Fighting for the White Elephant: The Struggles of Being the World Cup’s Host Nation
- Eugene Zinchenko
- 2 days ago
- 6 min read
The World Cup is less than four months away, but several American host cities still doubt they will have enough financial resources to accommodate this sporting spectacle, as they estimate substantial monetary losses. Is the world's biggest sporting event economically beneficial for host nations, and if not, why do they keep fighting for it?
Background and The American Way
The World Cup is the world’s biggest sporting event. The tournament attracts a cumulative global audience of more than four billion viewers, with the final alone drawing over a billion. The 2026 World Cup will be the first one to feature the expanded 48-team format, up from 32 teams in 2022. The three host nations chosen for 2026 are the United States, Canada, and Mexico.
The United States will host 78 of the 104 total matches, with 11 host cities. The Federal Government promised to provide USD 625 million in funding to the host cities, yet these funds have yet to materialise. Due to the recent US government shutdown, all funding has been frozen, putting host cities in a precarious position. Furthermore, even the combined USD 875 million in funding will not be enough to cover all expenses. They will mostly be spent on security, and Andrew Giuliani, the Executive Director of the White House Task Force on the FIFA World Cup 2026, stated that these funds will be under extreme scrutiny. This leaves host cities having to cover local infrastructure, venue provision, and event operations. Some cities, such as Miami, have applied for additional funds totalling more than USD $70 million.
What distinguishes this World Cup is also its unique decentralised organisational structure. 11 US host cities have each separately signed so-called host agreements with FIFA. Host agreements outline which costs each side will assume. They also outline that legal and financial responsibility falls on the local leaders rather than the national government. The host agreement, apart from possible infrastructure renovation, obligates the host cities to provide free public transportation for ticketholders, security, and emergency services. In some cities, this led to tense negotiations, with some even trying to organise their own fan fests before matches without FIFA’s approval to recover some costs. In other areas, money designated for the World Cup has been redirected to other programs, such as the homelessness budget, as happened in Florida. Various city officials have already expressed concern about the budget deficit that will be left once the World Cup concludes.
Footing the Bill for Someone else’s meal
The host nations have an extremely difficult job of breaking even during World Cups because of the nature of their collaboration with FIFA. The 2022 World Cup generated 3 billion in broadcasting revenue, millions in ticket sales, and millions in merchandise sales worldwide. Yet the overwhelming majority of this revenue is not shared with host nations. FIFA, a Zurich-based non-profit organisation, receives the bulk of this revenue. Nations are not even allowed to tax FIFA on its earnings. It is explicitly part of the bidding process to host the World Cup. Countries have to promise FIFA tax breaks and grants, as was evident for the 2006 World Cup held in Germany. FIFA only pays football federations to cover some of the preparation costs and the prize money to participating nations, with the 2026 World Cup promising record payouts exceeding USD 727 million.
The host nations are thus expected to cover all operating expenses, such as security, restricting unauthorised commercial activity near venues, and transportation. FIFA makes it clear that nations know what they are signing up for. In 2014, this sparked widespread protests in Brazil. The local people opposed increased spending on the upcoming World Cup, while various public services remained underfunded. The President of FIFA at the time, Sepp Blatter, criticised the protesters for using the World Cup as a platform for their movement. A comment that was criticised by Brazilian’s, who argued that they were protesting not against the World Cup but against broader social and political grievances. The financial situation surrounding hosting costs has become so disadvantageous that many cities and even nations are now opting out of bidding altogether, a trend that could continue to grow.
There is an argument to be made that a spike in tourism and consumer spending will help offset the short-term costs the host nation incurs. In reality, this effect tends to be short-lived and unevenly distributed. Hospitality businesses, airlines, and some parts of the service industry can experience a temporary boom. Nevertheless, it rarely translates into sustained income growth or higher wages for service workers. It is a substitute rather than a contribution to sustained economic growth; for instance, regular tourists tend to avoid the host cities during the World Cup months due to congestion and price increases. In recent World Cups, visitor spending has typically accounted for only a fraction of total event costs, with the state recouping only a small portion of its expenditure through a marginal increase in tax revenue.
There are certain possible long-term financial benefits of hosting the World Cup that can justify the short-term economic losses. The infrastructure built and services provided for the World Cup create jobs and boost the country’s economy. Some analysts have argued that Russia experienced the highest recorded annual economic growth in over a decade in 2018 because of that. Infrastructure such as improved public transportation systems, new metro lines, or modified sporting facilities, when properly maintained, can be utilised long after the World Cup is over, improving the quality of life for local residents. In Germany 2006, transport and urban regeneration led to major rail upgrades, including Berlin Hauptbahnhof and airport expansions. Qatar constructed the Doha metro system, which is now heavily used.
Nevertheless, it is not always the case. In countries like South Africa or Russia, where demand for football is limited, several new stadiums have struggled to find regular use, incurring high maintenance costs and, in the best-case scenario, being used for other events like music concerts. The same applies to new hotels or tourist-oriented services that lack sufficient demand post-tournament. The USA is more likely to experience some of the long-term benefits, since, similarly to Germany, infrastructure already exists, and there is sufficient interest in sport, with football stadiums possibly having dual usage for other sports like the NFL. The USA already had experience hosting the World Cup in 1994, and although it was not economically profitable, the USA did not build any new stadiums; instead, it modernised existing ones, which are still in use to this day.
Beyond the Economics
If hosting the World Cup is such a financial strain for host nations and 12 of the 14 last World Cups have not been financially profitable, why do so many nations still compete so intensely for this privilege? There are even corruption allegations that countries like Qatar and Russia have been involved in alleged bribery arrangements with FIFA officials to ensure their selection as host nations.
For these countries, hosting the World Cup is not only about financial considerations. It is a way of projecting national soft power worldwide. For similar reasons, Saudi Arabia invests heavily in sponsoring clubs across Europe to create a favourable image abroad. For authoritarian states, it is especially important to convince outsiders and foreign investors that their country is safe for both tourists and capital. For South Africa, hosting the World Cup was important for showcasing its post-apartheid stability to the world and positioning itself as one of the continent's most developed economies. The 2018 World Cup allowed Putin to counter negative Western narratives following the annexation of Crimea and Russia’s involvement in eastern Ukraine. The 2022 World Cup positioned Qatar as a global Middle Eastern hub and accelerated diversification from hydrocarbons.
The 2034 World Cup was awarded to Saudi Arabia. Saudi Arabia has a widely criticised human rights record, being a member of the LGBTQ community is punishable by law in Saudi Arabia, and the nation was involved in various scandals, including the killing of an opposition journalist in Istanbul. A reasonable prediction is that the 2034 World Cup will not be financially profitable for Saudi Arabia, but this is not the only factor the Saudi royal family is considering. The World Cup, much like Saudi investment in football as a whole, will help the country to reshape global perceptions and give foreigners a sense of normalcy and safety. Saudi Arabia will seek greater legitimacy and trust, goals that are difficult to quantify on a balance sheet.
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