FIFA: The Ultimate Gold Digger
How the 2022 Qatar World Cup debacle is exposing FIFA’s recklessness
Passion, history, and global reach are just a few of the reasons why I love the sport of soccer. It’s the only sport that has a massive following on every continent in this planet. What I don’t love about soccer is FIFA, the nonprofit organization that is the most important governing body in the sport.
FIFA’s central responsibility is running the World Cup, which is the single most expensive sporting event in the world (ahead of even the Olympics). While we think the Super Bowl is a big deal in the US, it’s microscopic compared to the World Cup. The World Cup’s TV audience is roughly 7 times bigger and its budget is around 100 times greater. You could even argue that FIFA is more powerful than the United Nations. It’s not that bold of a claim — FIFA has more member nations and the ability to completely transform a country’s political and economic agenda through its World Cup selection process (Brazil’s over-budget World Cup is a perfect example of this). That power comes at a price.
Over the last few decades, FIFA has had more corruption allegations than the Indian government (that’s probably false, but you get the picture). However, their latest piece of work has outdone everything in the past. In December 2010, the 2022 World Cup was awarded to the small oil-rich nation of Qatar over the United States amidst major controversy. ESPN writer Bill Simmons summarized the decision best in a tweet,“Any time you can hold a World Cup in a hot Middle East country that’s smaller than Connecticut and has no soccer tradition, you have to do it.”
Almost two years since the controversy, FIFA maintains the 2022 World Cup will still take place in Qatar. However, the details of how exactly that will happen are more unclear than ever. For those who haven’t followed the Qatar train-wreck, let me give you a short recap:
- More expensive than the cost of the International Space Station: The 2014 World Cup in Brazil will cost roughly $13.5 billion dollars, making it the most expensive World Cup yet. Latest projections of the Qatar World Cup have it costing over $200 billion dollars. That is over 60 times more than the 2010 World Cup in South Africa cost.
- Finding Neverland: The city of Lusail, which will be hosting the 2022 World Cup Final…does not even exist yet. It’s literally a future city! According to Google Earth, this is what that city looks like now.
Oh by the way, the city will only take a cool $45 billion dollars to build over the next 9 years.
- Bring sunscreen: Recently, FIFA conceded that scheduling the World Cup in a desert during summer will be problematic because temperatures often reach over 120ºF (49ºC). In order to get around this, FIFA is proposing moving the World Cup to winter where it would compete with the NFL, NHL, NBA, Winter Olympics, and I almost forgot, every other professional soccer league in the world (where the World Cup players make their real salaries). This isn’t merely as simple as everyone moving their schedules around — do you think FOX paid $400 million to televise the World Cup in the winter (the most competitive time of year for sports)? A move like this would be unprecedented and take serious negotiation with sports-related stakeholders (like domestic leagues), business stakeholders (sponsors), and TV industries (some of which have already negotiated TV rights for the 2022 World Cup).
- Indentured servants!?: Building $200 billion dollars worth of stuff takes a lot of people. So, what has Qatar done? Shipped thousands of workers from countries like Nepal, India, and Sri Lanka and put them in “slave-like” conditions. In fact, over 90% of Qatar’s population is migrant workers. Just this summer, 44 migrant workers have died on World Cup construction sites. The International Trade Union Confederation estimates that at the current rate, over 4,000 migrant workers will die from work-related causes in the construction of World Cup stadiums and infrastructure in Qatar (yes, you read all of this correctly). No World Cup venue should come at the cost human life.
You may be wondering how on earth Qatar landing the World Cup in the first place. That’s a long story for another time but I will give you a big hint: It probably involved a lot of money changing hands.
But, the real culprit in all of this mess is FIFA. When they award a country with the right to host a World Cup, they make non-negotiable demands which the host country must meet. The most important one being that the country must have eight stadiums that hold more than 40,000 people each. So this means a country like Qatar, which domestic soccer teams average around 5,000 people per match must now have 8 stadiums over 40,000 people. Does this make economic sense to anybody? Brand new stadiums that are useful for one month and then lay vacant?
The larger issue is that host countries end up spending a large portion of their budget (i.e. tax dollars) on useless stadiums and not public infrastructure projects. Look at South Africa where multiple new, large stadiums in South Africa are bleeding money following the World Cup. The brand new Green Point stadium in Cape Town is operating at $4,2 million dollar loss annually resulting in talks about converting it into a housing development.
In Brazil, there have been riots as the public is growing uneasy with how all the World Cup budget has been spent on new, large stadiums, while many of the public infrastructure projects were put on hold. Brazilians don’t want the new $600 million dollar stadium in Brasilia that seats 80,000 people, they want health care, education, and better infrastructure. By the way, that new stadium in Brasilia opened last June and has hosted 57 Brazil State Championship matches which have attracted around 50,000 fans…TOTAL (that is less than 1,000 fans per game and 1.2% capacity!) Oh I almost forgot, while the Brazilian taxpayers are stuck with the astronomical World Cup bill, FIFA will take home a conservative estimate of four billion dollars. Therein lies the beauty of FIFA’s model, they collect most of the money from the sponsorship and TV deals while the host city is stuck with the stadiums and infrastructure costs. Ex-Brazilian star and now politician Romario said it best,“They come, set up the circus, they don’t spend anything and they take everything with them.”
Shouldn’t hosting the World Cup be more than building shiny, flashy new stadiums but actually contributing to a host country’s long term growth (especially if it’s a developing country)? This brings us back to the 2022 World Cup between the United States and Qatar. From a purely economic perspective, the United States was the more logical choice. It already has the stadiums and infrastructure to host a World Cup. But as we see in Brazil right now, FIFA has no interest in running a cost effective World Cup because they make money no matter what. Qatar, in fact, offered FIFA what it wanted: a blank checkbook.
So to conclude, we have a small country with no real population spending enormous sums of money on an unprofitable venture with exceedingly difficult logistical issues. If my economics degree taught me anything, this nightmare is just getting started.
Ravi roots for Arsenal and the #USMNT. He writes about a variety of sports/business topics which can be seen here. For comments/suggestions, e-mail him at: ravidev86@gmail.com
