Soccer World Cup Hosting: Economic, Social & Environmental Impact

Introduction

This paper assesses the advantages and disadvantages of bringing the Soccer World Cup to a city in the United States, including its economic, environmental, and social impact. Soccer is a major sport around the world, but it has yet to gain top priority among common Americans. It is widely regarded as the most-watched sport across South America, Europe, Asia, and Africa. There are many club-level competitions that take place in the United States, but hosting the World Cup would definitively raise the overall level of the game in the country.

Economic Perspective

There are great economic prospects for any nation chosen to host the Soccer World Cup. First, it is considered a powerful image booster for the host city as well as the nation itself. From a corporate perspective, World Cup sponsorships steadily rose from approximately two billion U.S. dollars in the early 1980s to more than twenty billion U.S. dollars in 2006. This is a massive tournament that attracts more than half of the world's population as viewers — more than 3.5 billion viewers were recorded for the 2010 tournament. Some of the major sponsors include Adidas, Coca-Cola, and McDonald's.

When the World Cup was hosted in the United States in 1994, approximately two-thirds (65%) of overall sponsorship money was directed to sports. This figure is comparable to 63% in Germany, which hosted in 2006, and 80% in South Africa, which hosted in 2010.

The value of sport sponsorship in these countries makes clear that "World Cup hosting will definitely bring a huge boost to the local as well as the global economy" (Rich, 2000). In the case of the U.S., hosting the World Cup will generate job opportunities for citizens. Reports consistently document a large construction boom in host cities, requiring infrastructure to be renovated or built from the ground up. "Stadiums, roads, restaurants, hotels, and other public places should be made more attractive and useful to visiting tourists" (Taylor, 2000).

Tourism is another sector that can greatly benefit from such an event. In countries like South Africa, a significant portion of the economy depends on tourism, and major sporting events cause the industry to flourish. In the United States, the World Cup would create substantial employment for locals — particularly relevant given that overall unemployment has at times exceeded nine percent. The event can help local firms increase business by selling World Cup-related merchandise, which in turn can help reduce unemployment. Because many tourists and locals visit bars and restaurants throughout host cities during matches, there would also be significant opportunity for small American business owners to expand and profit from the event.

Many souvenirs related to a sporting event can be exported by domestic industries to earn additional revenue — the Vuvuzela from South Africa's 2010 World Cup is a well-known example. American industries could similarly leverage their resources to market distinctive products to a global audience.

Despite these economic prospects, there are notable disadvantages that must be managed carefully. Security represents a significant cost: incidents of theft, accidents, and hooliganism are commonly reported at major international events. Organizers must dedicate maximum effort to restraining such behavior. In some cases, fans of losing teams have gone on to vandalize or destroy public property. "The organizers should try to impose appropriate penalties toward any individual who attempts to take the law into their own hands or break it" (Watt, 2003). Failure to maintain order can have serious consequences for the host nation's economy and international image.

In this regard, the United States and its cities rank considerably better than many developing nations such as South Africa. Should a security problem arise, American authorities have the tools and expertise needed to address it effectively and limit economic or social damage.

There is also the issue of properly managing tournament costs. There are many instances where events cost far more than anticipated — the 1994 World Cup in the U.S. was estimated to cost the government more than five billion dollars, which exceeded earlier projections. Governments should therefore monitor finances closely and reassure investors that the event will be organized within a reasonable capital budget.

Hosting the World Cup can also contribute to Gross Domestic Product (GDP) growth. South Africa's overall GDP increased by approximately two percent in 2010 largely due to the World Cup, and more than 300,000 new jobs were created by the event. The United States could benefit both in the short term and the long term. Because the American economy is consumer-driven, organizers can use media channels to encourage the public to purchase World Cup-related goods and equipment, benefiting both individual firms and the broader economy.

The event also serves as a powerful mechanism for attracting foreign investment by demonstrating how successfully such an occasion can be organized and what returns individuals and firms can achieve. However, government must remain vigilant against construction delays and labor disputes, which frequently undermine the overall economics of the event.

Social Perspective

Sports have historically been used to bring nations closer together, particularly those experiencing political or military tensions. A notable example occurred in 2002 when South Korea and Japan co-hosted the World Cup. Although these two nations maintain formal diplomatic relations, their publics had held an unfavorable view of each other due to pre-World War II conflicts and related historical grievances. "The World Cup was a perfect occasion to bring these two nations closer to each other on a more public level" (Gratton, 2001). This kind of cooperation is essential for the healthy economic growth of both nations and the wider region.

In the case of the United States, organizing such a large and celebrated tournament can create common ground among individuals of different nationalities alongside local citizens. Since they share a passion for soccer, the event can serve as an opportunity for people with the same sporting interest to connect. Events like the World Cup can also be used to grow American interest in soccer, a sport that currently competes for attention with baseball and basketball. Top European soccer clubs could use such an opportunity to expand into the U.S. market and better understand American consumer preferences.

Host cities are typically required to reduce crime rates in order to give visiting tourists confidence in their safety. Trafficking of drugs and other contraband should be restricted, and gun-related crimes should be reduced as much as possible in order to maintain law and order throughout host cities. "Emergency services should stay on high alert during all matches" (Levermore, 2004), as accidents during large crowd gatherings can result in fatalities. The public should be encouraged to remain vigilant at all times and to look out for others around them.

Conclusion

This paper focused on the many advantages and some disadvantages an event like the Soccer World Cup might bring to a city in the United States. The primary areas of examination were economic, environmental, and social. The discussion covered how hosting the World Cup could create more job opportunities for local residents, upgrade infrastructure to better serve tourists and citizens alike, and allow various businesses to profit from the tournament. It also explored how such an event can help bring about positive environmental and social impacts in the communities where it takes place. While the challenges — including cost overruns, security demands, and environmental trade-offs — are real, careful planning and strong governance can allow the United States to maximize the considerable benefits this tournament has demonstrated in past host nations.

References

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Shilbury, D. (2003). Strategic Sport Marketing. Crows Nest: Allen & Unwin.

Foster, J. (2004). Political Economy of Global Sporting Organizations. New York: Routledge.

Levermore, R. (2004). Sport and International Relations. New York: Routledge.

Gratton, C. (2001). Sport in the City. London: Routledge.

Taylor, P. (2000). Economics of Sport and Recreation. London: E & FN Spon.

Rich, W. (2000). Economics and Politics of Sports Facilities. Connecticut: Quorum Books.

Watt, D. (2003). Sports Management and Administration. New York: Routledge.