$13.5 Billion Later, Did the World Cup Help or Hurt Brazil?

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Written by Chris Herman, Editorial Intern

In the months and weeks leading up to Brazil’s 2014 World Cup, the country’s ability to host the games successfully was questioned by many in Brazil and around the world as preparations were met with a myriad of problems. But despite the mass protests, the over-budget stadiums, and the broken promises of infrastructure development, the 2014 World Cup succeeded in captivating fans in what appeared to be a surprisingly smooth tournament. Now that the teams and fans have returned home, Brazilians are still wondering whether it was really worth it.

A close examination of where the tournament’s estimated $13.5 billion was spent and what was gained from it demonstrates that it probably was not.

The money spent on constructing or improving stadiums for the Cup in 12 host cities seems to have raised the most eyebrows about Brazil’s public investment. On stadium construction alone, Brazil spent $3.6 billion, making it the single largest expenditure. The new stadiums are also the investment with the least long-term sustainability, as there currently exists little, if any, demand for world-class football arenas in most of the communities in which they were built. FiveThrityEight took an in depth look at the costs and benefits of the new stadiums in regards to their expected usage over the next four years. The average construction cost per spectator across all stadiums is estimated to be about $1000, with some stadiums vastly exceeding that number. The stadium in Manaus could cost as much as $150,050 per spectator over the next four years. If these projections hold true, it would make Brazil’s stadiums the most expensive of any World Cup, as well as the ones with the lowest overall return on investment.

Perhaps more concerning than the stadiums was the missed opportunity to make vast improvements to the country’s struggling urban and intercity infrastructure. When the World Cup was still in its planning stages, the Brazilian government promised a number of infrastructure development projects that were met with excitement by the Brazilians. However, as the Cup drew nearer, more and more of these projects were dropped from the list, and many of the ones that were not dropped have yet to be finished. Of particular concern is the fact that the projects prioritized in final preparation for the games are likely the projects that are most disconnected from Brazil’s long-term needs. The $2.6 billion spent on upgrading Brazil’s major airports will likely be far less useful to the average Brazilian than the long list of bus and rail projects that were either cancelled or remain unfinished.

All things considered, even if the tournament cannot be truly profitable, is the long-term outlook of its legacy really as negative as it seems? Perhaps it is too early to say definitively. Maybe the new stadiums will foster more matches and increased spectatorship in their communities, maybe the government will one day complete the unfinished infrastructure projects, and maybe the country will see a positive trend in tourism and foreign investment resulting from the Cup. However, that is an awful lot of “maybe” for a $13.5 billion investment. It is difficult to argue with the fact that even if Brazil were somehow to see some general long-term benefits from the games, $13.5 billion could have been maximized if it had been invested in projects that were targeted at Brazil’s realistic needs. Meanwhile, the government’s underperformance at completing its stated goals and promises while in the global spotlight have cost it a lot of credibility among Brazilians, and may also leave a bad taste in the mouths of prospective foreign investors.

Successfully hosting sporting mega-events, much like playing sport, requires skillful preparation and execution, and with the 2016 Olympics in Rio just around the corner, Brazil will need to step up its game to avoid making the same mistakes twice.

Photo: Gabriel Smith (cc).