International sporting events have long been a great source of entertainment and inspiration for the millions of fans around the world. While the spotlight goes to the best teams and their most valuable players, the economic impact of international sports events is not often given its place in the podium.
For many people, this is always a big question: Despite the fact that hosting international sporting competitions cost millions to billions of dollars, why are countries still willing to take in this responsibility? Most importantly, why do hundreds of member countries spend and invest in these events in the first place? The answer lies in how it directly affects the national and global economy.
The FIFA World Cup, for instance, has brought a significant impact not only on the economy of its host country but it has also made its economic presence felt on a global scale. This is because, hosting sports events like the World Cup can easily ensure inflows of foreign capital, directly generating local employment and promoting tourism.
Opportunities for employment and a boost for other industries such as banking, hospitality, and construction to name a few, are some of the many aspects that can eventually encourage and reinvigorate the confidence for investments.
While most major sporting events take place in relatively large countries like the US, Brazil, China, and Russia, there are smaller jurisdictions that host athletic spectacles that may be lower in profile but equally global in scale. The 2017 America’s Cup, for example, took place in the British Overseas Territory of Bermuda (home to major offshore investment institutions like LOM Financial). The 2022 World Cup, meanwhile, is expected to be hosted for the first time by the small GCC nation of Qatar.
Although hosts invest billions of dollars to provide the proper infrastructure to support events like these, analysts have always been positive of a generous return of investment. Russia, the host for 2018’s World Cup, for instance, expects $31 billion economic impacts, according to its organizers.