The Business of Football: How the World Cup is Beneficial for the Host

This summer, football is going to be in the spotlight for at least a month: the world’s biggest football-related event, the FIFA World Cup is going to take place in Russia. The national teams of 32 nations will be doing their best to defeat their opponents in a variety of stadiums, all football fans in the world will be glued to their TV screens (with the luckiest having the chance to see many of the games live), football-themed products and services will show up everywhere from supermarkets and web shops to the best online real money gambling casino, and the sports channels – and not only them – will broadcast interminable discussions about how this team could’ve done better and that one could’ve done worse. And lots of commercials, too. This is something we could be calling the “World Cup effect” – a shift of attention from our everyday issues to the biggest ball game in the world.

But how about the effect of the World Cup on the economy? A worldwide event of such an amplitude must have an impact on the economy of the host. As the experience of years past shows, it does – and it is massive.

There is a reason why countries bid on the right to organize an edition of the FIFA World Cup: it comes with a lot of money. On one hand, there’s the money spent by governments on creating the facilities to host the matches themselves – new stadiums are usually built for the event or old ones are renovated completely, at costs that often reach tens of millions in dollars or even pounds. And the benefits are equally massive: in 1994, when the United States hosted the World Cup, $623 million reportedly went directly into the Los Angeles metropolitan area’s economy alone. And it was not the only city to host matches – but it did host the final.

The three World Cups before the one hosted by Brazil have generated an estimated total of more than $25 billion for their hosts ($9 billion for Japan and South Korea in 2002, $12 billion for Germany in 2006, and $5 billion for South Africa in 2010). The 2014 FIFA World Cup, hosted by Brazil, had an estimated economic benefit of up to $14 billion for the country, while also adding over 3.5 million jobs to the pool, and generating more than $8 billion in tax revenues over the four years preceding the event. And that’s something every country, even an economic powerhouse like Russia, would like to see pouring into its purse.

While hosting a World Cup certainly comes with intangible benefits like a boost of prestige and popularity, it also comes with a big pile of cash that makes it worth for the economy.

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