World Cup Offers Record Windfall for FIFA, Dubious Payoffs for Host Cities

FIFA President Gianni Infantino has ambitiously billed the 2026 World Cup, set to kick off this Thursday, as “the greatest event that humanity has ever seen.” Forgive us for siding with Muhammad Ali, who, after promising his 1974 heavyweight title bout against George Foreman would be “the greatest event of all time” and “bigger than Evel Knievel and the Kentucky Derby on the same day,” actually delivered.

What’s not up for debate is that this year’s tournament, jointly hosted by the US, Mexico and Canada, will be the most lucrative event in sports history. Host cities, however, may not walk away feeling as flush as FIFA.

More Games but Not Game-Changing

FIFA expects record revenue of $13 billion in its 2023-2026 cycle, up 72% from the previous Qatar cycle. The number of teams participating is rising to 48, up from 32 at the 2022 Qatar World Cup, and the total number of games is climbing from 64 to 104, meaning more matches to sell to broadcasters. No wonder global TV revenue, FIFA’s biggest earner, is projected to rise to $3.9 billion from 2022’s $3.4 billion haul. 

Additionally, FIFA and local officials have promised massive economic activity in host cities: $3.3 billion in the New York area and $2.1 billion in Dallas. But those forecasts should be served with an ocean’s worth of salt. Researchers at the University of Lausanne found that, of the 14 World Cups from 1964 to 2018, only Russia’s 2018 tournament was profitable for the hosts. S&P Global analysts wrote last week that “for the US, the World Cup is more likely to be a significant cultural event than a national economic game changer”:

• For one, this year’s tournament is spread across 16 host cities. That will make any temporary economic boost even more difficult to distinguish because it will be so diffused, they said.
• S&P also noted that the World Cup is taking place at existing stadiums, which means infrastructure spending has been limited. 

Sinning is Winning: No matter what country earns the tournament’s 18-karat gold trophy, the vice economy will walk away a winner. Investment bank Macquarie estimates that betting volumes on this year’s World Cup could total $50 billion, giving a 2% to 5% annual earnings boost to sportsbooks. And a survey by human resources firm UKG estimates workplaces in the US will lose $11.7 billion in productivity during the 39-day tournament, with employees expected to play hooky on key matchdays and even turn up hungover (and thus less productive) at the office.