Canberra: World Cup bad for economy?

In an appropriate follow-up to the IMF report that I blogged on yesterday, The Sydney Morning Herald reports today that the government of Australia has been sitting on a report that argues that the economic benefits from hosting a World Cup finals often don't materialize the way organizers predict. Australia's Tourism Department commissioned the report last year, but the government of Prime Minister Kevin Rudd -- which has poured millions of dollars into the bid and has hired expensive outside consultants -- intervened to prevent its publishing.

Excerpt here:

The report is believed to recommend a series of rigorous principles which governments should use to evaluate the costs and benefits of hosting major events and to include an analysis of the World Cup.

It is believed to argue that claims by proponents that countries which hosted such events would secure massive economic benefits often did not stand up to scrutiny.

The report says these claims often overstated or double-counted the benefits while also failing to take into account the full costs of staging the event.

In the case of the World Cup, it identifies building stadiums, improving public transport and providing security as significant costs mounting into several billions of dollars.

The federal government is spending $45.6 million over three years assisting the Football Federation of Australia's bid for the World Cup.

It strikes me as odd that that the government of Australia would commission such a report, knowing there have long been suspicions that hosting major international sporting events was hardly the economic breadmaker that everyone seems to say it is, if they would simply have to block its publication if it proved unfavorable to the bid.

Many casual observers easily fall for the classic line that the World Cup, Olympics, etc will bring huge economic rewards to host nations. The fact that nobody in Australia, or its main 2022 competitors like the United States, seems to be questioning this logic in the first place is a sure sign that governments often get a free pass by peddling this argument.

Why commission a study you know might take the wind out of your sails?

New Study Disputes Economic Benefits of Hosting WC

We're back from a short hiatus, and as the bidding for the 2018 and 2022 World Cups heat up, a new IMF study has been released which disputes the frequently-touted line that major sporting events bring major benefits to host nations. The Age newspaper in Australia has the story:

AS AUSTRALIA finalises its bid to stage soccer's World Cup, the International Monetary Fund has published an article arguing that the economic benefits of big sports events are negligible, while the costs tend to be far heavier and long-lasting.

Drawing on evidence from the Sydney Olympics, among other events, US economist Andrew Zimbalist concluded that the economic gains from staging big sporting events are ''modest to non-existent''.

While economic studies financed by host governments report net benefits in hosting big sporting events, the studies are not objective and suffer from many flaws, he warned.

The author is a Professor at Smith College, and he warns that countries should conduct careful cost-benefit analyses before bidding on major sporting events, as costs often wildly surpass what was predicted.


It's no secret that studies commissioned by bid committees are hopelessly biased. While it does not reveal anything new, this study simply reinforces what many skeptics have long been saying: That while national pride and other factors motivate countries to bid on expensive sporting events, the host nations are generally worse off financially than they were before the events began.

Nelson Mandela and South Africa's World Cup

With my streets and sidewalks absolutely battered by snow -- much like the rest of the East Coast -- it's tough as a soccer fan not to look a few months forward to June's historic World Cup finals in South Africa.

Today happens to be the 20th anniversary of Nelson Mandela's release from prison in South Africa -- a pivotal step in helping break apartheid rule in the country. There are celebrations being held throughout the nation.

Also noteworthy, though paling in comparison to his role in establishing a democratic South Africa, is Mandela's role in securing this summer's World Cup. On a day when South Africans remember Mandela's courageous leadership and wisdom, soccer fans worldwide should also commend his vision and hard work, as they look forward to a historic tournament for South Africa, the continent as a whole, and the sport itself.

FIFA says World Cup 2022 will be held in Asia?

There are a lot of stories out this morning on Indonesia's faltering bid. While the bid had many doubters from the start, due largely to potential security or infrastructure problems, when the host country's government doesn't even get on board, it's time to start packing.

But here is one interesting line, buried deep in an ESPN article. The Deputy Secretary General of the Indonesian Football Association (PSSI) told the Jakarta Globe that FIFA had confirmed the 2022 World Cup will be held in Asia.

"FIFA has confirmed the 2022 World Cup will be held in Asia. Australia and Indonesia have a chance, but Australia doesn’t want to face us head-to-head,” Dali claimed."

We'll wait to see what FIFA has to say on this, but the American bid can't be happy to hear about any such "confirmation" from FIFA that they will essentially be frozen out of both World Cups.

With 10 months to go, World Cup bidding heats up

For those of who you don't check the site regularly, I highly recommend checking out World Football Insider's coverage of the bidding process for the 2018 and 2022 World Cup finals. Their latest offering is an interesting analysis/handicapping of the various countries bidding to host soccer's biggest prize.

It's not surprising that they have England leading the field. Many writers, commentators and FIFA insiders have said that 2018 was the UK's race to lose, with its influence in FIFA, its impressive collection of tournament-ready stadia, and the fact that soccer's birth nation has not hosted the cup since 1966, which also saw the country raise its World Cup trophy. With a European World Cup looking more and more likely in 2018, England looks to be the best bet, although there have been some problems with bid cohesiveness over the past several months. If England experiences a tragic fall, Russia and the joint bids of Holland-Belgium and Spain-Portugal would gladly step in to fill the void.

What really interests me, and where I expect the battle to really intensify, is over the rights to hose the 2022 World Cup. A European victory in 2018 essentially makes the next cup a three-horse race between Australia, the United States and Qatar. Indonesia's bid is on life-support, and Japan and South Korea have been fairly recent hosts.

WFI and other authoritative news sites don't seem ready to make predictions on which of these three would come out of this race. Ask the Australian press, and they say its down-under vs. the new world. Ask the Americans, and they tell you its the Qataris they are worried about. It should be an exciting ten months to say the least.

Affair doomed 1998 US World Cup Team

Add lewd sexual conduct and illicit affairs to the long list of reasons why the United States has never quite been able to get it together in the World Cup. It has long been believed that the 1998 World Cup team -- which lost all three of its matches in group play, including to Iran (seriously), and finished dead last -- suffered from some off-field distractions as well. And over the last several days, it has been confirmed that John Harkes, one of the heroes of the historic 1994 host team, was dropped from the team by coach Steve Sampson because he was having an affair with the wife of teammate Eric Wynalda.

Sampson was quoted in an Associated Press piece on the affair and its effect on the team:

"The private issues for me were the most serious issues. I think I could have lived with everything else and kept John on the team if it had not been for the private issues. It's one thing to have an affair outside the team. It's another to have one inside. ... There are just certain lines that one cannot cross [my emphasis]."

Yeah, that's one of putting it. It's bad enough wondering when, or if, the US will ever to catch up to the rest of the world in soccer. But having the captain of the team -- the one who is supposed to exercise leadership -- sleeping with a teammate's wife is a disgrace to the country and its soccer fans, few as there are.

A sad revelation from this story is that having a national soccer program that makes more headlines for this type of shenanigans than it does with its play certainly won't help convince FIFA that the US is worthy of hosting a second world cup. Or, given FIFA's traditional affinity for shady behavior, perhaps it might help?

So, who can bid for the 2018 World Cup?

The short answer that FIFA is now peddling? Everyone

The actual answer? Only the Europeans.

FIFA President Sepp Blatter invited controversy last week by claiming that the 2018 World Cup may be limited to Europe. As he put it, "Only a European candidate will be evaluated for the 2018 World Cup. It's still not decided, but it's an idea to help facilitate the work of FIFA and its executive committee."

For those of you who are new to FIFA, "to help facilitate the work of FIFA and its executive committee" actually means to make Sepp Blatter's job easier, and that he would rather dispense with the b.s. right now, as everyone knows the 2018 World Cup with be in Europe anyways. Naturally, however, such an affront to the supposed open-application process for the World Cup met with angry responses world wide, and Blatter has since backtracked.

This leaves the US in a position to be spending millions of dollars to bid for two World Cup tournaments simultaneously, one of which they will almost assuredly not get. And it leaves the United States competing for 2022 against what is at the moment a disastrous runaway train of an Australian bid, and a surprisingly shrewd and well-coordinated Qatari campaign. Game on!