Cup This Past Autumn Fifa Soccer's World-Governing Essay

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This past autumn FIFA, soccer's world-governing body, announced that the 2022 World Cup would be held in the Persian Gulf oil state of Qatar. The United States had bid on this event and many believed the country had a good chance of winning (Leonard, 2010). The U.S. last held the World Cup in 1994. The success of that event, in which 3.58 million tickets were sold, spawned the return of a major soccer league to the U.S. And has renewed -- albeit slowly -- interest in the sport in the world's largest consumer market. The Qatar decision left U.S. Soccer, which came in second in the voting, disappointed and searching for a new strategy to build interest in the beautiful game in the domestic market. In addition to building the game in the U.S., the return of the World Cup to American soil would bring with it a host of economic and social opportunities. The World Cup also carries with it downsides, however. Certainly the prospect of air-conditioned outdoor stadiums -- temporary ones -- in Qatar smacks of environmental catastrophe but there would be challenges in the U.S. As well. This paper will discuss the benefits and drawbacks of bringing the World Cup to the United States again, using a variety of sources to analyze the potential issues involved.

Economic Considerations

The World Cup format typically involves multiple cities within a nation hosting dozens of soccer games over the period of one month. This creates significant tourism revenue, but there are high levels of costs associated with the World Cup. It should be noted that the country is a factor that should be considered. A substantial portion of the World Cup's benefit comes from the prolonged exposure that the host nation and host cities get from the rest of the world. It is reasonable to think that the benefit of this exposure is going to be diminished in a heavily-exposed country like the United States, relative to some of the smaller countries that have hosted the tournament. Baade and Matheson (2004) noted that the costs of hosting the 1994 World Cup were anywhere between $5.5 and $9.3 billion which the gains were touted around $4 billion by the event's proponents. The United States already had a high level of exposure so stood to gain less than other nations would, given the same exposure.

The exposure for smaller countries does have value, and the effects are both long-lived and widely spread across the economy. As early as 2007, South Africa's real estate market was experiencing a boom related to the World Cup. Property developers seized on the opportunity to leverage the publicity and create new housing and vacation rentals, and the much of this money came in the form of foreign direct investment (PropertyWire, 2008). South Korea saw fewer tourists than expected as the World Cup effectively reduced intra-Asia tourism to the country during the World Cup period, which is otherwise a prime time to visit the country (Dwinger, 2010). Arguably, however, the United States with its substantial capacity to absorb tourists would merely see non-soccer tourists diverted to non-soccer areas of the country during the Cup.

However, it is just as reasonable to assume that there will be some offset of soccer and non-soccer tourists in the event of a World Cup. It is also worth noting that in the United States, the stadium infrastructure is already in place. No new stadiums would be built for the World Cup, meaning that there would be only limited construction industry impact on the decision to host the World Cup. This was one of the major sources of short-term economic boom for the South African bid (Dwinger, 2010). With only moderate short-term gains from the World Cup, the economic benefit of hosting in the World Cup in the U.S. rests primarily on the long-run benefits. Hagn and Mannig (2007) noted that the 1974 World Cup in West Germany did not "generate any short to long-term employment effects there were significantly different from zero." This could potentially imply that a heavily-exposed country stands little to gain from the World Cup, especially in comparison with South Korea, South Africa, Qatar or other smaller nation hosts.

Studying the 2006 World Cup, also in Germany, Mannig and Du Plessis (2007) argue that not only does the German experience in 2006 show that very little long-run economic benefits are accrued, but that this finding is consistent with other major sporting events, which also are "rarely identified with significant net economic benefits." Indeed, if this is the case in Germany, it is reasonable to assert that perhaps the United States, with the world's largest economy, would be lucky to see a noticeable positive benefit anywhere in its $14 trillion GDP. To compare, even those optimistic about the economic benefits of the South African World Cup pegged the benefit at $3.5 billion, an infinitesimal figure compared to the total U.S. economy, and did not expect any long-run unemployment benefit despite South Africa's 25% unemployment rate giving the country obvious slack (Dwinger, 2010). U.S. Soccer, the body bidding on the World Cup, touted a $5 billion economic benefit and upwards of 100,000 temporary jobs. Only at the city level do the economic figures have any meaningful impact, where each host city could gain potentially $400-600 million in revenue and 5000-8000 jobs (U.S. Soccer, 2010). While doubtless the host cities would benefit since their stadiums are already in place, the net impact on the nation's economy is not significant.

Social Impact

The social impact of hosting a World Cup is going to vary from nation to nation, and there can be interesting implications. South Africa's experience is inevitable going to be unique, but that nation expected to see improvements in its tense race relations as a consequence of hosting the World Cup. Some American scholars have argued against this view, however, pointing out that the benefits of the World Cup largely accrue to wealthier classes while the lower classes are effectively left out. Worse, public funds were diverted to infrastructure such as new stadiums rather than to meeting pressing social needs (Colombant, 2010).

In the United States, where race relations are also relatively poor (albeit not as poor) and income disparity also substantial, similar social effects may be felt. It is also worth noting that the host team is automatically entered. This can allow fans from the entire nation to rally around the team. While this did not work well in South Africa because the team was poor, it does work well in nations where the host team performs well, such as South Korea in 2002. The United States does have a good team. However, unless the team proceeds further than expected, the sport is unlikely to gain a substantial number of new fans and any positive social outcomes from a rallying point are unlikely to last long.

Often cited as a major social benefit of hosting a major sporting event like the World Cup is the social benefit associated with the facilities. Most nations take advantage of having World Cup stadiums to attract other sporting events and concerts. In the United States, these benefits are not incremental to the World Cup decision, as the stadiums are already in place. No new benefits would accrue to any of the cities as a result of the World Cup's presence in the United States.

A study of perceived social impacts was conducted on Munich residents following the 2006 World Cup. This study (Ohmann, Jones & Wilkes, 2007) found that Munich residents viewed the social impacts of that city's participation in the World Cup as generally positive. Some of the impacts were urban regeneration, increased sense of security, positive fan behavior and the general atmosphere surrounding the event. There were some negative impacts that were perceived, such as increased prostitution, increased crime and displacement of local residents but these were perceived by relatively few respondents. In addition, those impacts are generally short-term in nature, as are some of the positive impacts. In the United States, many of these impacts would likely accrue as well. The displacement of local residents is often related to construction issues such as the use of eminent domain to free up land for stadium construction and this would not be a factor since all of the stadiums already exist.

Environmental Impacts

The World Cup has never been contested on a 'green' platform the way that many Olympic Games bids have. Qatar, with its outdoor air-conditioning concept stadiums, most of which are temporary, promises to be an environmental disaster. With pre-existing stadiums, a World Cup in the United States would have a decided edge in environmental friendliness over the proposals of many other nations.

The South African World Cup was seen as having strong negative environmental impacts. An environmental group cited the international travel to the Cup as being the primary culprit, with 67.4% of emissions associated with the Cup. Travel between host cities was cited as 17.6% of…[continue]

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