North American cities can be cautiously optimistic about hosting 2026 World Cup

09 July 2018 Authored by Consulting.us

Owing to utilization of largely in-place infrastructure, North America’s hosting of the 2026 FIFA World Cup is expected to avoid the cost-overruns and financial boondoggles of some previous tournaments. A report from The Boston Consulting Group expects the tournament to generate about $5 billion in short term economic activity for the region.

Last month in Moscow, the United Bid of the US, Canada, and Mexico beat out frontrunner Morocco to secure hosting duties for the 2026 FIFA World Cup. With games likely split between 10 cities in the US, 3 in Canada, and 3 in Mexico, the 2026 edition of the incredibly popular soccer tournament will be the first one hosted between three countries. The 2026 tournament will also be the first in which 48 teams qualify for the tournament – hoping to avoid scenarios like this year, where teams like the US, Italy, and the Netherlands failed to qualify. More games also means more ticket money, more media dollars, and more merchandise purchases.

As such, 2026’s tournament requires even greater facility access than previous editions, so it’s less surprising that an entire continent won the bid. North America offers something that a lot of previous hosts – including South Korea, Russia, and Brazil – didn’t have in place: up-and-ready stadiums and infrastructure. The US, Mexican, and Canadian cities that are likely to host games all have adequate football stadiums and infrastructure in place to handle the World Cup. While some tweaking and expansions will occur, it won’t require the huge amount of investment that went into other countries’ preparations – thus, hopefully avoiding a financial boondoggle like in Brazil.North American cities can be cautiously optimistic about hosting 2026 World CupThe South American country ended up spending $3.6 billion on building stadiums, many of which today stand disused or vastly underused. Some of the stadiums were built in obscure places, like Manaus in the Amazon, and are now virtually abandoned. Much of the World Cup spending – which amounted to $15 billion in total – did little to boost Brazil’s long-term prosperity, and the country entered a recession the same year. Add in the country’s humiliating defeat at the hands of Germany in the semi-finals, and the 2014 World Cup is an experience most Brazilians would rather forget.

North America’s World Cup, however, is projected to be different. Indeed, the US Soccer bid book says that “no major public expenditures [are] required to stage a successful and memorable competition.” In this manner, the North American partners are hoping to emulate the experience of the 1994 World Cup in the US, where only $5 million was spent on stadiums. Though expenditures will be much larger than the 1994 figure, the basic premise of utilizing capable pre-existing (mostly NFL) football stadiums remains the same.

In the run-up to the successful United bid, strategy consulting firm The Boston Consulting Group (BCG) reported that a World Cup hosted in North America could generate $5 billion in short-term economic activity, including about 40,000 jobs. The BCG report also projects that individual host cities will see a net benefit of $90-$480 million in economic activity after accounting for public costs. BCG projects an overall net benefit of $3-$4 billion for the region.

The consulting firm’s report said that a key advantage of North America’s bid was that the three countries were relying on pre-built infrastructure, significantly reducing costs and allowing for the large projected net economic benefit.

Aside from the short-term economic benefits in 2026, BCG also predicts that hosting the World Cup will bring significant long-term benefits. Global media exposure would purportedly boost the profile of host cities, increasing tourism in the long term.

News

More news on