Good morning from New Economy Brief.
It's World Cup Final week. Maybe you’re mourning last night’s England defeat, or still worrying how you'll fill your time after Sunday's final. Maybe you're looking forward to catching up on some sleep after staying up until 5am to watch Austria v Jordan. Maybe you're hoping your favourite weekly economics newsletter will just leave football well alone.
No such luck, New Economy Brief is here to pick apart the world's biggest sporting event. And let's be clear on just how massive this year's competition is. 48 teams, three countries, 16 stadiums, 104 matches, 39 days. Over this tournament cycle (the four years leading up to a tournament), FIFA is predicting it'll make $13bn in revenue, compared to "just" $5.24bn from the 2024 Paris Olympics. More than a billion people are likely to tune into the final on Sunday, and 4.6m fans have attended matches so far.
This week, we take a dive into the numbers behind the sporting colossus. And, leaving the competition to one side, ask who are World Cup’s economic winners and losers?
World Cup-onomics
The Costs. While Qatar spent an eye-watering $220bn hosting the 2022 tournament (the most expensive sporting event in history), this year's World Cup will set the US, Canada and Mexico back a much more reasonable $13.9bn. Three main costs make up this number. First, hosts must provide at least 12 stadiums, each capable of hosting 40,000 fans. For comparison, England has just 10 such stadiums. Second, general infrastructure for tourists, transport, accommodation, and so on. Third, the costs of actually running the event, including housing and transporting players and their entourages.
The benefits. Helpfully, FIFA puts together a socio-economic report which estimates the World Cup will contribute $41bn to global GDP, with the US alone in line for a $17bn boost through spending at hotels, restaurants, bars and shops. FIFA also expects more than 800,000 extra jobs created globally. In the UK, pubs are praying England's run continues, with the extra revenue propping up an ailing hospitality sector.
The World Cup losers
Host nations. Host cities invest a huge amount in making the tournament happen. However, despite the impressive headline estimates, research from American academic Victor Matheson questions whether hosts actually see these benefits. He argues FIFA's estimates don't account for the "crowding out" effect (people who'd otherwise have visited but stay away to avoid the football crowds) and understate how much would have been spent on hospitality anyway. The data backs this up: a Canadian payments company found restaurant and bar spending in Toronto only marginally higher than last year once you account for inflation.
Workers. While some local businesses, particularly those near stadiums, can expect to benefit, workers won't necessarily share in the windfall. Bosses are unlikely to raise wages during the World Cup, any benefits will probably be temporary, and minimum-wage workers in the US report that visiting fans tip less generously than locals normally would. It's also always worth remembering the enormous exploitation of migrant workers behind the 2022 Qatar World Cup, with huge numbers injured or killed during stadium construction.
Taxpayers. Ultimately, the cost of hosting a World Cup lands on the public purse. Stadiums, transport, extra security – these largely come from tax receipts, and the financial risk sits with the host country, not FIFA. And with ticket prices reaching more than $10,000, many local residents who paid to put on the tournament will find themselves excluded from proceedings. One stark example: Brazil spent roughly $11.6bn in 2014 on stadiums, transport and airport upgrades, but as it raced to meet the deadline, promised mass transit improvements were sidelined in favour of finishing stadiums. Brazil was left with stadiums of limited long-term value, from funds that could have been better spent elsewhere, and little wider infrastructure improvement. Unsurprisingly, Brazilians took to the streets in the hundreds of thousands to protest the World Cup-induced austerity imposed on education and healthcare budgets.
The environment. The World Cup always takes an environmental toll, but 2026 is on track to be the "most polluting ever", with emissions nearly twice as high as usual around 9m tons of CO2e. That's partly down to the expansion to 48 teams, and partly the spread across Canada, Mexico and the US, with few alternatives to flying between venues.
The winners
It's coming home (if your home is Switzerland). There's one clear economic winner: FIFA. The 2026 cycle is expected to bring in $13bn, including $3.9bn from broadcasting rights, $3bn from ticketing and hospitality and $2.8bn from sponsorships, all tax-free thanks to longstanding exemptions. FIFA claims that as a non-profit it reinvests much of this into the sport, but, but its balance sheet shows an ever-expanding pot of reserves. Meanwhile, CEO Gianni Infantino's annual bonus increased from $2m to $3m last year for total pay of $6m.
Also Cabo Verde. Which is set to enjoy a tourism spike after a mega world cup run. So while the expanded tournament has been highly controversial (as have FIFA’s plans to explore an even bigger 64-team format in 2030), it does provide a platform for smaller countries to perform a bit of David-and-Goliath magic that captures the world’s attention.
The policy bit. That doesn't mean we can't make it work a bit better. Matheson suggests the cost, limited benefit, and social and environmental downsides can be mitigated. He argues the World Cup should focus on countries with existing infrastructure, keeping financial outlays down. Further, while this year's continent-spanning format may be a step too far, the move towards multi-country hosting may help spread risk for taxpayers and bring in smaller countries. Finally, the Overseas Development Institute points to the ‘elitism’ reinforced by the current flows in World Cup revenues - a more equitable distribution would help host nations with costs and avoid them bearing all the risks.
And for all its flaws, the World Cup has still brought joy to fans around the world (you didn't think we'd be a downer for the whole newsletter, did you?) It is a near-unique moment of global connection, bringing together billions of people. It brings pride, excitement and community to host countries, and a sense of unity that runs against the grain of current political and social divisions. Ultimately, it makes people happy. As Professor Michael Edwards puts it, it could be "a valuable shared experience, without being a successful economic-development strategy." For all the claims of football being about the money, in the end it might really be about the football.
Cleaning up Politics. New research from Autonomy has found that the share of political donations from those giving £1m or more has risen 35x in under a decade, from around 1% in 2015 to over a third in 2024. The report recommends capping donations at £20,000, closing the “giver and taker” loophole, banning public contracts for companies that donate to the governing party, and ending second jobs for MPs.
Calling time on trickle-down. Writing for LabourList, Tom Lloyd Goodwin of the Centre for Local Economies sets out a ten-point plan for the incoming prime minister to bolster “good growth” by providing homes, work, transport and tackling the cost of essentials through community wealth-building.
Taking back control of rents. The UCL Institute for Innovation and Public Purpose and Rosa Luxemburg Foundation have published a new report on helping England's private renters by regulating rents. They argue that neither new houses nor increased subsidies can address the unaffordability of the private rented sector. Instead, introducing European-style rent controls would address spiralling housing benefit spending, rising homelessness and entrenched poverty and inequality, while the risks involved are manageable and worth taking.
High Pay Centre. With the sad news last week that the High Pay Centre will be shutting its doors after holding the mega-wealthy to account for 15 years, Polly Toynbee has written a fitting tribute to their consistently high-quality research and campaigning. She points to how losing the funding once provided by the Abrdn Financial Fairness Trust has undermined the sector’s financial sustainability alongside a broader ‘anti-DEI and ESG’ sentiment from the corporate world. The High Pay Centre’s final report, due soon, will show CEO pay at its highest, and the gap with median workers at its widest.
