Hosting the World Cup is no easy game
Massive sporting tournaments burnish image of governments, but the bill comes in later
The expense and scrutiny associated with the football World Cup often spark a debate on the merit of playing host.
Oil-rich Qatar, the tournament’s host in 2022, is 50th in football ranking despite the wealth of its citizens. A Qatari citizen was worth more than $62,000 on a per capita gross domestic product (GDP) basis before the pandemic, compared to just over $2,000 for the average Indian. While the correlation between wealth and football is limited, India has to make progress in both departments as seen in chart 1 (click image for interactive chart).
Hosting the World Cup has its advantages. Five out of the last six hosts got more tourists in the year of the tournament (chart 2). Some countries got more international tourists in the years after hosting the Cup, suggesting that the impression they make lasts.
Qatar abruptly banned alcohol around the World Cup's eight stadiums: international visitors criticised the step but data from marketing insight company Nielsen suggests that beer accounts for only 2.7 per cent of the tournament’s sponsorship spends compared to 15.8 per cent for non-alcoholic beverages. Research suggests that hosts usually lose money in major sporting events, like the football World Cup and the Olympics.
Gigantic stadiums are often of little use after multinational events, which host nations’ citizens have criticised for levies enforced to get funds.
Costs exceeded revenue by $50 billion, showed a September 2022 study of 43 events that included the Olympics and football World Cups.
“...more than four out of five Olympics and World Cups ran a deficit. The average return-on-investment for an event was negative (- 38%), with mean costs of USD 2.8 billion exceeding mean revenues of USD 1.7 billion per event,” said the study ‘The structural deficit of the Olympics and the World Cup: Comparing costs against revenues over time’ by Martin Müller, David Gogishvili, Sven Daniel Wolfe of the University of Lausanne in Switzerland.
Image boosting is said to be one reason that countries, often ruled by autocrats, choose to host such events. ‘Sportswashing’ refers to countries using sports to deflect attention from unsavoury aspects of their regime, such as human rights violations. An analysis of football World Cup hosts based on 'voice and accountability' scores shows a steady decline since the mid-2000s (chart 3).
FIFA, the sport’s governing body, earlier this year lifted its ban on India’s football association. India’s governance indicators are better than the two latest hosts of the World Cup—Russia and Brazil—but its football team ranks way below them at 106th spot.
For India, the fastest growing major economy, hosting an event like the World Cup will be a matter of pride. It will also attract scrutiny.