Football's (never) coming home

Will Hodges asks if FIFA's emerging market favouritism is a blessing in disguise
Politics economics

Despair and disgrace: the Daily Telegraph's summation of FIFA's decision to award the 2018 and 2022 football World Cups to Russia and Qatar respectively. They were not the only ones put out by the announcement; watching replays of the award ceremony, I couldn't help noticing the look of bemusement on the face of poor David Beckham. If you look closely enough, you can see him mouthing the words "Where the bleedin' hell is Qatar?" to the fresh-faced prince sat beside him.

Since when has following international football required an A-Level in geography? Until recently, soccer's showcase event mostly took place in one of two "footballing" parts of the world: Western Europe and South America. So why break with tradition? More to the point, why host the biggest tournament in the sporting world in Qatar, a roasting hot desert state of just 1.7 million people which has never even come close to qualifying for the World Cup? The more cynical among us will look no further than Qatar's astounding financial clout. The oil-rich state is the world's wealthiest country in pro-capita terms with a gross domestic product (GDP) per head of almost $70,000 in 2009. For football's governing body however, Qatar represents something far more alluring than a quick buck. The Gulf state is an entry point to the rest of the Arab world, comprising some 340 million people between the Western Sahara and the Persian Gulf. It is one of the few places left on earth which has yet to be conquered by the commercial side of the beautiful game. Russia too, despite having a less than glorious footballing history, offers unprecedented access to soccer's frontiers in Eastern Europe and central Asia.

While a crushing disappointment to English football fans, FIFA's decision to spread the game eastwards reeks of pragmatism. Including 2018 and 2022, the world's most watched sporting event will have landed in four emerging markets in a row: South Africa, Brazil, Russia and Qatar. Coincidence? Hardly. Unlikeable he may be, but FIFA Chief Executive Sepp Blatter is no fool; as most economists will point out, the global financial pendulum has well and truly swung away from Western economies and towards the developing world. The future of the beautiful game, at least from a commercial perspective, lies with the likes of China and Russia, increasingly dominant powers boasting large populations with cash to burn.

20 years ago the idea that any of the above states would be in a position to hold an event as important as the World Cup would have been laughable. Russia was a teetering power in the last throes of communism; South Africa, then still living under apartheid, was excluded from most international sporting meets. But Beijing's hosting of the 2008 Olympic Games set a precedent and illustrated that so-called developing countries were as good if not better hosts than their Western counterparts. Even the 2010 World Cup in South Africa, considered a massive gamble by the Western media in the run-up to the tournament, passed largely without incident and has been recognised as a success.

The extent to which these countries stand to benefit from hosting events of this scale is another question entirely. The cost of putting on such a spectacle is not to be scoffed at and Russia has itself forecast that the cost of holding the 2018 World Cup will be in the tens of billions. Such a financial burden can have long-lasting repercussions: Greece's ill-advised hosting of the 2004 Athens Olympic Games left the country with a reported $7.4 billion bill, which no doubt contributed to the country's sovereign debt crisis earlier this year.

The cost of the World Cup to South Africa has been smaller, relatively speaking. Accounting firm Grant Thornton has estimated the cost at about $7.3 billion, about 1.4 per cent of the country's GDP. In return, Africa's richest state is estimated to have earned about $717 million in gate receipts, while the number of visitors to South Africa during the four weeks of the tournament was shown to have increased by 23 per cent year-on-year. There are also other less tangible benefits: it is hoped the positive image of South Africa generated by the tournament has created future travellers to the country out of the several hundred million viewers of the matches.

However when the final sums from last summer are totted up, South Africa's footballing experiment is likely to have produced a considerable financial loss. At the very least it will fall some way short of FIFA's gain from the tournament which is estimated at a cool $2 billion profit ($3.2 billion in revenues minus $1 billion in costs). Organisers of the tournament will argue that the World Cup boosted the South African economy by around 0.4 per cent; however, when one considers that much of this increase is likely to have come from government investment in the form of stadia and transport links, the real wealth generated by the event actually amounts to rather little. Improvements to some rural road and rail services notwithstanding, the lasting physical legacy of South Africa 2010 will be an expensive collection of football venues, most of which are unlikely to be used to their full capacity again.

But such short-sightedness has not stopped FIFA from looking to football's emerging markets to pick up the World Cup baton. The uncertainty surrounding the economic future of the West means that the decision to award the 2018 or 2022 tournaments to the sport's powerhouses such as Spain, Portugal, England or even the US may well have proved financial folly given that these countries are currently struggling under mountains of public debt. Much wiser to offer it to Russia or Qatar who, if nothing else, have the financial clout to ensure the event goes ahead, whatever the cost.

England's vision of itself as the spiritual home of football will keep future generations battling to host the World Cup. Will it ever return - who knows? But in this age of fiscal austerity, the question is: do we need it?

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