This paper examines the advantages and disadvantages of hosting the FIFA World Cup, with particular attention to the implications for American cities. After a brief historical overview of the tournament, the paper analyzes short- and long-term economic benefits — including GDP growth, job creation, infrastructure investment, and tourism — drawing on evidence from South Africa's preparations for the 2010 World Cup. The paper then addresses key disadvantages, such as uncertain economic returns, security risks, event management challenges, and the ongoing cost of maintaining specialized facilities in countries where soccer lacks a broad popular following. The analysis concludes that while hosting the World Cup carries significant prestige and economic potential, American cities must weigh these benefits carefully against substantial financial and logistical risks.
Soccer is a major sport in countries around the globe; however, the sport simply does not have the same following in the United States. Other sports in America are big business. The National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL), NASCAR Racing, and various collegiate sports all bring in billions of dollars every year for cities that host them. Competition for championship events is often fierce. Even global sporting events, such as the Olympics, see cities clamoring for an opportunity to host these prestigious extravaganzas. But what are the advantages and disadvantages of bringing the FIFA Soccer World Cup specifically to an American city?
A large number of countries consider applying to host the FIFA World Cup, and a significant number actually make a formal bid for this quadrennial tournament. To better understand the advantages and disadvantages of hosting the World Cup, this paper begins with a brief overview of the FIFA World Cup. This is followed by an examination of the economic and social advantages for a host city, drawing on literature specifically concerning the World Cup as well as other quadrennial global sporting events — the Olympics. Finally, the disadvantages of hosting the World Cup are explored.
The Fédération Internationale de Football Association (FIFA) Soccer World Cup is the world's biggest sporting event, second only to the Olympic Games. When considering television audience alone, the World Cup is actually larger than the Olympics ("2010 FIFA," 2009). The first FIFA World Cup was held in Uruguay in 1930. The event was developed by a group of French soccer administrators in the 1920s, led by Jules Rimet. The idea was straightforward — bring the world's strongest soccer teams together to compete for the title of World Champions. The World Cup was a success, but was suspended for twelve years due to the Second World War ("The history," 2009).
When the FIFA World Cup resumed in 1950, the event once again captured the world's attention. From 1958 to 1998, the World Cup was hosted alternately in Europe and the Americas. In May 1996, the Executive Committee broke with tradition and awarded the hosting of the 2002 World Cup to the partner countries of Korea and Japan ("The history," 2009).
To date, sixteen World Cups have been held, with seven different winners. The global appeal of the event is evident. More than 37 billion cumulative viewers watched the 1998 World Cup in France, including approximately 1.3 billion who watched the final match. More than 2.7 million people physically attended the 64 matches held in French stadiums ("The history," 2009). Although the World Cup does not have the same level of following in America as it does in other countries — particularly in Europe and South America — there is still a large contingent of American fans.
According to Sandomir (2006), the 2006 World Cup final match attracted 16.9 million American viewers — a 152% increase from the 2002 World Cup hosted in Japan, which had aired in the morning. The 16.9 million figure was 31% better than the 1998 World Cup when France hosted, and on par with the 1994 World Cup hosted in Pasadena, California. Of those 16.9 million viewers, 11.9 million watched on ABC while 5 million watched on Univision. These figures suggest that the popularity of soccer in America may be underestimated.
The 2006 World Cup final was broadcast at 2 p.m. on a Sunday and exceeded the four million average monthly audience for the NBA Finals between the Miami Heat and the Dallas Mavericks. This viewership was also extremely close to the 17.5 million Americans who watched the NCAA men's basketball championship game, and the 17.1 million viewers who watched the Chicago White Sox play the Houston Astros in the 2005 MLB World Series. Of course, as Sandomir (2006) notes, these figures pale in comparison to the Super Bowl's viewership of 91 million in 2006. Nevertheless, there is clearly significant interest in soccer and the World Cup in America.
Sturgess and Brady (2006) argue that hosting the FIFA World Cup is a matter of great national prestige. Beyond that prestige, however, there are a variety of concrete advantages for host cities, including immediate economic benefits, social benefits, and long-term macroeconomic gains. One only has to look at previous host cities — and at South Africa's planned benefits for the 2010 World Cup — to begin to see what a host city can garner.
In general, the short- and long-term economic benefits a city can expect from hosting the FIFA World Cup include increased GDP and increased employment, which can give the host nation a meaningful economic boost (Sturgess & Brady, 2006). For South Africa, it was anticipated that one job would be created for every twelve new tourists visiting the country — potentially equating to 16,000 new jobs, according to the South African Tourism board ("Business tourism," 2008). Studies focused on the demand boost generated by hosting a sporting event like the World Cup note that with three million visitors coming to South Africa for the 2010 tournament, the scale of that boost is considerable. Also relevant is the longer-term impact of investment in a nation's sporting facilities and other infrastructure that typically precedes such an event, as well as the positive economic impact of additional consumer expenditures generated by visitors during the tournament itself.
In South Africa, the 2010 World Cup was estimated to inject approximately 21.3 billion rand into the South African economy, with 12.7 billion rand representing direct investment. An anticipated 7.2 billion rand in tax revenues would also flow to the state. This money was earmarked for a variety of uses, including transforming infrastructure, rehabilitating decaying urban areas, and developing legacy facilities centered on sports development and sports tourism. It was hoped that the World Cup would attract 200,000 new tourists, many of them on business tourism incentive packages ("Business tourism," 2008).
Investment in a country's infrastructure and facilities — improvements that will continue to serve the nation for decades — represents one of the most significant social advantages of hosting the World Cup. In South Africa, the 2010 FIFA World Cup spurred a variety of multi-billion rand infrastructure projects for the country and for Cape Town specifically. These included a new stadium, transportation infrastructure improvements, and a range of other upgrades, including human resource development ("The 2010," 2006). Five of South Africa's soccer stadiums underwent major renovations for the tournament. Two completely new stadiums were built — one at Mbombela in Mpumalanga and one in the Nelson Mandela Metro in the Eastern Cape. Three others were rebuilt, with two becoming entirely new multi-sport facilities and the stadium at Green Point receiving a retractable dome ("2010 FIFA," 2009).
"Stadium construction, transport upgrades, and national branding"
"Costs, security risks, and facility underutilization after the event"
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Sandomir, R. (11 Jul 2006). Cup ratings are up, but fans deserve better. New York Times. Retrieved December 14, 2009, from http://www.nytimes.com/2006/07/11/sports/soccer/11sandomir.html.
Sturgess, B., & Brady, C. (4 Nov 2006). Hosting the FIFA World Cup. World Economics, 7(4). Retrieved December 14, 2009, from Business Source Complete.
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