World Cups are not only one of the biggest sporting spectacles on the planet but also one of the greatest drivers of economic growth in the host country, if utilised judiciously.
At the macro level, big-ticket tournaments like the FIFA World Cup provide at excellent opportunity for the host nations(s) to boost key sectors of the economy namely tourism, hospitality and infrastructure. Nations which already have a developed sporting infrastructure are well placed to make the most of the football fever.
But how much exactly does a World Cup benefit a nation? UK based credit brokers Money Pod have analysed the last four World Cups and arrived at the conclusion countries with already highly developed infrastructure were able to make a substantially bigger profit than the ones who had to build things from scratch.
According to Money Pod, the 2006 World Cup in Germany was the most profitable edition of this century with a reported cost of $6 billion for hosting the tournament resulting in an estimated economic impact of $14.1 billion, which works out an overall profit of $8.1 billion to the country.
According to the study, the German government’s tourism revenue rose by $400 million and 500,000 jobs were created in the lead-up to the tournament. The city of Cologne reported the number of visitors after the World Cup increased by 10 per cent.
The 2002 edition in South Korea and Japan came in second on profitability. The tournament cost $7.5 billion to host and resulted in an economic impact of $11.8 billion, resulting in a profit of $4.3 billion to the two nations.
The Arena da Amazonia is located in Manaus, Brazil pic.twitter.com/LdJ3y43aE0— Business Insider (@businessinsider) June 27, 2018
The 2010 South Africa World Cup was not so profitable. The African nation spent $4 billion in hosting the tournament, pouring money on building six new stadium and upgrading infrastructure. While an overall economic impact of $5.6 billion meant a profit of $1.6 billion to South Africa, there has been little positive impact on their footballing fortunes with Bafana Bafana failing to qualify for the 2018 World Cup in Russia.
The 2014 edition in Brazil was by far the most extravagant of this century. According to Money Pod, a staggering $14 billion was spent on hosting the World Cup and with an estimated economic impact of $13.4 billion, there was a loss of $670 million.
However, the bigger criticism of the Brazil World Cup is that after the tournament was over, some of the venues became deserted and saw hardly any matches held there with the Estadio Mane Garrincha in Brasilia converted into a bus depot.
Let’s see what Russia ends up with after dust settles on World Cup 2018.