The 2014 World Cup is one of the biggest international sports events of the year, rivaling the Winter Olympics in Sochi held in February. The World Cup is a celebration of football, a sport beloved by millions, if not billions of fans from all corners of the world.
Fans are embracing the World Cup, but FIFA and other tournament organizers are concerned about the costs spent preparing for the tournament. Many of the costs are tied up in stadium construction or investments in infrastructure. On the flip side, the work stimulates thousands of jobs for the national economy.
But do those costs pay off over the long term? For example, Brazil will host this summer’s World Cup, and economists predict Brazil will spend at least £8.6 billion ($14.5 billion), with some experts predicting the cost could even double that estimate.
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If the total cost is finalized at the minimum projection, the bill will still be astronomically above the tabs for previous World Cup tournaments. For example, South Africa spent approximately £2.6 billion ($4.5 billion) on the 2010 World Cup – only a fraction of the projected costs for Brazil.
What’s more concerning for the Brazilian economy is that history is not a comforting guide. According to International Business Times, South Africa made back only 11 percent on a £2.6 billion ($4.5 billion) investment to host the 2010 World Cup – falling far short of initial estimated profits.
The same post mentions Brazil’s plans to bring home approximately £6.5 billion ($11 billion) in revenue from the 2014 World Cup. Even if Brazil hits that goal, the revenue will still fall short of making back all the money invested into hosting the tournament.
The cost vs. benefit debate dates back to previous World Cups as well, with many experts questioning if hosting the World Cup is in a country’s best economic interests. As costs and expectations continue rising with each passing year, is the payoff to host the World Cup really worthwhile?