The World Cup is widely regarded as the most prestigious trophy that can be won in the sport of football and has existed in various formats since 1930. Over time it has grown to be arguably a bigger event than the Olympic Games and in terms of viewership it reaches billions of fans around the globe; the 2014 FIFA World Cup reached an audience of 3.2 billion viewers from 219 countries as well as over 1 Billion viewers for the final alone.
The current format includes a qualification phase which takes place during the 3 years prior to the final tournament where 32 teams will compete. The confederations of all six FIFA continental zones (Europe, South America, North America, Asia, Africa and Oceania) have a set number of teams that may proceed to the final competition and they must manage their qualification processes to determine the teams the qualified teams.
This format is set to change as of 2026, where an unprecedented 48 teams will participate in the final event. This means smaller nations have a significantly increased opportunity to participate in the landmark event and prospective host nations should expect to spend more in order to host a larger competition.
The final tournament takes place over the course of a month in a nation pre-determined through FIFA’s bidding process. Any nation bidding for the right to host the FIFA World Cup must comply with FIFA’s requirements for the tournament, and will also be expected to host the FIFA Confederations Cup one year prior to the FIFA World Cup.
These changes will have important and significant economic impacts on the nations which will be selected to host the World Cup.
From a macroeconomic view, the expansion of the FIFA World Cup is likely to increase revenue generated for the economies of the host countries and cause greater financial benefit to all parties involved. FIFA estimates that the expansion of the World Cup will increase revenue by $1 billion as well as a $640 million increase in overall profits. These increases will largely be caused by the larger revenues to be made through sponsorships and broadcasting rights due to the greater number of teams participating making for a greater potential audience.
Growing the number of teams from 32 to 48 allows for a more diverse selection of competing teams with teams who would not normally qualify in the current format being allowed to participate in the final tournament. More teams means more matches which leads to more viewers for sponsors to reach. This causes a higher level of competition among corporations to sponsor the events as they fight for the attention of the billions of fans and they will be willing to pay greater sums of money for sponsorships and broadcasting rights than ever before.
Other factors that should be taken into consideration include the fact that many of the national teams that stand to benefit from the expansion come from nations that have very large economies. Out of the top 10 largest economies in the world, China, India and Canada all have a bigger chance than ever before to participate at the football showcase in 2026, and of the top 10 fastest growing economies as of 2016, nations such as Iraq and Senegal are also likely to make their way to the World Cup after the expansion. This demonstrates that a World Cup expansion will open the door for corporations to reach an unprecedented number of consumers by associating with an event that has a fervent fan base all around the world.
Furthermore, the potential of growing the sport in countries where it is not especially popular cannot be understated. If the level of interest in the game can be increased in places such as Canada or China by involving their national teams more regularly in the FIFA World Cup – whether as hosts or simply participants – new fans will be made and a football/soccer culture can be formed. Such an opportunity will grow the World Cup in size and importance which will have a significant impact on the financial aspect of hosting and participating in the World Cup which will grow progressively over time.
Benefits to the Host
The FIFA World Cup brings with a multitude of benefits to the host nation, some of which are difficult to quantify. Easily quantifiable benefits would be the percentage by which sales have increased for local businesses in the food, tourism, travel and entertainment industry. Other factors, such as the long-term benefit of an improved public transportation system, the benefit of an improved sporting infrastructure, and also the increased knowledge and experience of local officials who will be more capable of running successful, large scale events in the future.
All of these factors grow in impact on the host nation and all other involved parties with a World Cup that involves 16 more teams. This means 368 more players, plus the coaching staffs and football association delegations of 16 more national teams, as well as the media crews and incoming fans of the new teams. Everything increases in terms of scale with the expansion.
In terms of economic impact of past events, it depends very much on the actual host nation whether the impact was positive or negative. For example, the 2006 FIFA World Cup in Germany was very positive according to Wolfgang Schäuble who was the German interior minister at the time. The 2006 World Cup reportedly caused an influx of 300 million Euros into the German economy as well as 2 billion euros in retail sales and created 50 000 jobs over 4 weeks.
At the same time, the 2014 FIFA World Cup in Brazil did not enjoy the same level of success as the 2006 event. The Brazilian government spent $13 billion to finance the event expecting this investment to yield revenues from tourism of $90 billion over the following 10 years, though figures have shown that tourism had actually decreased from 2013 – 2014 with the Brazilian Airline Association posting a decrease of 11-15% in air traffic. Job creation fell to its lowest levels since 1998 while prices across the nation increased with the inflation rate approaching 6.5% during the World Cup.
A major issue with the expansion is that the growth of the competition in terms of scale requires more developed infrastructure, such as transit systems, hotels, food, as well as stadiums and training venues for the teams. There will be more games played over the course of the tournament which means that the host nation will need to have or build more high capacity stadiums if the World Cup is to remain a 1-month long event and not longer. Already developed nations such as Germany and France needed to invest approximately $1 billion on infrastructure as part of their own World Cup bids in 1998 and 2006 despite the fact that they already have an expansive infrastructure and are no strangers to hosting large scale events. For underdeveloped nations, this figure would be much higher as they would need to start building the infrastructure from the ground up. It is estimated that for the 2010 FIFA World Cup, the South African government spent over $5 billion – a very significant amount of money which is very difficult to rationalize for a single event when such nations could be spending that money on healthcare, education and other basic needs.
It can be said, then, that an expanded World Cup will certainly require greater investment from host nations while also creating a greater return on that investment for the various parties involved. The larger sum of money needed to host means that there will be a shift where the only nations able to benefit from the increased economic impact of hosting the World Cup will be fully developed, western nations and nations with authoritative governments which can spend the enormous amounts of money needed without needing the support of their population. Another development to expect would be a larger number of joint bids with multiple smaller nations sharing the financial burden of hosting the expanded World Cup and sharing the economic benefit, since it will be much more difficult for smaller economies to support the level of investment needed to compete with larger nations.
In summary, a fulfillment of demand for greater representation of international teams, an increased level of competition for sponsorships and broadcasting rights yielding higher sums of funding than ever before, an opportunity for sponsors and broadcasters to break into large and growing economies around that world that would have been challenging to reach in previous editions of the tournament, and overall, a larger event that will require hosts with stronger economies due to the larger commitments than previously.
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