Brazil’s World Cup spending could set record for least bang for buck

Last week I interviewed Holy Cross economist Victor Matheson for my article on why the World Cup is a massive money suck that doesn’t return measurable economic benefits; this weekend, Matheson himself has an article up at FiveThirtyEight analyzing which Cup-hosting nations are getting the worst back for their stadium buck, and the unfortunate champion is Brazil:

An initial estimate for Brazil shows a projected SUI [stadium use index, or pro-rated number of capacity crowds per year] that would be among the lowest of recent hosts, with stadiums in Brasília, Manaus, and Cuiabá among the least-used stadiums from any recent World Cup. This poor stadium usage, combined with the highest nominal stadium construction costs of any World Cup, leads to a projected record-high FCI [fan cost index] of over $1,000 of stadium construction costs per fan in attendance in four years.

But really, who can put a price on providing your richest, whitest citizens the ability to go watch international soccer?

The silver lining, Matheson notes, such as it is, is that Russia is already looking to spend $7 billion on stadiums for the 2018 World Cup, a number that will surely rise. And the 2022 Cup is currently scheduled for Qatar, where money (and human life) is no object. So Brazil could end up only holding the record for most money thrown down a hole for four years, or at least eight. Order those “Brazil Stadium Spending World Champions” commemorative t-shirts while you can!

7 comments on “Brazil’s World Cup spending could set record for least bang for buck

  1. Interesting work from Matheson. Just a question Neil, did you discuss what constituted “capacity” for the purpose of this analysis?

    I would certainly agree that holding an event that attracts 10,000 paying customers in a facility that can hold 60,000 is not legitimate usage… but if an event draws 45,000+ in the same facility, I think we can probably call that a reasonable use of that stadium (particularly if there isn’t another 40k+ seater nearby that could have accommodated same). Would this count in his “capacity” usage calculation?

  2. No, we didn’t discuss this research — I didn’t even know he was working on it. Agreed that it’s a little arbitrary, but it’s still an interesting metric.

  3. Not going to argue that Brazil over spent on their stadium. Won’t argue for a stadium in middle of Amazon. But these stadiums replaced privately built 100 year old death traps. This is Brazil, these stadiums will be well utilized for at least the next 50 plus years. Hey I think building a basketball court in the ghetto is a waste of tax money. Comparable dumb spin !

  4. Four of the stadiums didn’t get used beyond the first round, and there is the Manaus situation. They built a stadium that seats 40,000 people, but only 4,000 people go to domestic matches.

    Regardless, the real on the ground situation is this: There have been plenty of goals scored in this cup, but matches have been marred by horrible officiating and flopping. At the end of the day, Goldman Sachs has its money on Brazil and this means the tournament is likely rigged from start to finish.

  5. WOW, betting on a Brazil soccer team to win at Home ! What a leap of faith by Goldman Sachs.

  6. Steven: Why is it that soccer fans are unable to talk up their own game without denigrating others?