The World Cup is the biggest sport on the international calendar… even ahead of the Olympics.
More than five billion people are expected to watch the game in Qatar, with more than a million coming to watch the game.
From ticket sales and merchandise to corporate sponsorships, prize money and tourism, there’s a lot of money that comes around an event like this.
But, for the host country, is it enough money? The short answer is no.
Most of the countries that host the World Cup spend billions on preparations, infrastructure, hotels and so on. Most of them are usually not refundable, especially not in the case of hard currency.
The World Cup is definitely a money maker. TV rights for the 2018 World Cup in Russia were sold to international broadcasters for $4.6bn. But this is maintained by FIFA, the world governing body for football.
As with ticket sales, which has a company that supports 100 percent of FIFA. The commercial rights, which brought in more than $1bn in 2018, are also maintained by FIFA.
The organization provides all the money to run the tournament – it will pay Qatar in the region of $1.7bn, although this includes a $440m team prize.
But Qatar is understood to have spent more than $200bn on this World Cup and infrastructure around it – hotels and resorts, improving all its roads and building railways.
With more than a million foreign visitors expected during the month-long competition, the host country will see a surge in tourism, increasing sales for hoteliers, restaurants and the like. But such expansion requires additional energy to be built, which is often greater than the short-term costs.
And who benefits in the short term?
The World Economic Forum said: “Hotel prices go up during business hours, but workers’ wages don’t go up at the same rate, meaning that hoteliers’ incomes are higher than workers’ incomes.”
People who have money make money. People without it, don’t.
In addition, World Cup visitors buying goods, drinks or anything else from FIFA’s affiliated teams do not contribute to the host country’s taxes, as a significant tax deduction for FIFA and its sponsors is required within the World Cup’s business plan.
Germany received $272m in tax breaks in its bid to host the 2006 World Cup.
Non-World Cup tourists tend to stay away from the host country of the World Cup, wanting to avoid the crowds, traffic and high prices. For Qatar 2022, if you do not have a match ticket, you will not be able to enter the country from November 1 until the end of the World Cup.
In the short term, it does not make money to participate in the World Cup. But some things are bigger than money.
Hosting the World Cup is a project of soft power. It gives the world a window into the country, showing how new infrastructure makes it a great place to invest or do business.
And in the long run, the money spent on tourism, if managed well, helps the country’s economy to grow.
New roads and transport services will provide economic benefits for years after the final whistle at the World Cup.
The world’s biggest sporting events divide people and bring people together across borders – the 2018 Winter Olympics saw North and South Korea enter the arena under a common flag. These events also encourage children to exercise – which has economic benefits for countries receiving medical treatment.
For the host country, the World Cup is about pride and honor and publicity, more than making money.
Hosting the World Cup is a country that opens its arms and houses and says to the world: “Heyyou are welcome here.”