FIFA World Cup Hosting: Advantages and Disadvantages for Cities

Introduction

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.

FIFA Soccer World Cup: History and Global Reach

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.

Advantages to Hosting the World Cup

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).

Conclusion

Although soccer is a globally enjoyed sport, it does not command in the United States the following it enjoys elsewhere in the world. One only has to compare the 91 million fans who watched the Super Bowl with the 17.5 million who watched the World Cup final to appreciate the significant difference in domestic popularity. Nevertheless, the prospect of hosting such a large international event remains an attractive possibility for many cities. Like any major sporting event, the FIFA World Cup brings both benefits and disadvantages to a potential American host city.

Two primary advantages stand out: prestige and economic opportunity. The World Cup is one of the premier sporting events in the world, and being chosen to host it is an honor. There are also tangible economic benefits — millions of visitors, an opportunity to build the host city's brand as a tourist and business destination, potential to attract foreign investment, new infrastructure, tax revenues, and an economic boost to areas in decline. These are genuine and significant gains.

However, the disadvantages are equally real. The economic benefits may only negligibly outweigh the enormous costs of preparing a city for an event on the scale of the World Cup — and in some scenarios may not outweigh them at all. If the event does not unfold as anticipated, the reputational damage can be long-lasting and deter future events from choosing that location. The ongoing cost of maintaining specialized facilities will burden the host city for years after the tourists have gone home. Add to this the fact that soccer simply does not have the American following it enjoys elsewhere, and hosting the World Cup becomes a decision that any American city would need to weigh very carefully before submitting a bid.

References

2010 FIFA World Cup. (2008). Retrieved December 14, 2009, from

2010 FIFA World Cup South Africa. (2009). Retrieved December 14, 2009, from http://www.southafrica.info/2010/worldcup-overview.htm.

Business tourism and FIFA 2010 Soccer World Cup. (2008). Retrieved December 14, 2009, from

Previous FIFA World Cups. (2009). Retrieved December 14, 2009, from

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.

The 2010 Soccer World Cup: Africa's time has come. (18 Aug 2006). Retrieved December 14, 2009, from

The history of the FIFA World Cup. (2009). Retrieved December 14, 2009, from