Seattle mayor says hosting World Cup should break even, after not looking at actual costs of hosting World Cup

Yesterday’s Seattle Times headline “Hosting 2026 World Cup would cost Seattle millions, but almost all money would be recovered, city says” was bound to catch my eye, especially given that several North American cities had already dropped out of consideration after complaining that FIFA’s demands were too steep. So how does Mayor Jenny Durkan get to a break-even estimate for hosting the World Cup?

Providing stadium security and police escorts, arranging practice fields, holding fan festivals and covering permit fees would eat up about $7.7 million for three games and about $10.5 million for five games, say the projections by Mayor Jenny Durkan’s office…

The memo says FIFA would reimburse Seattle for the stadium, police and field costs. That expectation would appear to clash with World Cup 2026 bidding guidelines released last year, which said FIFA would ask the host governments to take responsibility for security costs.

Um, yeah, seriously. Durkan’s office implied that she received assurances directly from FIFA that security costs would be covered somehow, but didn’t provide specifics beyond saying that “the mayor has knowledge of a range of very complex contracts and projects.”

Okay, so what about the pair of 20,000-seat open-air venues for World Cup watch parties that FIFA is demanding? The Durkan memo says that FIFA would allow the city to charge for admission and collect sponsorship money to cover these costs, which, maybe?

And what about the big holdup for cities like Chicago and Minneapolis, which was that FIFA was looking for a full exemption on sales taxes, ticket taxes, and the like on all its activities and that of its contractors for the entire run-up to the 2026 World Cup?

Seattle’s memo doesn’t account for potential costs related to security liability and tax breaks.

In short, it looks like Mayor Durkan’s office didn’t actually conduct a study of costs of hosting the World Cup; it merely conducted a study of costs of holding a big event like the World Cup (“These projections are preliminary and not based on information given to us by FIFA or US Soccer Federation, but rather by reviewing similar historic events using institutional knowledge and estimates for stadium game day operations”) and left it at that.

So the reassuring headline shouldn’t be very reassuring, and Seattle residents should still be concerned about being left holding a large bill for hosting the World Cup. And since Seattle, with possibly the best large stadium in North America for hosting soccer, is uniquely well equipped to be a host city, the other 22 cities on the list should still be afraid, be very afraid.


5 comments on “Seattle mayor says hosting World Cup should break even, after not looking at actual costs of hosting World Cup

  1. “…the other 22 cities on the list should still be afraid, be very afraid.”

    Of what? Winning the bid?

  2. “Seattle’s memo doesn’t account for potential costs related to security liability and tax breaks. FIFA expects host governments to assume liability for security incidents and to grant certain tax and labor-law exemptions.

    Liability costs would be shared by the city with local partners and the federal government, Mirabella said.”

    Yeah, unfortunately for FIFA, Seattle’s city government sides with labor groups in nearly all instances and a presumption that Olympia will do anything to specifically help a Seattle event is rather optimistic given historical norms. “X did a flip-flop on labor laws they once passed to support corrupt FIFA and Seattle” are all-too-expected attack ads.

    The city of Seattle also had, in the past year, an audit about police overtime costs and how much they were charging events. The historical norm is that recovery of overtime costs isn’t great and, while sports do better that free speech events, we still don’t actually achieve recovery (and her FIFA numbers are optimistic).

    www.capitolhillseattle.com/2018/04/auditor-says-spd-should-charge-events-like-capitol-hill-block-party-more-for-policing/

    “Meanwhile, the city spent $2.6 million policing outside Mariners, Reign, Seahawks, Storm, and Sounders games. The difference — besides the extra $1 million — for sportsball? Around 60% of the sporting event policing costs were reimbursed under deals between the professional teams and the Seattle Police Department.”

  3. Perhaps Minneapolis had a good argument but Chicago never ever made a serious effort to bid. Refusing to bid was used as PR move by free spending Mayor .

  4. Having the World Cup seems like a fun and interesting thing to have and it should be considered by a city that way. A couple games in the middle of the summer in a tourist city are not going to cause a massive additional influx of tourists, major economic development, or change the way of life for city residents. I’ve been to a few games and its a good time, but World Cups don’t do anything long term.

    It is a unique opportunity and an internationally-recognized event that doesn’t come around every couple years, so maybe on those grounds it could be “worth it.” It will bring some people from around the country or around the world to a city, and will get the city on TV, so there might be some benefit there as well. But it is a luxury item, not a core need.

    Seems like a smarter way to go about it is to price out the “worst case scenario” and make a decision on those grounds. If Seattle can truly afford to pay 10 million in salaries and taxes for an acknowledged luxury, that’s a decision people can justly make. Making a decision on a foolishly drawn out set of assumptions strikes me as the worst kind of public policy.

    But at the same time the event falls in the time frame when Chicago has numerous (tax-paying) festivals downtown that bring (tax paying) tourists, so maybe losing a sure thing for something objectively worse may not be a good idea.