directly into the metropolitan economy.[citation needed] To help one better understand this figure, in comparison of that same year the Super Bowl only accounted for 182 million dollars (Nodell). These figures were calculated over just a one month period in which these games took place. Just in California, reports from the Pasadena Convention and Visitor’s Bureau conclude that 1,700 part time jobs became available during the preparation and duration of the event (Deady). New York, San Francisco, and Boston received combined revenue of one billion and forty-five million dollars.[2] The overall increase on hotels and food and beverages was ten and fifteen percent from the previous year.[3] This money spent on hotels and restaurants helps the entire U.S. economy in that many of these hotels and restaurants are chains and corporations. Hence, the money made is spread throughout the corporation and it was found to be used for the opening of new facilities and expansions of the corporation.
In addition to the direct impacts of the 1994 World Cup, there are many indirect impacts as well. In order to host the Cup the USA had to develop a national soccer league. This necessity quickly led to the formation of the MLS or Major League Soccer in 1996. This created an ongoing economic factor for the United States. This opened doors for new facilities to be built, sponsorship of new teams, and the revenue of the ticket sales. The indirect impacts didn’t stop there either; the newly introduced professional league in the US endgendered one of the fastest growing youth sports in the country. Youth soccer took off and the selling of apparel and gear for the sport was a target for private businesses to focus on selling.[4]..."

 

There are so many problems with this article as a source that it's hard to know where to start. Not a credible source.

EDIT: Even setting aside all the article's other flaws, one should note that the article's own final paragraph points out that the article's glowingly positive assessment of the economic impacts of the World Cup (which read like a FIFA promotional brochure for potential host cities) is, at best, far less certain than the article admits:

 

With Wikipedia, you follow the links to the sources. There's nothing wrong with using Wikipedia to get a general idea of where to go. In this case, unfortunately, the links are busted. So yes, it's not a great source.

I've sent a long e-mail to the author of the study cited in the last paragraph. There are a few things that don't seem to add up and a few things I don't understand. I'll share answers when they come.

 

Hope he responds. It would be interesting to see what he has to say.

 

that's not quite true though. governments constantly fund loss making enterprises in order to gain in other places. public transport is the obvious example. hardly anywhere in the world is public transport profitable on it's own, it's usually always subsidised by tax money, but it's very much a profitable investment because a good infrastructure attracts people and businesses, who in turn generate tax which makes more than up for the investment into public transport.

 

very American discussion going on here, and I don't mean that in anyway negative, just that it's very different. which is not surprising really given that the situation in the US is quite different. in a country where only the minority really cares about soccer, and the lift to the country would probably be minimal, one obviously has to think a bit harder whether tax money should be used. everywhere else in the world most people will simply say 'no matter the cost, just to have that thing in our country would be worth every penny'. that's something people will tell their grand children about.

in case you are wondering, I've had a look, and it seems Germany made a small profit on the 2006 world cup. much less than was predicted (as it always is), but still.

http://www.associatedcontent.com/article/46140/world_cup_2006_economics.html?cat=3

if I understand it correctly, they spent €4.6 billion and got €5 billion back. on top of that 25,000 new permanent jobs. not too bad.

of course, the only similarity with the US is that the infrastructure is pretty much in place. but to get the economic benefits you probably need a soccer mad country...

 

OK, I downloaded the article (my library has access). I can't post it but I'll provide a summary once I have time to read it.

 

Some scientists think that the reason that Denmark is the happiest country is that they're still in a good mood from Euros 1992: