FIFA World Cup in Russia: a tremendous cost…
Russia - Sep 06 2018
The budget of the 2018 FIFA World Cup organized by Russia has evolved considerably. It was initially established at RUB 661.5 billion (currently EUR 9 billion), but following the economic crisis that happened there, the state voted a RUB 30 billion cut in June 2015. Finally, in 2017, to complete the budget, the organizing committee got two shots: RUB 19 billion in February and RUB 34.5 billion in October. As a result, a total cost of RUB 678 billion rubles, or EUR 9.2 billion (EUR 10 billion a few months ago but the RUB collapsed since then). More than 70 % of this budget is supported by the Russian state and Russian regions. In comparison, the budget of the 2006 FIFA World Cup in Germany amounted to “only” EUR 430 million!
The organization of the FIFA World Cups is much more expensive for emerging countries than for developed countries. Indeed, emerging countries have less infrastructure (stadiums, hotels, transport, etc.) and need to make significant investments to host such a competition. In addition, the construction of monumental stadiums is often pointed out as very expensive and not profitable ex post. Indeed, maintenance is very expensive, and these stadiums are rarely used later. We speak in these cases of white elephants, i.e., a possession entailing great expenses out of proportion to its usefulness or value to the owner. What is certain is that the budget of the FIFA World Cup to be held in Qatar in 2022 should be endowed with a huge budget, today estimated between EUR 13 and 15 billion.
Julien Moussavi, Head of Economic Research – Source: Beyond Ratings