Sports

South Africa's World Cup Hangover

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The L.A. Times declares South Africa "the nation" is the World Cup's biggest winner, praising the tournament's "vibrancy and enthusiasm, and its ebullient African style." Certainly, South Africa put on a good show, and proved wrong the critics who chastised FIFA for awarding the tournament to a country many feared couldn't provide adequate security or logistical support.

But South Africa's ability to pull it all together for six weeks doesn't mean the World Cup will be a net benefit to the country in the long term. As the ESPN video below explains, South Africa's government spent $6 billion on the tournament. Tournament-related revenues are expected to fall well short of that figure. Some of the hundred million dollar stadiums built for the tournament won't get much use now that the games are over. The video points to one stadium built for the tournament which will likely remain vacant—it sits over over slums that lack running water.

Fond memories of the month South Africa performed marvelously on the world stage are nice. But $6 billion is a lot to pay for a memory. These spectacles—the World Cup and the Olympics—are nearly always money losers. They're a lousy investment in wealthy countries. They're particularly garish in countries that aren't as affluent. Economist Robert Baade ends the video with a strained search for a scenario where South Africa benefits from hosting the tournament in the long run. He doesn't sound hopeful.

(Reason.tv on stadium welfare here.)

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  1. They should spend more money to attract NFL franchises to South Africa. “Look, new stadiums!”

    1. Look, I might have to move my team. I just got a great offer from Pretoria, and if your town can’t pony up the cash to get me a new stadium with 650 luxury boxes that I get all the revenue from…

  2. But South Africa’s ability to pull it all together for six weeks doesn’t mean the World Cup will be a net benefit to the country in the long term. As the ESPN video below explains, South Africa’s government spent $6 billion on the tournament.

    Major sporting events, becoming saddling boondoggles for the host countries?

    I am shocked! SHOCKED!

  3. “Some of the hundred million dollar stadiums built for the tournament won’t get much use now that the games are over.”

    They should lobby for an Olympic bid.
    /snark

  4. Fifa always makes plenty of money out of them.
    Did Germany in 2006? Their stadiums probably didn’t need much work on them and I think that they mostly get filled in their domestic league games.
    For some strange reason if England gets it in 2018 we will build 50,000 seat stadiums in places like Plymouth where the local team plays in the third tier of league football and doesn’t get musch support at all.

  5. You’d think that vuvuzela sales revenues would make up for all of the shortfall.

    1. If they could have somehow taken advantage of all that wind power…think of the green jobs!

  6. …one stadium built for the tournament which will likely remain vacant?it sits over over slums that lack running water.

    I don’t think it will be vacant for long.

  7. The funny thing is, according to Keynesian halfwits, building multimillion dollar stadiums just for the hell of it is perfectly fine.

    1. Don’t say that too loud or Paul Krugman will be recommending that all American cities build multimillion dollar soccer stadiums to boost the economy.

      1. As long as they’re built with private money, that’s fine with me.

        Of course, even if they are built solely from private funds, there’s always something public paying for the investment in terms of domain transfers, new or upgraded roads, highway exits, subway stops/lines, tax forgiveness, etc. They just can’t help themselves.

        1. From wikipedia, that is what happened with Atlanta 1996. The AOC spent $1.8 billion on facilities and etc and made a $10 million profit.

          Government’s (primarily Atlanta and Georgia) spent $500 million on roads and airport upgrades and Centennial Park and security. The City of Atlanta got a big chunk of it back thru street vendor licensing.

      2. Interestingly enough, virtually all of the football stadiums (the type that are big enough to make FIFA happy) that have been built in the last 15 years or so were also built so that soccer fields could easily fit in and with soccer sightlines in mind.

        In fact, we have way more than the minimum number already in existence, which the bid committee made sure they emphasized like crazy.

        1. DC United seems to play in RFK Stadium, the former Redskin stadium, without any problems, other than filling the seats.

          1. DC United tried and failed to get funding from DC for a soccer-only stadium. DC wasn’t willing to bite on that after the fiasco that is the baseball stadium.

          2. RFK is a shithole. It’s falling apart.

  8. The U.S. hosted in 1994 and is STILL living off the proceeds (at least the USSF is – they got fantastically rich off the tournament to the point where they have become [one of] the richest soccer federation in the world).

    That said, it’s likely that the host cities didn’t get much if anything out of it and 1994 was an anomaly in many ways. On the other hand, I wouldn’t be shocked if Germany actually made money.

    1. I think a huge difference here (and in the future if we land ’18 or ’22) is that the infrastructure is already there (and was in ’94) and the U.S. government would NOT be overseeing it – the USSF would.

  9. does the analysis take into account longer term variables like a rise in tourism AFTER the tournament. Not saying it would make up the difference, but certainly there are more elements to consider than strictly income received during the 6 week event.

    1. There’s a tourist fetish for abandoned athletic fields?

      1. Shantytowns and rape are in this year.

  10. They should lobby for an Olympic bid.

    Your wish, et c.

    As Dickie Smothers would say, VIOLA!

  11. These spectacles?the World Cup and the Olympics?are nearly always money losers.

    Atlanta ’96 wasnt, IIRC. In fact, it pissed off the OOC so much that they wont allow the same type of minimal government support anymore for an olympic bid.

  12. But $6 billion is a lot to pay for a memory

    We spend that much a day on toilet paper.

  13. How much of that $6 billion is lost and how much of it is just money being shuffled around?

    1. How much of the money that was lost isn’t reflected in that $6 billion? I find it easier to believe that South Africa would overstate, rather than understate, its losses.

      1. Arggh. reversed the over/under.

    2. I found a billion on the streets of Pretoria last night. Should I hand it in to the cops and wait for a reward or keep it?

  14. How else do you funnel millions of taxpayer/debt holder dollars to your well connected buddies and hangers on?

  15. For those who fondly remember firejoemorgan, Hat Guy weighs in with all kinds of stupid…

    http://nbcsports.msnbc.com/id/38195273/ns/sports-world_cup/

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