FIFA and the Cost

Posted by on June 15, 2014 10:37 pm
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Categories: Entertainment Opinion The World

Soccer City Stadium in Johannesburg, South Africa

Soccer City Stadium in Johannesburg, South Africa

As the FIFA World Cup is underway in Brazil there have been protests in the streets crying out against the $11 billion spent to bring the event to the country. Eleven billion dollars is a lot for any country to spend on something that doesn’t directly affect the citizenry of that country, so should FIFA, and the IOC, a similar organization, foot a large portion of the bill in whichever country wins the bid of host.

The answer, unfortunately, is not so clear. FIFA has decided to cover the $2 billion of operational costs for the 2014 World Cup, taking some pressure off Brazil, but $2 billion is a fraction of the $11 billion already spent. A study I found that shows that the actual costs of the 2010 World Cup were several times that of the projected costs. It was projected to cost around $650 million and ended up costing over $7 billion; over 10 times the projection. (The study also shows that the U.S. lost $9 billion from the 1994 World Cup.) A large portion of these costs in Brazil, were in infrastructure, Asia One reports that $7 billion of the $11 billion was to improve infrastructure in Brazil. While the other $4 billion was to build or renovate 12 stadiums, reportedly Brazil’s decision. FIFA would have accepted only 8 or 10 stadia. However, given the way countries win the “privilege” to host these tournaments, it is likely that had Brazil not agreed to use 12 stadiums they would not be host.

QUOTESeven billion dollars on infrastructure in just a few short years for a specific purpose seems excessive. Especially given that the traffic levels on the roads, trains, or airports will never reach the level on a normal day as they will during the short weeks the World Cup is in town. Maybe it isn’t about whether countries without “proper” infrastructure should host these events, but perhaps more about FIFA’s expectations of how the infrastructure should be. Here, in downtown Cleveland, Ohio, the Cavaliers, Indians, and Browns all have stadia in the city, the roads running to or from the stadia are all 4-lane, but then again, so are many of the streets in Cleveland. The point is that it isn’t unusual to be stuck in very heavy traffic for 45 minutes or more leaving a game, and you should always arrive at least 30 minutes before due to the traffic and lines at the gate. It is a planned part of the evening, no matter how unpleasant, to spend time in traffic and waiting around. Maybe the host countries and FIFA both need to utilize more of the established infrastructure and allow for heavier traffic to and from the games; longer wait times. This way, they can spend less money on superfluous infrastructure that will surely fall into disrepair after the games end. For example, an 18-mile stretch of Ohio Route 8 was upgraded to a 4-lane freeway over several years and according to the Akron Beacon Journal cost $262 million dollars. For $7 billion dollars, 481 miles of Route 8 could have been constructed.  For the few miles that surround a stadium, 481 miles seems to be more than necessary.

FIFA, on the other hand, is expected to bring in $4.28 billion on commercial revenue alone, that’s TV deals and sponsorships, not ticket sales. According to FIFA, the cheapest ticket to any game is $90 the most expensive being $990 and 2.57 million have been “allocated” already. So, the average revenue, based on those two ticket prices would be $1.387 billion. Bringing the total estimate of revenue to $5.667 billion, more than enough for FIFA to have covered the costs of the stadia in Brazil.

FIFA is essentially a middle man, facilitating an event, and allowing locals to do the rest, all the while generating enough revenue to make a car company happy. FIFA and the IOC could both afford to build the required facilities and operate them during the course of their games, leaving only the infrastructure to the host nations. This strategy could help in the coming years as nations are becoming weary of the high price tag and intangible benefits of the games. The 2022 Winter Olympic Games, for example, have only two nations viably competing to host, Kazakhstan and China, two nations with human rights violations according to the international community, something contrary to the Olympic Charter’s second fundamental principle: “… the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.”