World Cup’s Duration, International Draw Make Event Economically Worthwhile for Host Cities

JohnWallStreet
·5 min read

The economic impact that major sporting events have on host cities is often the subject of debate. For every economist who believes the Super Bowl and Final Four are economically meaningful to cities, another will say the net benefits of playing host are inflated or at best, negligible. Victor Matheson (professor of economics, Holy Cross) explained, “If you have [an] event that people will travel to, [there is] some potential impact (i.e. new spending in the city as a result of the event). But the impact is smaller than one might guess and way smaller than the leagues or other boosters try to tell the public.”

That’s not the case with the World Cup, though–even as FIFA controls nearly all commercial rights tied to the quadrennial tournament. “Because of the long nature of the event and the ability to accommodate lots of tourists, [a city] realistically could be looking at hundreds of millions in new spending due to foreign tourism during a World Cup,” Matheson said. The Boston Consulting Group estimated each of the 10 U.S. host cities would achieve $480 million in net benefits from the event, on par with the “more than $5 billionfigure projected from within in the North American bid. Those figures may be conservative. Greater Orlando Sports Commission CEO Jason Siegel said an investment (think: security, transportation) of “$40 to $50 million [into WC26] could earn [the Florida city] a return of $600 to $800 million,” while Houston 2026 World Cup Bid Committee president Chris Canetti pegged the potential impact of hosting games in Space City to be north of one billion dollars. For comparison purposes, the 2017 Super Bowl was credited with generating $347 million in net economic impact in Houston.

Our Take: As Matheson noted, there are several macro points that distinguish hosting the World Cup from even the biggest of U.S. sporting events. The duration of the competition is certainly one of them. The Super Bowl “is one game on Sunday with approximately six to seven days’ worth of related events leading up to it,” Canetti reminded. By contrast, World Cup cities will play host to between five and six matches and have events lined up daily for a month. “[Being a World Cup host city] is akin to having six Super Bowls in the market over the course of just a few weeks,” the Houston executive explained.

World Cup cities, which are expected to be announced in Q4 2021, will also be hosting a number of events in the years leading up to the tournament (think: Road to ’26 campaign, international friendlies)—including FIFA’s still “test” event in 2025 (a major soccer competition that remains TBD). Those are lucrative opportunities for host cities that don’t exist around other major sporting events.

The demographics of those attending the World Cup is another differentiating factor. As John Kristick (executive director, United Bid Committee for Canada, Mexico and the USA) explained, “The amount of visitors from different parts of the world coming into these cities [represents] incremental spend, as opposed to displacement [often attributed to domestic events that tend to draw more of a local crowd].” Siegel agreed, adding that all of their research and data “shows international travelers stay longer and spend more money [than domestic fans]. Our theme parks see a bump when we have that international visitation.” It should be noted that 2026 will be the largest World Cup field ever (48 teams vs. 32 teams in the current version). That means groups from 16 additional countries will be coming to see their teams play.

The 2026 World Cup is also different from past editions (and recent Super Bowls played in Minneapolis and Atlanta, which were only held after new stadiums were constructed) in that the U.S. bid was based on certainty. The strategy from the beginning was to exclude any stadiums that did not already exist—thus enabling it to avoid the white elephant issue many mega-event host nations face. Matheson said with none of the venues requiring significant modifications to host World Cup games, the cost for prospective U.S. cities to host is “potentially low” (thus increasing the possibility the event has a positive economic impact).

At one point, more than 50 American cities expressed interest in hosting WC26 games, seemingly speaking to the value of the event as an economic driver. If there was any skepticism about generating a return on investment, it is hard to imagine so many cities would clamor to host the World Cup. Seventeen U.S. candidates remain today (for 10 spots).

Economic impact aside, World Cup games can provide longer-term benefits to a host city. “[Orlando is] the fourth most traveled to city in the United States for international travelers. So, the ability to market our destination [to potential tourists around the globe] and the promotion that will come with being a host city is extremely important to our community,” Siegel said.

In addition to growing its tourism business, Houston—currently the fourth-largest in America—wants to continue building its name on the global stage and believes the prestigious sporting event can further those ambitions. “Hosting the World Cup in your city helps with international exposure and branding. Each match has an average television audience of 190 million worldwide. To put that in perspective, the Super Bowl this year had [96.4] million,” Canetti said.

The World Cup can also leave behind legacy programs that benefit underserved local communities within a host city.

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