$229 billion.
That's roughly the cost of the 2022 FIFA World Cup
in Qatar, the most expensive World Cup ever.
That's more than four times the combined budget
of every World Cup since 1990.
The money goes to two things stadiums and
infrastructure for Qatar.
The country needed both, and it needed it fast.
Hosting the World Cup draws massive exposure to
the host country. There's tourism, foreign trade,
potential for new development and jobs.
And this World Cup is expected to be the most
watched ever. There's just one problem.
Some host countries don't have the necessary
infrastructure or stadiums to support the
world's largest soccer tournament and therefore
leave the country in massive debt and
constructions that serve little use after the fact.
In Brasilia, they decide to build the the opening
match stadium, which has to be 60,000 Stadium, by
the way, is supposed to cost $300 million.
It ended up costing $900 million plus.
The last time I looked, it was being used as a bus
or bus depot place to store busses overnight.
There are times where some of the stadiums were out
in areas that seem to be pretty isolated or in
areas where you could really see the vast
socioeconomic differences.
So does it pay to host the FIFA World Cup and is
risking the burden of debt worth the hopes for
economic gains?
Landing the bid to host the FIFA World Cup is a
decade long process.
A country has to submit a bid, listing the reasons
why it makes financial sense for FIFA and how it
may improve the sport's reach globally.
This is Jim Kirkos, CEO of the New Jersey
Meadowlands Regional Chamber of Commerce, and
he was part of the 1994 and 2026 World Cup bidding
process.
The bid process is very, very complicated and it's
very intricate. There's lots of parts to it.
FIFA has a bid spec booklet that every
competing location has to has to meet or attempt to
meet.
The organization scores proposals off two main
categories infrastructure and commercial.
Nine criteria are weighed by varying levels of
importance, with stadiums being the most important
requirements, such as number of stadiums,
capacity, hotels, government support and
transportation all play a vital role of who gets
picked to be a host.
Tax exemptions are another key consideration.
Local governments essentially turn stadiums
and venues relating to the World Cup into tax
free zones. That's so that FIFA and its sponsors
don't have to pay taxes on the revenue generated
during the tournament. So let's talk about where
that tax free money goes.
The three main moneymakers are
broadcasting ticketing and marketing revenue.
That all goes to the federation. FIFA pays for
prizes, ticketing and production.
The only money given out to host countries are
agreed funds to cover operations for 2022.
Fifa allocated $1.7 billion to Qatar, which
includes $440 million in total prize money for
teams. The revenue $4.7 billion total.
There's a net. There are $3 billion.
What happens with the net? Fifa takes about 10%
of that for its operations. They just keep
organization going and pay salaries and so on.
About 10% is kept and the rest is distributed to the
roughly 200 world soccer federations around the
world to help them develop their programs.
Host countries rely on the economic impact derived
from the tournament. There are short term and
long term, and it varies from country to country.
Countries better positioned to host are
typically the ones with short to do lists, meaning
there's already a network of infrastructure in place
that meets FIFA's strict requirements.
Just take the 94 and 98 World Cup in the US and
France, respectively since 1990.
They are the two countries that spent the
least to host on the tournament. Both countries
utilize preexisting stadiums and major cities
that had existing hotels and strong transportation
systems. A surge in tourism, hotel stays, job
creation, and above average spending at local
restaurants and businesses are all signs
of short term economic impact.
1994 had a great impact on me.
I was born in North Jersey to two Colombian
parents in Colombia.
They love their Football and their soccer.
At that time, I was a Colombia fan.
I had the Valderrama wig.
Carlos Valderrama is known for having this big
curly hair. So everybody had these wigs.
So I was rooting for Colombia.
This is Alejandro Bedoya, midfielder for the
Philadelphia Union and a member of the U.S.
national team during the 2014 World Cup in Brazil.
I just know how much I saw.
Even the local bakery bakeshop bakeries and
cafes and bars were not really bars.
I wasn't. I was only seven years old.
But the cafes, you know, we'd go to the local cafe
and get some food, the Colombian food, and you
would just see on the screen there or on the
radio just blasting the games.
And you just see how passionate the fans were.
And I do know that we've learned tremendous amounts
of things from doing events since 1994 about
what it takes to be a great host and what it
takes to get the most economic impact.
A lot of that just comes from being in a better
position to to market the region, let the world know
what's here and how they can participate with us
when they come here.
The short run spike in spending is caused by the
fanfare, excitement and the mass influx of fans
following their team from stadium to stadium.
The evidence there says sometimes there's a very
modest benefit.
Employment will increase in the hospitality sector
or the tourism sector of the economy.
Sometimes it doesn't happen.
It will vary from city to city.
Even with existing infrastructure, hosting
the cup does little in the long run.
The U.S. all positive gains in its GDP per
capita consumption and exports.
In 94, France witnessed its biggest gains in
imports and exports when a host of the tournament
in 1998. For countries who needed things like new
stadiums, improvements to their transportation
systems or infrastructure investments in the
billions of dollars are needed to sustain over a
million fans. Some have yet to pay off.
This is Mount Green Shea Stadium in Brasilia,
Brazil. It was one of many state of the art
stadiums built for the World Cup to hold over
60,000 plus fans.
I was able, fortunately enough, to play in the
2014 World Cup in Brazil and represent USA.
I mean, the atmosphere around the stadium is
amazing. And once you get in the stadiums, I mean,
you just see these state of the art infrastructure
that's been built and, you know, with all the
modern amenities and all the modern technology and
all that thing. So, you know, obviously some of
the stadiums and some of these countries, they are
just built from the ground up.
Brand new construction and the surrounding area
might not be the best in 2014.
The Brazilian government budgeted $300 million for
the stadium. It ended up costing nearly
$1,000,000,000. Now it's used as a bus depot.
This isn't unique to just Brazil.
Countries like South Africa, over half the
money spent on hosting it went directly to costs
associated with stadiums.
They had allocated $225 million for stadiums.
It ended up being $2 billion after hosting
South Africa had trouble finding tenants to take
over the stadiums.
They would cost millions of dollars in maintenance
and operations alone each year.
The South African government demolished two
stadiums to save money.
Only the US and France spent below $1 billion on
stadiums. Updating hotels and public transport can
cost countries billions too.
You end up building stadiums that are not
needed and you end up with white elephants.
So the money is not only involved with building
them and creating exit ramps and on ramps to the
highways or roads in order to get to them in
parking lots around them.
It's not only that, but once they're built, they
have to be maintained.
If they're not maintained, they go to
seed and they're tremendously wasteful.
And in the meantime, while they're going to
seed over a period of ten or 20 or 30 years, they're
occupying valuable, scarce urban real estate.
You can't have great economic development into
the future if you don't if you can't move people.
And so mobility is really a big part of that
infrastructure. Moving goods, moving people,
connect, ability, walkability, all those
things mean so much.
Brazil and Russia spent over $10 billion to host
using the mega-event as justification for
investing in this future for Russia.
Its investment would reportedly bring in $31
billion over ten years, though economists are wary
that that figure will ever come to fruition.
For Brazil, the exuberant spending to host back to
back mega events, the World Cup and Summer
Olympics in 2014 and 2016 was an effort to showcase
Brazil's transition to a now modernized economy on
the world stage.
The government expected to spend a forecasted $3
billion on accommodations, food,
transportation and entertainment. It hoped to
open the country up to an influx of tourism, foreign
trade, international development, and improve
its geopolitical stance.
For Brazil, the exponential cost of new
roads, transit lines, stadiums and hotels only
added to the mounting tensions between the
Brazilian government and its people.
Construction pushed out locals from their homes,
with estimates suggesting anywhere from 250000 to
1.5 million people had to abandon their homes and
only a few received compensation.
The government has to borrow money.
When they borrow money, interest rates go up and
it chokes off economic activity rather rather
than helping economic economic activity.
And the notion that because you host the World
Cup and you're on the world stage, but being on
the world stage for Rio, what happened is a lot of
embarrassment is what happened.
Funding for the World Cup's infrastructure
reaches to $11.6 billion.
Nearly half of those proposed projects were
never built. Protesters criticized both FIFA and
the local government officials, advocating that
funding would have been better allocated to the
people rather than football stadiums.
For the 2022 World Cup.
Qatar has spent over a decade preparing for the
tournament, is estimated that expenditure is around
$229 billion and $500 million were spent per
week to speed up production.
I expect people to travel to Qatar from all over the
world and enjoy the game.
Sarah. You read about what's happening and is
everything going to be ready in time?
Is everything going to be up to the standards.
The country needed to build from scratch?
It needed stadiums, roads, trains, renovated
airports and hotels.
At the same time, the country is planning to
unveil Qatar's plans for 2030, hoping to become a
leader in sustainable urban development,
technology and innovation. However, being
on the world stage has also brought to light
allegations of corruption with FIFA and human rights
violations. In 2015, 41 FIFA officials were
indicted on corruption charges stemming from
bribery, racketeering, wire fraud and money
laundering. Some reports include bribes from Qatar
officials to land the 2022 World Cup.
In 2016.
Amnesty International reported numerous human
rights violations stemming from the pressure
the country was under to meet the 2022 deadline.
1.7 million migrant workers made up 90% of the
total workforce in Qatar, virtually all of which
lived in below par living and working conditions and
were grossly underpaid.
In the midst of his weary backdrop, Qatar is
expecting over 1 million tourists, 5 billion people
tuning in to the World Cup. And according to one
report, as much as $17 billion added to the
Qatari economy from the tournament.
While that seems like a lot. That's nearly 7% of
the estimated $229 billion spent.
At the end of the day, for many of these
countries, hosting the FIFA World Cup is viewed
as an honor. Football is the most popular sport in
the world, with over 5 billion fans worldwide.
Countries like South Africa have seen some
benefits years after hosting, though the
country was hampered with debt and stadiums that
have gone unused. The country has seen tourism
steadily rising since hosting in 2010.
In 2026, the US and North America are looking to
replicate its success from the 1994 World Cup.
To date, the 94 World Cup has been viewed as the
most successful World Cup, attracting the most
fans ever for 2026.
The tournament has expanded, meaning more
fans from all over the world will be flocking to
North America, spending big on the World Cup.
Stadiums are spread across 11 US cities, three
cities in Mexico and two in Canada.
East Rutherford, New Jersey, hosted the games
back in 1994, and they're one of the few cities to
host again in 2026.
The overall cost of the 1994 games in the US were
low. Stadiums in many cities already have the
infrastructure required an overwhelming number of
stadiums used for NFL stadiums.
Back in 94, although we didn't have as many soccer
stadiums as we have today. We did have
football stadiums, NFL's football stadiums, college
football stadiums that pretty much with small
modifications, could be used for the soccer
matches.
Since 1990, there have been 25 new NFL stadiums
built, all of which increase the number of
fans it can hold in 94.
East Rutherford had Giant stadium at the time.
It held over 78,000 fans.
The newer MetLife Stadium, built in 2010,
can house over 82,000.
A relative to our economic impact, the state of New
Jersey. During the process, when we were
doing our bid and introducing New Jersey to
everyone had hired an outside third party entity
to do a basic or an initial economic impact.
And it was determined that World Cup coming here
in 2026 would be in excess of $800 million.
Since 1930, the World Cup has captivated billions of
football fans. Fifa has been able to reinvest
funds generated from the World Cup back into both
men's and women's football committees
worldwide. And amid FIFA's controversies and
whether or not it makes financial sense to host
the tournament, fans from all over will continue to
tune in with hopes and aspirations of their
country winning the World Cup.