Hosting World Cup will help us conquer the last frontier
By Adrian Musolino, 15 Jul 2010 Adrian Musolino is a Roar Expert
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Australia's Brett Holman, center, celebrates with fellow team members Harry Kewell, left, and Mark Bresciano, right, after scoring a goal during the World Cup Group D soccer match between Ghana and Australia at Royal Bafokeng Stadium in Rustenburg, South Africa, on Saturday, June 19, 2010. (AP Photo/Marcio Jose Sanchez)
Australian football’s date with destiny looms large on the horizon now that the 2010 World Cup is over. On 2 December, FIFA announces the hosts for the 2018 and 2022 tournaments. Should Australia land the 2022 World Cup, it’ll be a game changer for the sport in this country.
Forgetting the inevitable and enormous wave of patriotic fervor and party atmosphere that would accompany us hosting teams and fans from 31 countries around the world (just ask South Africans what that’s like), there would be a huge economic benefit.
According to the business information research and analysis group IBISWorld, a World Cup on our shores will result in $35.56 billion of spending across our economy, compared to the estimated $9.1 billion of spending during the Sydney 2000 Olympics.
Not a bad return for the $11.37m of taxpayer-funded money being spent to bid.
According to Simon Hill of Fox Sports, “South Africa welcomed nearly 400,000 visitors during the World Cup – in total, the tournament’s contribution to the nation’s GDP was 93 billion rand ($14 billion) – enough to add half a percentage point to its annual growth (estimated to be three per cent this year).”
And unlike the 2000 Sydney Olympics, those benefits, economic and otherwise, will be spread across the country, from Adelaide to Townsville.
But the benefits will be more intrinsic to Australia’s sporting prowess leading into and following the World Cup.
For the FFA, it will provide the chance to create a 12-year blueprint to drastically alter the structure of the game, invest in youth development and solidify the structures around the A-League and state leagues, with the ultimate goal of being in a position to follow the example of Uruguay, Italy, Germany, Argentina, England and France and win a World Cup at home. In fact, the number of countries to win at home should act as even more of a spur to use this opportunity to invest in the possibility of winning a World Cup.
If you want proof of the unifying power of sport and the difference an investment in hosting major events can make, look to the new world champions, Spain, with decades of regional divide being replaced by the united celebration of their sporting successes.
So often the underachiever, Spain is now, arguably, the number one sporting nation on the planet.
In addition to their European and World Cup football titles (not to mention Barcelona’s recent success at club level), Spain is champions in basketball (winners of the 2006 FIBA World Championship’s and silver medalists from the 2008 Beijing Olympics), tennis’ Davis Cup, and silver medalists in men’s field hockey – successes in arguably four of the most global sports.
Rafael Nadal is the world number one in tennis and rattling off Grand Slams; Alberto Contador is set to claim his third consecutive Tour de France; Pau Gasol has established himself as a key ingredient in the Los Angeles Lakers’ NBA dynasty; Fernando Alonso has won two Formula 1 championships this past decade and could have had more; and Jorge Lorenzo is well on his way to the MotoGP title.
Spain is reaping the rewards of the huge investment and spending that went into the 1992 Barcelona Olympics, in terms of facilities, infrastructure and youth development (several government and corporate funded scholarships, etc). It’s also the inevitable result of increased interest in sport from youngsters and their parents that comes with hosting such a major sporting event.
Following their World Cup victory, Spain has conquered the final (and most difficult) sporting frontier.
The expression “last frontier”, used so fervently by Craig Foster (who else?) and others, is fitting in Australia’s case.
Australia has conquered so many of the sporting world’s frontiers; from numerous Olympic disciplines, the America’s Cup, rugby World Cup, hockey World Cup, Davis Cup, Formula 1 and motorbike world championships, etc, etc.
And even in those frontiers that remain elusive, in the far reaches of the sporting world, Australians are close to conquering them or increasing in competitiveness – think the Tour de France, American motorsports, basketball and more.
But the football World Cup is the one that counts the most and will be the most difficult to win for a country hamstrung by its stunted history.
It won’t be easy.
Look at Holland; a nation that revolutionised how the game was played in the 1970s and has been lauded for its youth academies, which have produced an endless stream of talent, yet has never won a World Cup.
Stephen Samuelson, sports editor of smh.com.au, recently wrote a controversial piece summed up best by its title: “AFL is a dead-end sport that hinders us on global stage.”
While I disagree with his dismissal of the importance of the AFL to Australian society and culture, he is right to suggest there is more to gain in terms of Australia’s international reputation and prowess by producing the next Tim Cahill, Mark Webber, Cadel Evans and co, rather than channeling funds and focusing only on our domestic codes and producing their next crop of stars.
Hosting a World Cup will help provide that impetus and investment for football in Australia; a goal to work towards in developing the game so the Socceroos are in a position to challenge for the World Cup come 2022.
And as IBISWorld, South Africa and Spain have proved, football won’t be the only winner.
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AndrewMc said | July 15th 2010 @ 1:56am | Report comment
Hosting the world cup will be a great thing for all Australians. Let’s put aside this code war (hey, we all forget that you are allowed to support more than one sport) and get out there and support Australia!!!
Kurt said | July 15th 2010 @ 2:40am | Report comment
A few weeks ago I vowed to remain silent on the WC bid and will endeavour to stick to that vow, although wish to make a few more general points about the supposed economic benefits of such major events. Specifically how they are always dependent upon the most rubbery of assumptions and creative accounting techniques and are essentially rejected out of hand by all serious academic economists.
The IBIS report is a classic case. It talks about this spending as if it will materialise out of thin air if we win the bid without discussing once where the money will come from. The answer is simple – from other parts of the economy. If we spend $2 billion on new stadia then that’s $2 billion less the government has to spend somewhere else, be it on roads, hospitals, schools whatever. And if consumer spending on new TVs and soccer shirts is up then by definition spending elsewhere in the economy is down; alternately the additional spending is funded through reduced savings or increased debt, both of which have further negative effects. Ah, but what about all those overseas visitors you ask? The IBIS report forecasts 500,000 WC visitors but inbound visitor numbers to Australia are already approx 450,000 per month, a large number of whom will choose NOT to visit Australia during the WC. So unless you calculate the net impact upon visitor numbers the figure of 500,000 visitors spending $9000 each is utterly meaningless in terms of assessing the overall economic impact.
I understand that many of you will simply dismiss these points as part of a broader AFL-led conspiracy to undermine the bid, so in closing I would simply say that if this is a topic that genuinely interests you please do your own research of the literature and see what those without a vested interest are saying. To quote a recent report published by the IMF:
“There is relatively little objective evidence on the economic impact of the Olympic Games and other mega sporting events. Much of the existing evidence has been developed by the host cities or regions—which have a vested interest in justifying the large expenditures on such events—and suffers from a number of flaws.
Estimates of the economic impact of such events derived from published academic research offer more reliable evidence, both because the authors have no personal interest in the economic success of the events and because the peer review process provides an important check on the methods and assumptions used. These studies present the following picture of the economic impact of hosting the Olympic Games: although a modest number of jobs may be created as a result of hosting the games, there appears to be no detectable effect on income, suggesting that existing workers do not benefit (Hagn and Maennig, 2009; and Matheson, 2009). Moreover, the impact of hosting the games depends on the overall labor market response to the new jobs created by the games and might not be positive (Humphreys and Zimbalist, 2008). The economic impact of hosting the World Cup appears, if anything, to be even smaller (Hagn and Maennig, 2008 and 2009)”
Joel said | July 15th 2010 @ 9:25am | Report comment
Precisely, people throw these numbers around without understanding what they mean, and assume it’s all profit materializing out of thin air when it’s really just money stolen from other parts of the economy or the future economy. While South Africa has experienced a short term bump in their economy as a result of all the spending, the true cost will be revealed with slower economic growth in the future, as the debt is paid down and that investment fails to produce anything for the economy.
I sent a query to IBISWorld asking what those numbers actually meant in light of the doubtful economic value of the Sydney Olympics, which they highlight with $9 billion spending, and this was their response:
“What IBISWorld does not forecast is whether the 2022 FIFA World Cup would result in a profit or loss for Australia. IBISWorld’s forecasts pertain to the impact that Australia staging the event would have on spending – not on profit/loss.”
James Karklins | Marketing Manager
IBISWorld Pty Ltd
So really, this report means nothing, and if this event is consistent with what happened with the Olympics would hurt our economy.
Farqwar said | July 15th 2010 @ 9:40am | Report comment
Do you live in Sydney Joel? Because trust me, Sydney grew after the Olympics, sadly the NSW government used the profits from the growth to butter it’s own bread instead of investing in the kind of public infrastructure that a truly global city needed.
Joel said | July 15th 2010 @ 12:11pm | Report comment
I don’t think so.
Quote from first link: “Sydney Olympics generated a net consumption loss of approximately $2.1 billion.”
Ouch! So, that means if the same trend follows for the World Cup, it could lose a staggering $8.4 billion dollars!
JamesP said | July 15th 2010 @ 5:31pm | Report comment
I dare say that Victoria has been growing faster than Sydney for the better part of this decade, not just economically, but also Melbourne is closing the population gap to Sydney rapidly
Michael C said | July 15th 2010 @ 12:55pm | Report comment
exactly right -
displacement of regular tourism and regular spend is not NEW benefit.
It is incorrect to look in isolation at the 4-6 wks of the tournament and claim all that is ‘additional’ to the economy when a large amount is displacement of regular activity.
The ‘spend’…….an awful lot of public funds that would be spent anyway. In South AFrica – their dilemma now is to prove that all these stadia aren’t economic white elephants. That improved transit links focussed on sports tourist movements can be a major benefit moving forward. What now for the 30,000 or more of the building workers who are now back ‘on the streets’?? Selling wolves nipples at the next ‘big game’??
RSA had forecast nearer to 500,000 tourists and by around April had had to downgrade forecasts by about 100,000 – - and they seemingly hit around that 400,000 mark. How much of the missed 100,000 were the forecast ‘cream’ to the financial benefits??? At that time it was reported that the expected benefit to the economy had be halved.
Heck – even on ticketing – - towards the end there was some ‘panic’ discounting to try to fill stadiums – - how much of the ticketing ‘profit’ was eaten away compared to optimistic forecasts before the event.
I’m not knocking the idea of hosting a FIFA WC – - it’d be interesting, but, let’s avoid a lot of the inflated numbers hyperbole.
Let’s realise that the big numbers trumpeted about possible benefit…….probably should be at least halved!!!!
Michael C said | July 15th 2010 @ 3:26pm | Report comment
btw –
part of the model for determining real economic ‘benefit’ as distinct to merely redispersing funds that would be spent otherwise – - is around how much money might be drawn out of ‘savings’ to be spent by the event.
If people simply redivert their regular sports/entertainment spend – - then, it’s not new or additional. Now, if it’s money diverted from ciggies and beer – - again, the beneficial impact can be debated (although the moral impact starts looking better!!). So – - basically, we have to forfeit our savings!!!
That, and hope and pray that airfares are affordable and there’s no global downturn or major security scares that chop in half projections for tourism.
btw – I saw a graph on one website showing the massive German 2006 tourism, vs about 1/3 of that for RSA 2010 (in the shadow of global downturn), and half again of that for Korea/Japan (in the shadow of 9/11).
So – - – any projections for Australia……please keep it real and let’s not here anybody citing Germany 2006 (smack in the middle of soccer centric Europe with perhaps the best array of major soccer stadia in the world) as any example of what Australia could expect.
Roger said | July 16th 2010 @ 4:55pm | Report comment
Kurt – so essentially your argument is that because we don’t know the exact economic impact of such an event, it will almost certainly be a loss, and therefore we shouldn’t host it.
Does that about sum it up?
Please enlighten me if I have summarised your argument incorrectly.
Also, whilst you might be correct in assuming that there will be less visitors in addition to the WC crowd, it can’t be denied that there will be significant additional tourists and visitors (with a significant amount of spending money) during a short burst during the WC.
Kurt said | July 16th 2010 @ 11:17pm | Report comment
Roger
My point is that there is no empirical evidence to support the contention that mega-events such as the World Cup bring the economic benefits that are claimed in advance. I make no broader claims about whether or not we should host the event, and accept that there may be non-economic arguments for hosting – e.g. – feel good factor, national pride etc. As I made it clear in my post I was specifically addressing those claimed economic benefits.
Regarding visitor numbers, again my point is not that there will be no additional visitors during the WC, but rather that in order to calculate the net impact of visitors you need to factor in both those that come because of the event and those that don’t come for the same reason. You can’t just say 500,000 WC visitors each spending $9000 equals $4.5 billion spending and leave it at that. To understand the economic impact of the event you then need to subtract the spending that won’t be done by those who would have come if the event was not being held. The end result will still most probably be a positive result, but far less than the claimed initial figure.
Hope this is clear enough.
Roger said | July 17th 2010 @ 7:40am | Report comment
Thanks for clarifying.
In regards to additional visitor numbers, it would presumedly be quite easy to calculate by comparing the total number of visitors for the month of the WC, and perhaps a month either side to include those tourists who have specifically avoided the WC and those who arrived early, and compare the figures to the same 3 months in previous years.
Surely someone has done this? Seems like a fairly straight forward figure to calculate.
rugbyfuture said | July 15th 2010 @ 3:04am | Report comment
one thing i pointed out to my father whilst watching the world cup was that if australia was to host the world cup, every other country in the world (with the exception of new zealand) will have to be the ones getting up at four thirty in the morning to watch the games, considering much of the revenue comes from tv rights, it doesnt bide well for the bid.
AndrewMc said | July 15th 2010 @ 3:45am | Report comment
‘every other country in the world’
75% of the world population is in Asia!
Davstar said | July 15th 2010 @ 9:19am | Report comment
True
I actually thing the time Zone difference will workto our advantage more people will come to watch the world cup livei n Australia. Like the Tennies in the Summer!
Tom said | July 15th 2010 @ 9:32am | Report comment
Yeah, its curious how so much focus is given to the European TV audience, when the Asian TV audience would surely be equally as large.
True Tah said | July 15th 2010 @ 9:33am | Report comment
Might have something to do with the fact that the European TV audience pays a lot more than the Asian TV audience.
Ben of Phnom Penh said | July 15th 2010 @ 7:22pm | Report comment
significantly less of an issue when 2022 rolls around
Chuq said | July 15th 2010 @ 6:54pm | Report comment
Exactly.
Here are the countries with the top ten cumulative television audiences for the 2006 World Cup:
1. China – 4.0 billion
2. Nigeria – 1.9 billion
3. Brazil – 1.7 billion
4. Germany – 1.1 billion
5. Japan – 1.0 billion
6. Indonesia – 860 million
7. Vietnam – 781 million
8. Argentina – 730 million
9. Egypt – 705 million
10. Italy – 622 million
And for comparison, what time matches in Australia (including NZ for comparisons sake) would be in other parts of the world:
http://spreadsheets.google.com/ccc?key=0As6HF3nD8aSIdDdCbTdzU3AxaWRETnhHYnBSNnp1Wnc&hl=en&authkey=CNC_0rAN
ItsCalledFootball said | July 15th 2010 @ 10:00am | Report comment
rugbyfuture,
its the other way around – the 2002 WC was played in Japan/Korea and was a huge success.
Europe is about 5-8 hours behind us during our winter, their summer (daylight saving) so a 7:30PM WC final in Sydney would be shown in Europe between 11:30AM and 2:30PM.
Roger said | July 15th 2010 @ 3:29pm | Report comment
That’s exactly right.
In fact, part of the Australian bid would presumadly be to ensure that games are shown at a decent time in Europe, meaning the games would have to be scheduled in the evening here.
rugbyfuture said | July 15th 2010 @ 6:55pm | Report comment
i stand corrected in that case, but as with rugby the power base is still in europe
ItsCalledFootball said | July 15th 2010 @ 11:29pm | Report comment
Fair enough rugbyfuture and rugby does have a big future in world sport and is growing at a very good rate too.
However, the biggest audience for FIFA World Cups is actually Asia which is only 2 – 5 hours behind Sydney and that goes well for our bid in 2022.
Kurt said | July 15th 2010 @ 3:06am | Report comment
For those who can cope with the jargon, you might want to start your readings with the following paper written by two German economists in the wake of the 2006 WC: http://college.holycross.edu/RePEc/spe/HagnMaennig_WorldCup.pdf
It can be heavy going for those without any econometric background (plus it’s been translated from highly technical German), but here are a few quotable quotes to give you an idea of their conclusions:
“The results demonstrate that in none of the respective match venues did the effect of the sporting event on unemployment differ significantly from zero.”
“Baade and Matheson (2004) investigated in a multiple analysis ex post the effect on the income of people in the match venues of the soccer World Cup of 1994 in the USA. They concluded that income developed in an equally weak fashion in 9 of the 13 regions of the contest. Overall, the soccer World Cup had a negative effect on the income of the match venue of more than US$9 billion.”
“Szymanski (2002) collected data on the twenty largest economies in terms of current GDP over the past thirty years, many of which have hosted the Olympic Games or the soccer World Cup at least once during that period. Using a simple regression model, he came to the conclusion that the growth of these countries was significantly lower in soccer World Cup years.”
“The majority of these studies suggest that the sporting events or sports stadia have little or no significant effect on regional wages, income and/or employment. A number of works, particularly those of Coates and Humphreys or Teigland (1999), have even arrived at significant negative effects. To our knowledge, only very few studies have found significant posi- tive effects of sports facilities and sports events ex post.”
Aka said | July 15th 2010 @ 8:13am | Report comment
You probably could have balanced your comment with this from the report
‘Even if the effects on the jobs market turn out to be small, other economic values need
detailed consideration, before these results can lead to the inference that, from an economic
perspective, major sports events are inefficient overall. Especially effects such as
the feelgood effect benefit for the population and/ or image effects – although difficult
to quantify –may be sufficiently important to justify major sporting events and/or the
provision of subsidies for them from public funds.’
It seems you haven’t heeded their advice.
Kurt said | July 15th 2010 @ 8:35am | Report comment
Aka
I’m glad you read the paper and raised this issue. Essentially what the authors are saying is that there are non financial, non quantifiable benefits to hosting such events. I accept that completely, though don’t personally think that it warrants the cost. So let’s at least be honest then and state that soccer fans like the idea of a four week long party paid for out of the public purse and not make any more unsustainable claims about economic benefits.
Luke W said | July 15th 2010 @ 8:57am | Report comment
Football fans have a vote and pay their taxes too…
Farqwar said | July 15th 2010 @ 9:27am | Report comment
I wouldn’t say that promoting your country, engaging with the world, instilling pride in your citizens has no economic benefit, infact it is the very basis of civilisation.
When we built the opera house we could have built one a lot cheaper but it wouldn’t have left us with the icon we have today. The value of the Australian image is incalculable and hosting the world has enormous benefits, no matter what your figures point out.
If you want to stop the `World Cup bid on the grounds that it is a waste of money then we need to take it all the way, withdraw all funding for Olympic and international sport, all government buildings should be as cheap as possible, all tourism advertising and national promotions must be stopped etc, etc.
It’s a ludicrous assumption that you take up simply because you prefer AFL. What I really would like to know is if the roles were reversed between football and AFL would you seriously oppose the AFL world cup?
st penguin said | July 15th 2010 @ 9:40am | Report comment
Kurt, I dont follow your argument.
You originally quoted an IMF report that said there was relatively little objective evidence on whether there’s an economic benefit to “mega events”.
Then you find a paper that supports your theory and say “let’s at least be honest then and state that soccer fans like the idea of a four week long party paid for out of the public purse and not make any more unsustainable claims about economic benefits”
Surely the conclusion of your limited (and admittedly much more extensive than my own!) research is that there is no conclusive evidence either way.
Baz35 said | July 15th 2010 @ 10:09am | Report comment
Point is all studies either suggest ambiguity at best and significant loss at worst. The “research” by rent a chart mobs are all art no science.
st penguin said | July 15th 2010 @ 5:48pm | Report comment
No Baz, the point is that there hasnt been enough independent research.
And even then, as with all economic studies, it depends on what variables you choose to include.
Baz35 said | July 15th 2010 @ 11:54pm | Report comment
Nah sorry St Penguin, you clearly know not what you are talking about!
There has been a host of published and peer reviewed economic research that all points to negligible or negative impacts of major sporting events. It always depends on assumptions on various matters and even published work is contested but the bottom line is journal published work needs to be peer reviewed by specialists in that area and the assumptions need to be clearly justified and results caveated
What “variables you choose to include” and what “assumptions” you choose to make matters when private sector consultants or even public agencies spit out ridiculous figures where the full details of how it is arrived at – assumptions, model structure etc – are not provided.
st penguin said | July 16th 2010 @ 12:27pm | Report comment
C’mon Baz, comments like “you dont know what you are talking about” are best left to the playground.
I fully agree that private sector consultants will distort figures to get to the desired outcome. I dont think anyone has argued against.
My point is that the IMF, which has spent a lot more time and effort researching this area has pointed to the lack of independent research in this area.
And just because a paper is peer reviewed doesnt give me a lot of comfort. You should should see some of the rubbish papers my friends have produced and still got them published!
Kurt said | July 15th 2010 @ 9:27pm | Report comment
Like I said, I encourage people to do their own research. If someone can find a peer-reviewed, serious piece of economic research that shows the claimed benefits from mega-sporting events are real then I look forward to reading it.
Roger said | July 16th 2010 @ 5:27pm | Report comment
The whole premise of your argument is flawed Kurt.
You claim that because there is no evidence to prove that there are significant economic benefits to holding a mega sports event, we shouldn’t hold the World Cup.
However, there is also no data showing that it DOESN’T. Every article I have read regarding this issue has stated that there is essentially a dearth of evidence either way.
There could be a significant positive economic impact, it’s just that it’s difficult to measure, and that’s because there are so many variables.
How about you show us a peer reviewed article PROVING that it doesn’t have any significant economic benefit. That’d be good actually, because I don’t think that it exists.
Kurt said | July 17th 2010 @ 4:54am | Report comment
Roger
Your statement of my position is incorrect. In his article Adrian lists some claimed economic & financial benefits of hosting the world cup. I have argued that there is no evidence to support these claims and as such the argument is flawed and unproven. That’s it.
If I wrote an article entitled “World Cup will bankrupt Australia and lead to economic collapse” then I would be obliged to present evidence in support of this contention. However I’m not arguing that, I’m simply saying that the economic arguments presented in favour of mega events such as the Olympics and WC are flawed and lack support amongst serious economists.
If others want to argue that we should host the WC because it will be a brilliant party and will help Australian soccer then fine, go ahead, make that argument. Just don’t claim non-existent, unsubstantiated economic benefits.
Roger said | July 17th 2010 @ 8:02am | Report comment
Well, the thing is, whether intentional or not, it kind of sounds like you’re saying that because the evidence is lacking, it’s incorrect to state that there would be any economic benefits. I don’t agree, especially when you consider both the direct and the indirect including the multiplier effect of every dollar spent.
Now, before you jump on me for mentioning the multiplier effect, I understand that calculating it is fraught with difficulty. However, just because the exact value is difficult to calculate doesn’t mean that it doesn’t exist.
Yes, the evidence base to support the economic benefits is poor, but this doesn’t mean we can dismiss any economic argument for hosting a WC.
st penguin said | July 17th 2010 @ 6:15pm | Report comment
If it makes you feel better Kurt, I did take the bait and started reading economics papers for the first time since uni.
Unfortunatley it reminded me why I didnt stick with economics – with so many differnt variables and the inability to conduct a controlled study it is virtually impossible to prove anything!
Australian Football said | July 17th 2010 @ 7:20pm | Report comment
Kurt, see link…..
http://www.germany-tourism.de/pdf/DZT_WM_Bilanz_Bro2008_Eng.pdf
I have done what you have asked and my independent research of the 2006 FIFA world cup shows it was a resounding success on all fronts.. Maybe now you can shut your trap up on the negatives and focus on the benefits of hosting the World Cup here in Australia.
_____
AF
Kurt said | July 20th 2010 @ 3:10am | Report comment
KB. Wow, that is a knock out blow. I present serious, peer reviewed papers by respected economists and you present a press release from the German tourism board. I guess that’s game set and match to you then.
Roger Rational said | July 15th 2010 @ 4:29am | Report comment
I thought everyone knew by now that these massive sporting events produce no positive effect for the economies of host nations whatsoever. Obviously no one told Adrian Musolino.
As for all the stuff about Spain, maybe their economy wouldn’t be up the creek if they’d invested more in infrastructure and education – their education system is absolutely terrible – and less in sport. I mean, it’s all very nice for the Spanish people to have the World Cup champions and so on, but I reckon the 40% of youth unemployed in Spain might prefer a job?
I think some people need to be reminded that sport is ultimately a trivial distraction. To listen to Foster and Musolino, you’d think that winning the rights to host the Cup would be on a par with curing cancer. Tone down the hyperbole, fellas.
Baz35 said | July 15th 2010 @ 9:30am | Report comment
Dead right Roger. You will not find peer reviewed economic research which supports the idea of significant economic gain from the world cup.
To repeat the IBIS world figure and then compare it misleadingly to the taxpayer subsidy (and wasn’t it 45 million and isn’t 11 million just the amount that has been given to the “consultants” to funnel to corrupt FIFA officials?) to me just plonks adrian in the same camp as all the other sub-professional soccer scribblers in this country who cannot think, let-a-lone write, objectively
All the evidence says the world cup, for a country like australia that has to build half the stadia, will result in a negative net benefit. There might be other “non-economic” benefits but I think these tend to be overstated and much of it is really just the manifestation of a lot of Australian’s inferiority complex. The same inferiority complex that shows no respect to the national game to the extent that simply by insisting on being no worse off the AFL is somehow out of line
st penguin said | July 15th 2010 @ 9:42am | Report comment
What evidence Baz? see Kurt’s comments above.
Baz35 said | July 15th 2010 @ 10:05am | Report comment
Just from a google search right now:
“There are theoretical reasons to believe that economic impact studies of large sporting events may overstate those events’ true impact. In addition, evidence suggests that in practice the ex ante estimates of economic benefits far exceed the ex post observed economic development of communities that host mega–sporting events or stadium construction.”
http://www.thesportjournal.org/article/upon-further-review-examination-sporting-event-economic-impact-studies
“A broad survey of the economics literature published in Econ Journal Watch in September last year found an overwhelming consensus that these economic benefits are either insignificant or totally non-existent. In fact, there’s stronger agreement among economists about the uselessness of mega events and sports subsidies than there is about the benefits of free trade or the need to eliminate farm subsidies.”
http://www.nationaltimes.com.au/opinion/politics/buying-our-love-with-our-money-is-just-not-sporting-20091226-lfn6.html
I hope that suffices dude, maybe you can come back and find just one, just one published economic journal article that supports the idea that countries successfully bidding for WCs will gain economically from it!
st penguin said | July 15th 2010 @ 1:30pm | Report comment
Sorry, didnt realise you had done a google search. My bad.
Ben of Phnom Penh said | July 15th 2010 @ 4:23pm | Report comment
Actually there are, however you need to concentrate on the appropriate use of social momentum that these projects generate.
The conclusion from Ferran Brunet i Cid of the Faculty of Economics and Business Science, Universitat Autònoma de Barcelona, in relation to the legacy of the Olympics over a 10 year period states:
“Thanks to the Olympic Games, Barcelona is now a different city. The organisation was optimum, fostering massive investment in infrastructure. Thanks to correct use of the Olympic Legacy, increased capital and improved attractiveness, the urban development process has continued long after 1992.”
http://olympicstudies.uab.es/b92/pdf/WP084_eng.pdf
Baz35 said | July 16th 2010 @ 12:03am | Report comment
Barcelona might be an exception.
Every other Olympics since?
Kurt said | July 16th 2010 @ 12:14am | Report comment
Interesting paper. The author talks about the ‘Barcelona model’ and specifically contrasts it with some of the other Olympic games before and since. So that’s the key question then – if you’re going to hold a mega-event, how do you do it in a way that harnesses the momentum to affect positive change. For a relatively under developed city in a country that was still some way behind the rest of Western Europe in a development sense (I’m talking of Barcelona and Spain in the early 90s) clearly there are different opportunities to say, Sydney in 2000.
Michael C said | July 16th 2010 @ 11:45am | Report comment
this is an important element.
Barcelona, and Seoul – - – were perhaps well placed to benefit,……especially at the time. Not all cities/nations are geared to take advantage of potential benefits.
It’s not a one size fits all.
Australia, would have to challenge itself to work out how to maximise benefits other than just hoping for extraordinary numbers of tourists.
Just factoring the ‘feel good factor’ isn’t good enough.
Because, Australia has prooven itself capable – - that’s not at issue. Australia is on the annual circuit for Grand Slam tennis and F1 GPs and MotoGps and other international and global ‘megasports’ – - so, there’s no issue there.
The world already recognises things like:
Melbourne named best sporting city in the world ahead of Doha and Berlin in SportBusiness Sports Event Management Awards from Nov 2009,
and
MELBOURNE AGAIN CROWNED SPORTING CAPITAL OF THE WORLD from April 2008,
Ignoring petty arguments – - the reality is, there’s sufficient global acknowledgement, sufficient currency in Australia’s ‘reputation’, – - – that there’s really not much to gain. Well, not now anyway,…….in 20 years time??, perhaps.
So – on this front, I’m a little torn. However, how much needs to be invested?? and are we better off using more fed funds for the ‘national interest’ in sustaining the F1GP in Melb, and Grand Slam tennis in Melb etc rather than leaving the individual states trying to usurp each other??
Ben of Phnom Penh said | July 16th 2010 @ 12:02pm | Report comment
here is another interesting paper looking at ‘Legacy Momentum’ which was commissioned by the London Assembly as they assessed the London 2012 bid. It looks at the legacy impact of the Barcelona, Atalanta, Sydney and Athens Olympics. Certainly the utilisation of legacy momentum varied from city to city however it does raise a number of interesting points.
Basically it agrees with Kurt and Michael C that the window of opportunity for change needs to be grasped fully in order to maximise the legacy impact of mega-events. Use it or lose it.
http://www.uel.ac.uk/londoneast/research/documents/lasting-legacy.pdf
Punter said | July 16th 2010 @ 5:30pm | Report comment
What does one know of Doha??? Probably puts into light the of Doha & Melbourne as the world’s sporting nation.
I was in a Irish bar in Rome in 2006, cup fever was alive, pub packed, watching 1st round of the WC, over 10 TVs in pub, 1 was showing the French open final, no-one was watching. Can’t compare WC with grand slam event.
apaway said | July 15th 2010 @ 2:58pm | Report comment
What national game are you referring to, Baz?
General Ashnak said | July 15th 2010 @ 3:04pm | Report comment
I think he is talking about Cricket…
mds1970 said | July 15th 2010 @ 6:14am | Report comment
The IBIS report is rubbery figures and dodgy accounting; classing expenditure and income together.
If I were to earn an income of $60,000 and spent $70,000 during a year, then I haven’t gained a benefit of $130,000, my financial position has deteriorated by $10,000. But IBIS is counting expenditure as income.
The biggest line item is $26 billion of construction spending, as if that is income. To the taxpayer, it is expenditure – additional tax money that the government will need to raise or cuts to government expenditure elsewhere.
So the taxpayer spends $26 billion, and $9 billion of economic activity is generated. Assuming that all of the $9 billion is received by Australian owned companies and none of it goes to FIFA or to any foreign owned companies, and assuming a company tax rate of 30%, the $9 billion will produce tax receipts of $2.7 billion.
The bottom line is that for the Australian government, the best case scenario – assuming no cost blowouts – is a $23.3 billion shortfall. Which we’re all going to have to pay extra taxes for to cover.
Luke W said | July 15th 2010 @ 9:12am | Report comment
What?!? Are you calculating the Government’s net loss on a potential investment? We don’t pay taxes so the Government can invest them and generate returns.
MVDave said | July 15th 2010 @ 7:13am | Report comment
How predictable…the AFL cheerleaders (Kurt, mds…no doubt there will be more for this thread) come out and say…you cant believe the independent report of IBIS…you’ve got to believe the reports that we pick! What a larf…get a life boys…the bids in and will be decided in Decmebr…you can whinge and moan as much as you like…you can ignore the reports backing the benfits of a WC untill you are blue in the face…but for each of your negatives there will be a positive. Got a great idea why dont you actually be positive and back the bid? Your code will survive…no need for the fear.
The WC will be the biggest sporting event ever to hit these shores…most of the money spent by the govt on infrastructure will go to…Aussie workers… wow…get on board boys the bandwagon is growing and ya dont want to be left barracking for the yanks?…or maybe ya do?
Kurt said | July 15th 2010 @ 7:49am | Report comment
Disappointing reply Dave but unfortunately not surprising. All I said was do your own research of the academic literature but I can see you’ve completely ignored the points I made.
However I’m still hopeful that behind your cheerleading you’re actually listening and doing some research yourself and learning what actual economists think about this issue. Remember, knowledge is not something to be afraid of – if you need any tips on academic search engines let me know and I’ll point you in the right direction.
Realfootball said | July 15th 2010 @ 8:36am | Report comment
Kurt
To have you accuse others of cheerleading is rich. Your posts on AFL threads reveal you as among the most committed of AFL supporters. As you correctly point out, the figures are open to interpretation. You have chosen an AFL supporter’s interpretation, but this is no more or no less valid than others.
I am not quite sure why you spend so much time on football threads. You rather patronisingly refer to “academic search engines”. Are you perhaps a bored Melbourne academic with a stagnating career and a chip on your shoulder?
Kurt said | July 15th 2010 @ 9:29pm | Report comment
Is there any other sort of academic career besides a stagnating one? Seriously though, I know it’s easy to dismiss these points on the basis that I’m an AFL fan. As such I’m encouraging people to do their own research of the literature and form their own conclusions. Also, if someone comes across some serious post-event research that shows the claimed economic benefits of a WC or Olympic games were actually realised then I’d like to read it.
MVDave said | July 15th 2010 @ 9:45pm | Report comment
“if someone comes across some serious post-event research that shows the claimed economic benefits of a WC or Olympic games were actually realised then I’d like to read it.” Err Ben of PP post above…Barcelona Olympics…very glowing summary.
Beast-A-Tron said | July 16th 2010 @ 5:28am | Report comment
No Real, it is not the “AFL supporter’s interpretation”, it is more or less the the Austrian interpretation.
http://en.wikipedia.org/wiki/Austrian_school
Damn I hate it when people discuss economics who clearly do not care/know what they are talking about.
Norm said | July 15th 2010 @ 1:06pm | Report comment
-”A few weeks ago I vowed to remain silent on the WC bid…” not quite the man of your word are you Kurt.
st penguin said | July 17th 2010 @ 6:12pm | Report comment
go easy Norm, we’ve all been there!
Roger said | July 16th 2010 @ 7:43pm | Report comment
Kurt…. wow. I’ve been following this thread for a number of days now, and something finally clicked about your ‘input’ in this thread.
“Remember, knowledge is not something to be afraid of – if you need any tips on academic search engines let me know and I’ll point you in the right direction.”
Thank you so much for offering to provide us with such wisdom, me and the other football fans here of lower socio-economic status, with low literacy and primarily blue collar occupations, feel honoured that you would be so generous as to enlighten us poor folk.
I also just finished reading my first book today, “Go spot go”, I enjoyed the pictures. The words were a bit big however.
Ok, so normally I don’t take this approach to highlight a pointl, however I think it’s justified. Whether intentional or not, you have made a number of disparaging remarks against “football fans” which seem to indicate that you think most of us are fairly uneducated.
Some other examples:
“However I’m still hopeful that behind your cheerleading you’re actually listening and doing some research yourself and learning what actual economists think about this issue”
“For those who can cope with the jargon”
“It can be heavy going for those without any econometric background”
“However I’m still hopeful that behind your cheerleading you’re actually listening and doing some research yourself and learning what actual economists think about this issue”
Seriously Kurt, get off your high horse. Please.
Kurt said | July 16th 2010 @ 11:29pm | Report comment
Roger
I make no comment about the education levels of soccer fans. Your responses above indicate you didn’t even take the time to read my posts, and jumped to immediate conclusions about the points I was trying to make. Take the time to re-read them and get back to me.
Now excuse me as I gallop away…
Roger said | July 16th 2010 @ 11:45pm | Report comment
Immediate conclusions? I have read all of your posts, and even looked up your references.
So…. what did you mean by “Remember, knowledge is not something to be afraid of” then? Because that kind of sounds a little bit condescending to me.
Please share what you meant, rather than jumping to conclusions about what I read.
JF said | July 15th 2010 @ 8:34am | Report comment
Everton Manager David Moyes on Australia’s World Cup bid,
”It’s important to have it here because I see too many rugby league, rugby union and Aussie rules teams. Soccer is the main game, let’s get the World Cup here and show them what it really means and what it’s like.”
True Tah said | July 15th 2010 @ 9:38am | Report comment
Thats a silly reason to have a world cup here, I dont think FIFA is too concerned about dominated a market of 21M people in an unfavourable timezone, where futbol is one of several top league professional sports.
If it was, they would be far more interested in encouraging the subcontinent to submit a world cup bid.
JF said | July 15th 2010 @ 11:34am | Report comment
I like the term “too many” as if we have exceeded the allowed quota set by an international concensus of football fans, I wonder what the limit of the quota is?
Redb said | July 15th 2010 @ 8:39am | Report comment
“rather than channeling funds and focusing only on our domestic codes and producing their next crop of stars.”
East German thinking there Adrian. Whilst were at it let’s pump some sterioids into our swimmers and athletes all for international sporting glory!
Why can’t soccer survive on it’s own?, why does it need to kill off the other football codes with government funding for its own goals. Why do you propose stopping funds to other codes for the benefit of your own.
Australia is a diverse country in a sporting sense, the zealouts like and Foster seek to narrow this country not grow it.
Countries with much larger populations where soccer is the uber sport are not guaranteed success (think most European countries). What makes you think Australia has any better shot?
You say you value AFL/Aussie Rules as part of Australian society and culture but would happily see the game deliberately starved of any Government funds and potentially sacrifice it to chase a pipe dream for your own sport
Your a selfish lot, this has nothing to do with the national good.
Stop trying to disguise your agenda!
If kids want to purse their dreams in any of the sport availabvale they should be allowed, the Governments role in a funding sense is to get kids playing sport, any sport, not worry about international sporting glory as if its the only defining part of Australia’s cultural identity.
Farqwar said | July 15th 2010 @ 9:12am | Report comment
Redb – everything you accuse football fans of being is exactly what you do in this post. Instead of being indifferent to the bid you are threatened by it and try to destroy it and if possible the code in Australia.
No-one is talking about destroying AFL/NRL, we are trying to organise a World Cup, all the codes will try and attract the highest level of their sport to the country, their is nothing evil or zealotry about this.
The reason the government will entertain the bid is because they are aware of the returns, they are doing their jobs. Do you seriously suggest the government stops funding all representitive sporting programs because it is selfish.
Redb said | July 15th 2010 @ 10:03am | Report comment
Perhaps you assume too much Farqwar, I never said one word about the bid.
jimbo said | July 15th 2010 @ 10:15am | Report comment
Exactly Farqwar,
the only code I can see trying seriously to kill off the other codes in this country is Aussie Rules.
A WC in Australia will NOT kill off the other codes, like the USA WC didn’t kill off the other American sports.
Most of the money goes into infrastructure and construction and security and you don’t have to follow football to make money out of a football WC.
There is plenty of competition to win the WC bids and every country who has bid knows the benefits.
Redb said | July 15th 2010 @ 10:41am | Report comment
My issues is with this:
“rather than channeling funds and focusing only on our domestic codes and producing their next crop of stars.”
Bidding for the World Cup is one thing, whether you buy or dont buy the economic argument is one thing, I’m ambivalent to its value, its not my point.
My point is then using the bid as Adrian alludes to drive soccer’s domination agenda.
To be clear: lets assume hosting the WC would be of massive economic benefit to Australia due to infrastructure and tourism, what difference will it make apart from a patriotic point of view whether Australia wins or is very competitive or not?
the same benefits will flow regardless.
Mega said | July 15th 2010 @ 10:45am | Report comment
It’s not saying “instead of” but “rather”. It’s a case of balancing across all codes. Let’s be honest, and this is coming from an AFL fan, the AFL doesn’t need government support if it can burn millions on poaching NRL stars. Soccer deserves all of our support with this bid.
Redb said | July 15th 2010 @ 10:49am | Report comment
Still not comprehending, I’m not arguing against the bid – get it?
Go back and read Adrian’s article, first he brings up th Samuelson article, talks about Socceroos success, then talks about funding…
I’ll leave you to draw your own conclusions as to the general direction.
Roger said | July 15th 2010 @ 2:17pm | Report comment
Well, you are arguing against financing the bid. And as financing is crucial to the success of the bid, one could say that you are striking at the very heart of the bid.
ItsCalledFootball said | July 16th 2010 @ 12:21am | Report comment
No,
holding a World Cup is the holy grail that every sport strives for – rugby league, rugby union, cricket, they all wanted Australia to host a WC and give our national team a better chance of winning it.
Do you really think that the WC bid is designed only to “drive soccer’s domination agenda”.
That seems like a very insecure and paranoid comment from a follower of the game he believes to be this country’s most dominant sporting code.
Baz35 said | July 15th 2010 @ 9:52am | Report comment
“rather than channeling funds and focusing only on our domestic codes and producing their next crop of stars.”
And the other thing is about this quote, (and maybe adrian can explain himself) is it is completely unclear what he means by channelling funds.
Is he referring to public funds and suggesting that this is what happened in the past?
Is he talking about “private funds” and the personal choices of individuals?
On the first count, no sport that I am aware of has drawn more from the public teet than soccer over the last decade and no sport has paid its own way more so than aussie rules. So Adrian I assume you are advocating the maintenance of the status quo where the AFL gets nothing and soccer gets some 9 figure some every decade?
On the second, perhaps this explains the position of soocer folk generally. Even the the AFL has paid for all these grouse stadiums, and will no doubt foot the bill for some of the stadiums built for a successful WC bid, it is right for the government to skew private capital towards soccer cos that is played by heaps of people in other countries and australian football isn’t
Both incredible positions. Perhaps best to leave it ambiguous so some of your more deluded readers will continue to believe the absurd idea that public funds have been “channelled” to the “domestic codes” rather than international sports in the past.
Soccer, along with the olympic sports, have long been the beneficiary of taxpayer largess purely based on the “international sporting success will bring us something tangible” thesis. It doesn’t align well with the idea that soccer has been held back by a Grand Conspiracy that includes government controlled by the AFL, but that is the reality
Farqwar said | July 15th 2010 @ 10:01am | Report comment
AFL and League would have had far more government financing than football. Football has sustained itself through the vast numbers of registered players, in more recent times the success of the national team has added to the coffers of the Football Federation.
Baz35 said | July 15th 2010 @ 10:22am | Report comment
Wrong. That is what you want to believe Farqwar. The opposite is true.
Michael C said | July 15th 2010 @ 8:47pm | Report comment
Farqwar -
no guess work – - actually provide some numbers.
Australian Football is sustained by….well, guess what, by attracting around 7 million attendees annually, by generating over 600,000 club members (of varying levels of cost and ticketed or not) plus being a valid and presentable TV option during the ratings period of the year (annually).
The FFA on the other hand recieved a tidy little $30 million boost from K.Rudd as part of his Kevin 07 platform – - funding direct to operational expenses because, the FFA is actually a govt construct – - Soccer Australia was dismantled by Govt and replaced, at the behest of the Govt funded 1992/93 Crawford report – - and so the Fed Govt is throwing in more money to protect its investment.
How’s it feel to be reliant on Govt largesse?? And still, the FFA talks of spending big money on foreign coaches (who was the last ‘foreign’ coach to guide a FIFA WC winner??) and the like when the FFA doesn’t have that money……oh, unless they further tighten the screws on junior registrations to pump as much money to the pointy end!!!! A nice very, very sharp pyramid scheme!!!!
Farqwar said | July 15th 2010 @ 9:56pm | Report comment
MC – lets forget the fact that the AFL is a state based competition with no national team, and you provide me with facts that football recieves more federal funding than the AFL.
Not so long ago people were happy to let football die, we couldn’t afford to buy plane tickets to let European based players play in important qualifiers, I can’t remember the government stepping in then. Different picture now though, the Aussie team is the highest rating national team in Australia and the team plays to huge crowds all over Australia. We have a genuine, internationally respected domestic competition and our registered player numbers go from strength to strength, so if this is all because of federal funding then they are doing a remarkable job.
If your point is that the 5 year old a-league isn’t as strong as the 100 year old AFL, then I concede to you on that one.
Michael C said | July 15th 2010 @ 11:12pm | Report comment
mate – who’s job is it to run a sporting code??
forget this rot about a 5 year old league vs a 100 year old league. The NSL was the first national league with about a 10 plus year head start and the strength of a huge extended ‘global family’.
The Socceroos generate some decent ratings, every 4 odd years when involved in the WC,…..the Asian cup not nearly so, and attendances…….some good, some bad. FOr how many games annually across how many markets?? re ratings – - don’t go pushing that Roy Morgan selective scope wise very limited phone poll that I think Jimbo often refers to – ‘cos he always gets his context wrong.
FOr significance to national sports – - the Socceroos is in the main an off shore abstract construct. They play irregularly at best in Australia and unlike the cricket team – - they in the main do not play domestically either at a club level or an identifiable ‘season’.
Huge crowds all over Australia……..please show evidence. Heck….Collingwood play to huge crowds all over Australia!!! And MORE regularly too.
ItsCalledFootball said | July 15th 2010 @ 10:29am | Report comment
redb,
surprised at your comment that football is trying to kill off other sports with government funding.
A football WC won’t kill off any other sport. Most of the money will go to construction companies and their employees and the security and services companies, not football fans – we will actually have to pay to be a part of it.
We all know how much government money other sports get – including your beloved Aussie Rules.
The second Crawford report said that sports should be funded based on participation rates – not TV ratings and that football (soccer) was severely underfunded per player and administrator.
AFL has large cash reserves and should have its government funding cut.
Michael C said | July 15th 2010 @ 9:49pm | Report comment
ahem -
and how much money Govt money goes to the AFL coffers??
aljay said | July 15th 2010 @ 11:34am | Report comment
Redb,
Before AFL supporters start accusing others of seeking to narrow sporting interests in this country, trying to kill off other football codes, selfishness or having a domination agenda they might want to take a long hard look at the conduct of their own sport.
Given your history of posts on this site, its probably best not to accuse others of having an agenda. Your keyboard might blow up from the hypocrisy.
Redb said | July 15th 2010 @ 11:56am | Report comment
Nice way to deflect the point. Debate the issue.
Roger said | July 15th 2010 @ 3:24pm | Report comment
Redb
“Your a selfish lot, this has nothing to do with the national good.”
Pot calling the kettle black? We could say the same for AFL, NRL, and any other code.
Also, I wish the football haters would get a life, and comment on your own code rather than feeling the need to put down another. Obviously there are a few of you who are very insecure about it all, and are afraid for your code’s future. Rightly so I might add.
Redb said | July 15th 2010 @ 3:32pm | Report comment
Roger,
Maybe you should read the article, the author has directly referenced the AFL and implied that funding be diverted from the domestic codes. I’d say that is fair to comment on.
Although, if you like you can have me arrested as a political prisoner for not sharing your Fosterish like view of the World games rightful place to dominate all.
Your bullying attempt is noted for its typical boorishness.
Roger said | July 15th 2010 @ 4:08pm | Report comment
What are you even talking about? What bullying? Political prisoner? What, like AFL/NRL are under attack?
I commented on you calling football supporters a sellfish lot by stating that all codes wish to protect their interests.
Perhaps you were referring to the AFL bullying of football?
And don’t presume to know what my view is of the world game, you don’t know me, and nor have I shared what my view is here. Maybe you shouldn’t jump to conclusions.
Tom said | July 15th 2010 @ 8:46am | Report comment
Australia should pull the pin now and stop wasting tax payees money. An Australian and new Zealand bid would be best
Roger said | July 15th 2010 @ 4:10pm | Report comment
Now that is actually not such a bad idea.
Chuq said | July 15th 2010 @ 7:11pm | Report comment
What an odd comment. Pulling the pin would *cause* the investment made so far to be a waste.