2018 World Cup – The economic benefits of hosting the world’s most watched tournament

Following on from last week’s insight into England’s 2018 World Cup bid, A Different League delves into the potential economic benefits of hosting the prestigious competition can offer.

With the frenzied excitement of the 2010 World Cup draw in South Africa last week, the world’s most watched tournament is again at the forefront of people’s minds. With the international gaze fixed heavily upon Cape Town, the glitz and glamour that Charlize Theron and David Beckham brought to the stage during the draw has emphasised the sheer magnitude and global appeal this sporting event now carries. With the ever increasing financial gains and celebrity endorsements, the World Cup has over the past few decades become the most sought after competition a country can host.

Ever since the commercial success of USA 94, the World Cup has become a competition loved not just by football fans. The increasing advances in televised broadcast, satellite feeds and the birth of live internet streaming have meant any audience in any location around the world can be reached. This growing global network is making it easier than ever for viewers to watch events within seconds of them happening. Football stands alone as the most watched live event throughout the world, which has in turn created the commercially attractive, global spectator.

Sponsorship is FIFA’s largest benefactor. Each official tournament sponsor can expect to pay in excess of £100m in their attempts to lure in the immense numbers of emotionally driven, football-loving punters. However, it is not only the multinational conglomerates that find the World Cup’s commercial properties an attractive asset. Cheaper travel costs have also led to a major increase in the numbers of travelling fans. The month-long migration of millions of international football supporters has a huge knock-on economic impact for a host nation, carrying with it the potential of massive financial rewards.

If the subsequent World Cups since 1994 are anything to go by, then the 2018 World Cup will surely be one worth bidding for. The increasingly relentless media coverage following the highs and lows of England’s campaign have been well-documented. A bid which has been critiqued both nationally and internationally. However, few would be able to list England’s competitors to host the competition in 2018. Although bookies are waging England as favourites to host the 2018 World Cup, they are up against some very stiff opposition. Other bidding nations include the likes of Australia, a joint bid from Belgium and the Netherlands, Japan, Russia, USA and a joint bid from Portugal and Spain.

Seemingly it is perhaps Russia that yields the weakest bid in terms of hosting experience. Other than the UEFA Champions League final in Moscow in 2008, it is a nation who hasn’t hosted a high-level international sporting event in recent years. It is, however, one that can muster many financial beneficiaries in times of need and has already secured over £25m worth of backing (compared to England’s £17m) from key individuals such as Chelsea owner Roman Abramovich – a figure which if needed, is sure to grow. But does a lack of experience in hosting major sporting events hinder a bid’s potential for success? Before it was unveiled as Germany’s successors, few would have thought South Africa to be the setting for a FIFA World Cup.

It is then perhaps justified to suggest the nations who have hosted major sporting events do not purely boast strong bids because of their numerous international sporting facilities, but instead, that they are well positioned in terms of truly understanding the benefits of hosting a tournament such as the World Cup. The 2002 World Cup in Japan and South Korea saw unprecedented volumes of football fans without match-day tickets swarm to host cities to watch games live on giant screens. The vast difference in the number of travelling fans from four years previous during the World Cup in France was incredible, a number that was equalled in the 2006 World Cup in Germany.

This vast quantity of fans posed a potential problem for FIFA, what to do with all these supporters? By the 2006 World Cup, the FIFA Fan Fest was born. Originally designed to “provide a solution to the biggest problem facing the 2006 FIFA World Cup – the shortage of match tickets” the Fan Fest created an area where the ever-increasing volumes of fans could all mass. This nucleus of enthused supporters quickly became an incredibly appealing audience that marketers and salesman alike could target with ease as FIFA later acknowledged, the Fan Fests were also “a commercially attractive event too” and would become an indispensable component of future FIFA World Cups and their host countries.

These sites also offer some level of quantifying the astonishing economic impact the World Cup can have on a host nation. In the 15 FIFA Fan Fest sites throughout Germany during the 2006 tournament, over 3.5m hot dogs and 4m litres of beer were consumed by over 18m visitors. Over 19 000 staff were employed as a direct result of FIFA’s Fan Fest sites as well as creating the opportunity for official shops to make millions of pounds in revenue through the sale of official licensed products.

It would be overly cynical to suggest that hosting the World Cup is purely for financial gain. The social and cultural benefits are huge as well as showcasing the host country into the rest of the world. However, with an estimated 18m visitors travelling to a nation for a month-long event, it is clear to see the commercial potential of hosting the World Cup is enormous. From improved transport networks and construction to hospitality and accommodation, the tournament brings with it billions of pounds. It is estimated that if England’s bid is successful, then its 12 host cities can expect to produce anywhere between £150m-£250m in investment and revenue. An astonishing figure that in time of recession, seems too big an opportunity to be missed.

2018 World Cup

Critical FIFA vice-president proves important catalyst to strengthen England’s bid – December 1, 2009

The economic benefits of hosting the world’s most watch tournament – December 9, 2009

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