A FINANCIAL FORECAST – THE FIFA WORLD CUP

With the FIFA World Cup in full flow, billions of eyes have been focused on the host nation Brazil to see which team lifts the Jules Rimet trophy on Sunday 13th July and walks off with the winner’s cheque of $35 million. However, there is more at stake than just the 64 matches of football.

As allegations of corruption are being aimed at FIFA and Qatar who are due to host the 2022 FIFA World Cup, history suggests staging a World Cup tournament can generate billions for the host nation. Economic forecasters claim Germany 2006 generated $14 billion and South Africa 2010 benefited by $6 billion. The predications for Brazil vary from $3  to $14 billion depending on who you want to believe. Apart from tax revenues almost 4 million extra jobs have been created and an expected 3.7 million tourists will visit the country spending some $2,500 per head. Even a footballing nation like England can expect a boost in the retail sector despite the team failing to make it past the group stages. Forecasters predict a boost of $2 billion from sales of beer, televisions and fast food in this World Cup year.

Also, let’s not forget FIFA, who generated $700 million from the last World Cup staged in South Africa. Income is boosted by FIFA’s partners like Adidas, Visa and Hyundai who pay more than $100 million to partner the world’s single largest sporting event and drive sales of their latest football apparel, cars and transactions paid on credit.

No doubt the 2014 FIFA World Cup will break social media records with fans sharing their experiences across the digital world. There have already been more World Cup related tweets at this stage of the World Cup than during the entirety of the tournament in 2010. It will be interesting to see what the overall figures will show when it is all finished.

But, there is always a downside to such big events. Critics in Brazil argue the costs seriously outweigh the benefits. Stadium costs have tripled to nearly $4 billion, not to mention workers who have died building these magnificent facilities. Money that could have been spent on education and social issues has been diverted into hosting the tournament which is costing more than $10 billion to organize. Locals have been forced to move in order to accommodate football infrastructure causing a social unrest. Whilst football fans represent new visitors to Brazil, other non-football visitors are expected to stay away in equal numbers.

To the avid football supporter, most of these side-issues are exactly that. The most important action is taking place on the pitch. Whilst the greatest risk for the 32 participating teams is failing to make it out of the group stages (Spain, England), the risks for the host nation are a lot greater. No matter who wins in the Estadio do Maracana on 13th July, Brazil will feel the positive and negative effects for many years to come. Brazil play their final group game today against Cameroon where all they need is a point to qualify.

Vamos Brasil!

Michael Meuleners
Project Manager, Trefpunt-PRISM Amsterdam

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