By Emily Milstein
International sporting events provide platforms for host countries to broadcast their national glory. With the world watching, a host nation can showcase its achievements and further dazzle audiences with its ability to successfully organize a massive undertaking. The world watched this story play out with the Olympics in Athens, Beijing, London, and Sochi, as well as the World Cup in South Africa recently.
As host of the 2014 World Cup which began in June, Brazil hoped to use the event to fulfill similar aspirations. Hosting the Cup can publicize Brazil’s progress and growth as a developing nation, worthy of hosting not only the 2014 World Cup, but also the 2016 Olympics in Rio de Janeiro. Furthermore, Brazil is considered by many to be the “spiritual home of soccer.” This gives the country’s role as host even greater significance to the nation’s population, many of whom are avid soccer fans.
However, global sporting events such as the World Cup require huge investments and a massive amount of capital from host countries. China spent approximately $40 billion to host the 2008 Summer Olympics, Russia spent an estimated $50 billion on the 2014 Winter Olympics, and South Africa spent $3.5 billion to host the World Cup in 2010. While FIFA, the international governing association of soccer, provides some of the capital needed for each tournament, host countries are responsible for providing money needed for projects like infrastructure improvements. These improvements often cost billions of dollars. Such expenditures can generate considerable popular resentment but host governments often justify these costs with claims that the event will bring economic benefits to the country. Brazil is no exception. The country’s leaders have claimed that hosting the tournament will bring economic prosperity to Brazil through increased tourism, job creation, and infrastructure development. In fact, at a cost of $11 billion the 2014 World Cup is set to be the most expensive World Cup ever held, even before expected overrun costs.
Brazilians from a variety of backgrounds have heaped criticism on the Brazilian government for spending so much money on a month-long sporting event in a country where many live in poverty. Brazil is a rapidly developing nation where, according to the World Bank, 15.9% of the population still lives in poverty. Social services such as education, healthcare, and housing remain woefully inadequate. Recent demonstrations in Brazil reflect these grievances, as teachers, bus drivers, police, and even bank workers have mounted protests and strikes against poor working conditions and inadequate wages.
The discontent throughout Brazil in the lead up to the World Cup reflects questions that need to be asked, questions that have come up time and time again as countries continue to spend outrageous amounts on such events. Can a country justify spending huge amounts of money on a sports tournament while many of its people live in poverty? Shouldn’t the $11 billion spent by Brazil to host the Cup be used instead to improve necessary services such as healthcare? Lastly, are the potential benefits worth the immense financial costs that come from hosting large sports events, such as the World Cup or the Olympics?
Ultimately, the benefits promised by organizers of global sports tournaments often fail to materialize. Sydney for instance, did not experience the transformation and increase in tourism promised by its leaders after the city hosted the 2000 Olympics. The 2002 World Cup in Japan brought minimal benefit to the downtrodden Japanese economy. After the 2010 World Cup in South Africa, the country struggled to recoup the $3 billion it invested in hosting the tournament.
For Brazil, the costs of the World Cup will most likely exceed any benefits the country may gain from hosting the tournament, especially given the fact that the corruptionthat has long haunted the country has infiltrated even its preparation for the Cup. For instance, building contracts for World Cup projects have been awarded to friends and cronies of politicians. Given such corruption, any of the economic benefits generated by thegames will benefit already wealthy Brazilians. An auditor’s report assessed the cost of the ready-made grandstands in Brasilia’s stadium at $4,700. The construction firm that installed the stands however charged the government $1.5 million. That price increase amounted to a 31,000% mark-up of the grandstand fees. Such instances of corruption siphon public funds into the hands of construction magnates and away from other possible uses, such as education.
Furthermore, while Brazil will earn revenue from the Cup, FIFA will also pocket a significant portion of Cup revenues by pursuing tax exemptions and through licensing and advertising. Unfortunately, this means that most Brazilians will accrue few benefits and have limited access to World Cup profits, as such earnings remain concentrated in the hands of Brazil’s elite and FIFA. FIFA has attracted significant condemnation in the international news media about its pocketing much of the revenues generated by the Cup. Hopefully, such criticism will push the organization to rethink its business model. FIFA and Brazil’s leaders ought to take steps to ensure that at least some portion of the Cup’s profits are spent on necessary projects such as improving poor Brazilians’ access to high quality education or healthcare.
Questions about excessive spending for sports tournaments apply not just in the context of Brazil, but to the world at large. The practice of spending huge amounts of money on sporting events is wasteful because that money could be invested in essential programs or services. All countries have people who live in poverty and who would benefit from improved social services and increased investment in areas like healthcare and education. Nonetheless, the drive to host events like the World Cup is strong in many countries because playing host on a world stage allows them to showcase their ability to plan and organize an event on such a large scale. This is particularly important for recently industrializing nations like China or Brazil who want to showcase their nations’ advancing development programs in order to raise their national profile and attract business investors. Nations that host large sporting events do experience these tangible benefits, however the costs of these endeavorsoutweigh their benefits. This is especially true given the short term nature of some of the primary gains, including job creation and tourism, which end with the closing of any tournament.
Given the lack of long-term financial benefits that comes from hosting large sporting events, the international community needs to reconsider the grand expenditures that go into such tournaments. Citizens and their governments need to re-assess their priorities and come to the realization that rather than investing money in sports, nations should increase spending on issues like fighting the effects of climate change and social services. Brazil’s World Cup and the protests experienced in the weeks leading up to the tournament highlight these problems, revealing the flawed priorities at play, as the country spends billions on sports while many Brazilians live in poverty. Far too often, people question sports spending during tournaments and then promptly forget the issue at the close of the event. Let this summer be a moment for the world as a whole to reevaluate and redirect its priorities regarding the exorbitant spending on global sports tournaments. Rather than forgetting these issues after the World Cup, we need to continue to raise questions about spending in order to ensure excessive spending practices do not continue in the future.