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How Brazil Hopes to Get Rich off the 2014 World Cup

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With less than two weeks left before the World Cup kicks off this summer in Brazil, all the attention has understandably been on the football side of things, with all participants playing warm-up friendlies to ready their squad for the tournament.

For the Brazilian government and footballing authorities, who have attracted criticism for repeatedly missing construction deadlines for the World Cup stadiums, perhaps the recent attention to the friendlies makes for a welcome respite.

After all, most of the coverage in the past year or so (this is an example from The Washington Post) has focused on the state of the host nation. (I wrote an article on that only a few months ago.)

But the public protests in Brazil have not gone unnoticed. In fact, the demonstrations that started during last year’s Confederations Cup have provided a controversial backdrop to the upcoming World Cup: How will officials be held accountable for the massive overspending they have committed in their preparations for the tournament?

It is imperative that there is an answer to how Brazil and its citizens stand to benefit from hosting a glamour tournament like a World Cup—not just from glory and hype alone.

Let’s take a look at how the 2014 host nation hopes to make money off the latest installment of the World Cup—but as we see, not all the hopes and proclamations may ring true.

 

Jobs and the Local Economy

 

Eraldo Peres/Associated Press

 

Brazil’s tourism minister, Vinicius Lages, told AFP, via Yahoo: “The Cup is not an economic panacea but a catalyst for Brazilian development. It was a key factor behind Brazil finally overhauling its infrastructure.”

The World Cup, he predicted, would add about $13.6 billion to the Brazilian economy—already the world’s seventh largest—in 2014 alone.

It doesn’t stop there.

A report by Ernst & Young Terco on the social and economic impacts of the 2014 World Cup concluded that the tournament “should generate 3.63 million jobs/year and R$63.48 billion income for the population in the period 2010-2014, besides an additional R$18.13 billion in tax collections.”

EY’s projected impact on the national production of goods and services stood at R$112.79 billion, while the sectors most benefiting from the event—defined as economic activities with major increased output—were civil construction, food and beverage, business services, utilities, information services, and tourism and hospitality.

All of which sounds glamorous and sexy, but there have been contrasting reports on the actual long-term gains as a result of hosting the World Cup—and they aren’t quite as pretty.

A Moody’s report on the impact of the tournament on different industry sectors concluded that “the 32-day event will provide short-lived sales increases that are unlikely to materially affect earnings and disruptions associated with traffic, crowding and lost work days will take a toll on business.”

Then there is the very real possibility that the “World Cup effect”—defined by IBTimes.com as the phenomenon of countries being more harmed economically from hosting the event, as seen from South Africa 2010—may take hold in Brazil.

Four years on, the same uncertain material benefits from a World Cup are still yet to be transparent. As cited in the IBTimes.com article,University of Maryland professor Dennis Coates noted that even the 1994 World Cup in the U.S.—claimed as one of the most successful and transformational ever—ended in an income reduction of $712 million for the average host city relative to predictions.

 

The Tourism Industry

 

Eraldo Peres/Associated Press

 

Vinicius Lummertz, Brazil’s national secretary of public policies, toldThe Rio Times last November of his optimism that Brazil’s tourism industry would stand to gain enormously from the World Cup:

We hope tourism in Brazil rises to a new level after the World Cup. With infrastructure improvements that increase the competitiveness of Brazil as a tourist destination, and the high exposure of the country abroad, I expect to see a significant increase in foreign tourists—but mainly more Brazilians traveling through Brazil.

The Tourism Ministry predicted that tourists home and abroad would spend R$25 billion during the tournament, when 600,000 foreign and three million Brazilian travelers are estimated to visit the country.

The massive spending on infrastructure by the Brazilian government in recent years in preparation for the World Cup has likely been to maximize the revenue the country can make during the tournament—and with an eye on the future as well.

The EY study quoted above addressed such needs for investment in order for tourism income to be realized:

Once the actions that are required to enable the country to capitalize on the opportunities generated by the World Cup are completed, the event may result in an increase of up to 79% in the international tourist inflow to Brazil in 2014, with even possibly higher impacts in subsequent years. In the period 2010-2014, that figure should be as high as 2.98 million additional visitors.

The tourist inflow directly and indirectly induced by the World Cup is expected to account for additional income up to R$5.94 billion for Brazilian companies.

Yet before Brazil can throw a metaphorical carnival to celebrate their upcoming economic benefits, a few sobering updates on the tourism front may dampen the mood.

According to Claire Rive of The Rio Times, “The tourism sector in Brazil has had to adjust their inflated estimates concerning the expected influx of tourists…leading to big discounts on local and international flights and accommodation during the tournament.”

The reduction in projected tourist numbers has led to discounts on airfare prices and package tours, while demand for accommodation has “substantially decreased and prices have decreased.”

 

And, of Course, Corruption

 

Eraldo Peres/Associated Press

 

That a World Cup involves staggering amounts of money and an opportunity for businessmen and government officials to make a quick buck is no surprise—and Christopher Gaffney, professor at Rio de Janeiro’s Federal University, agrees strongly.

“There’s collusion of the Brazilian governmental elite with the business elite, and the game is rigged in their favor,” Gaffney said(via Yahoo). “This was an opportunity to make a lot of money and that’s what’s happened.”

But adding to the depressing reality that corruption will form a huge proportion of Brazil’s money made from the World Cup is the astonishingly public manner in which the embezzlement has been carried out.

See the case of the lead builder of Brasilia’s Mane Garrincha Stadium, already the world’s second-most expensive football stadium.

The Associated Press ran a story this May alleging that Andrade Gutierrez, a construction conglomerate, and Via Engenharia, an engineering firm, made up a construction consortium that billed the government $1.5 million for the transportation of prefabricated grandstands for the Brasilia stadium—a fee that was initially thought to cost just $4,700.

Auditors pointed out that “wasteful cutting practices or poor planning added $28 million in costs,” while “$16 million was lost when Brasilia’s government inexplicably failed to enforce a fine against Andrade Gutierrez for a five-month delay in completion of the main portion of the stadium.”

According to Al Jazeera, the same firm made political contributions totaling $37.1 million after confirmation of which cities would be hosting tournament matches, and after it was awarded stakes in contracts totaling “nearly one-fourth of the World Cup’s total price tag,” four years after it contributed a measly $73,180 in municipal elections, a 500-fold increase.

Moreover, auditors found $275 million in alleged price gouging with just three-fourths of the $900 million Mane Garrincha Stadium project.

The most damning part?

“Funding for Brasilia’s stadium relies solely on financing from the federal district’s coffers, meaning every cent comes from taxpayers.”

What comes around, goes around.

 

This article first appeared on Bleacher Report.

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Finance and economics, Football Business, Politics, Stadiums and events, World Cup

State of Brazil 2014: Where Do Things Stand in World Cup Host Nation Right Now?

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During Brazil’s 5-0 hammering of South Africa in Johannesburg in an international friendly on Wednesday, more than just a footballing spectacle was on show.

Sure, Neymar’s hat-trick—the Barcelona star has hit 30 goals in just 47 caps—inspired the Selecao to a resounding victory over the hosts. And the Samba stars even hit the headlines after the match for all the right PR reasons when they elected to pose and celebrate a young pitch invader, as reported by the Daily Mail.

But this prestige friendly was also the meeting between the most recent World Cup host and the current incumbent, played at Soccer City, the venue of the 2010 final, where Spain beat the Netherlands to win their first-ever World Cup.

It was a passing of the baton—well, of sorts.

In an ideal world, from both FIFA’s perspective and surely the Brazilian Football Association’s, Brazil’s resounding victory would also have represented an analogous reflection of the upcoming World Cup in relation to 2010’s, with Brazilian excellence, preparation and execution not just limited to a five-star performance on the pitch.

In an ideal world, the joy and happiness we saw on the faces of the Brazilian team when they celebrated their victory (and the young pitch invader) would not only be repeated as they take to the stage to win their sixth World Cup on home soil in July, but for generations to come as they soak in the legacy of the “best World Cup ever.”

And in an ideal world, the sense of satisfaction in the Brazilian fans at Soccer City and watching on television at home would precede a sense of immense pride to be realized this summer while they watched a spectacle unfold at home, before they bid farewell to the hordes of tourists who will have created an economic boon for them to enjoy.

But where do things stand right now in the host nation? As we discuss below, things are not quite as rosy as they should be. Let’s look at how Brazil is faring, from different angles.

 

 

Gallo Images/Getty ImagesThe team: Ready to pounce

When it comes to matters on the pitch, the Brazil national team seem more than ready to take their chance on home soil this summer.

While a 5-0 drubbing of South Africa, their biggest ever loss at home, was an impressive achievement, and once again highlighted Neymar’s growing stature in world football and importance to his country’s footballing hopes, an arguably more symbolic result than took place last summer.

Brazil’s 3-0 defeat of World Cup champions Spain in the 2013 Confederations Cup final, itself a dress rehearsal for this summer’s World Cup, was courtesy of a match-winning performance by Neymar(and two goals from Fred), in an all-round spectacular performance. They inflicted upon Spain their first defeat in 29 competitive matches.

Luiz Felipe Scolari’s starting XI on Wednesday featured just two changes from his Confederations Cup final win last summer. WithNeymar having prospered since his move to Barcelona, the resurgence of Fernandinho at Manchester City and the impressive rise of Oscar at Chelsea, this is a Brazil side as workmanlike as it is flamboyant.

As Brazil prepare to welcome the visit of 31 other teams this summer, they will also revel in the fact that their opponents face a grueling match schedule, made all the more difficult because of the weather and traveling and exacerbated by the hot afternoon kickoff times.

This ESPNFC article lists all the obstacles that Brazil’s rivals will be up against: With the weather conditions of six cities classed as “stifling”—four of them “oppressive”—and high temperatures of over 31 degrees Celsius, the cross-country coverage will ensure startling differences between stadiums and locations.

The sheer largeness of the country means that some participating teams will face extremely tiring travel schedules. The USA team, for example, will travel a total of 8,800 miles for three of their group stage games, spending at least 35 hours commuting in total, while all matches will be played in “oppressive” conditions.

Of course, not all teams face such a demanding schedule, but it’s worth remembering that South American teams generally have a better record in World Cups hosted in the same region: All seven World Cups played in the Americas have crowned South American winners.

The only silver lining for other pretenders is that Brazil only finished as runners-up the last time they hosted a World Cup at home.

 

 

Friedemann Vogel/Getty ImagesThe logistics: Another last-minute dash

It seems as if World Cups, despite the spectacle they may be, always involve last-minute madness.

If we thought South Africa’s preparations in the final months leading up to their tournament weren’t a big enough alarm—as FIFA secretary general Jerome Valcke claimed in February 2010 (via Sky)—the situation this year is apparently even worse.

Just this January, FIFA President Sepp Blatter told the Telegraph:

Brazil just found out what [the scale of work] means and has started work much too late. No country has been so far behind in preparations since I had been at FIFA, even though it is the only nation which has had so much time—seven years—in which to prepare.

Not that his public criticism had had the desired effects. Valcke’s latest update in early March reflected the current state of chaos in Brazil’s preparations, as they “are working in conditions where the cement is not even dry,” and all IT and telecommunications systems hadn’t been installed, according to SportBusiness.com.

This was a long time coming.

A grand total of six stadiums, in Sao Paulo, Curitiba, Cuiaba, PortoAlegre, Natal and Manaus, had missed a deadline of Dec. 31, 2013 set by FIFA to allow a suitable preparation window ahead of the summer’s matches.

Since then, Curitiba has flirted with danger, coming close in February to being dropped for the tournament altogether, according to BBC Sport, only for local organizers to bring in hundreds of extra workers to meet building requirements and ultimately earn a FIFA reprieve.

Now Sao Paulo, which is set to host the opening game, might not be ready to hand its stadium over until May, a month before the tournament kicks off on June 12, according to BBC Sport.

Valcke, understandably, is unimpressed: According to theSportBusiness.com article above, he has had more harsh words regarding Brazil’s lax preparations:

I am not a World Cup specialist, but I will say this has not been easy for sure. We are almost at 100 days before the first game starts in a stadium in Sao Paulo which is still not ready and won’t be ready until May 15.

A glaring example of Brazil’s last-minute tendencies was the embarrassing fiasco over the preparation of the Maracana stadium for a high-profile friendly match between Brazil and England, supposedly to mark its grand reopening. Due to concerns over its structural readiness, and thus supporter safety, judicial order suspended the match a few days before it was schedule to take place, according to the Guardian.

The match ultimately resumed and ended in a 2-2 draw, but the warning signs were already there.

 

 

Ronald Martinez/Getty ImagesThe politics: The biggest headache of them all

If FIFA have already suffered enough headaches because of the disorganization in Brazil’s preparations, they’re about to experience even more—and this time the Brazilian FA could feel the heat as well.

It would’ve been all well and good if the issues that were raised before the Brazil-England friendly preceded an ultimately grand spectacle in the Confederations Cup.

But while Brazil’s victory over Spain said plenty about their ambitions to lift their sixth World Cup this year, what happened off the pitch among the local supporters were almost inevitable—yet surprising in equal measure.

The BBC reported that protesters clashed with police during the final, as demonstrations sparked by transport fare rises snowballed into more and larger grievances about the imminent World Cup and the costs associated with the tournament.

Massive public investment in preparation for the World Cup has irked the Brazilian public, who has witnessed a slowdown in the Brazilian economy and prefers the public money to be channeled into other priorities like health care and education, according to the Telegraph.

The “FIFA Go Home” and “There Won’t Be a World Cup” banners on show last summer weren’t as damning as the massive drop in public support for the tournament. In November 2008, almost 80 percent of the public were reportedly in favor of the World Cup. In March 2013, it had fallen to just 50 percent.

And the public worries are legitimate.

There have long been debates on the actual merits and sustainable benefits to hosting international sporting events like the Olympics and the World Cup due to the financial burden they put on the host countries, and we only have to look at South Africa to see the repercussions and strain that football’s premier tournament can put on a country.

According to the Guardian, the government spent £687 million in new and refurbished stadiums (10 in total) for the World Cup. Since the tournament ended, several struggled for continuous use—much like Beijing’s Bird’s Nest Stadium after the 2008 Olympics—and required continuing subsidies from hard-pressed local authorities.

A South African government report has said that the month-long tournament cost the country more than £2 billion, while FIFA earned £2.2 billion and came away with a handsome £394 million profit. Several of their stadiums have since been branded white elephants, an accusation that has since been leveled at Brazil’s own construction efforts, according to another Guardian report.

So all this talk of a legacy off the pitch, as FIFA and organizing bodies often claim World Cups can leave, could very well be seen by the public as pure rhetoric and a lofty dream as they end up bearing the economic brunt.

Which will put an even bigger burden on the shoulders of the Selecaostars.

A record sixth World Cup success on home soil would bring joy to their legions of loyal fans, but in the end, might just serve to placate the growing unrest across the nation.

Now imagine if they didn’t win.

Luiz Felipe Scolari still has plenty of work to do yet.

 

This article first appeared on Bleacher Report, where I contribute regularly on Liverpool and the Premier League, and occasionally on football business.

Business strategy, Elsewhere, Finance and economics, Football Business, Politics, Stadiums and events, TV and broadcasting, World Cup

The World Cup: Evolution from Celebration of Football to Money-Making Exercise

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“No decision will be taken before the upcoming 2014 FIFA World Cup Brazil, as agreed by the FIFA executive committee.”

Source? An official FIFA statement, via the Guardian. Topic? Whether the 2022 World Cup in Qatar will be held in the summer or winter, of course; it’s only been the topic that’s consumed most international football fans and FIFA observers in the past few months.

The timing though? Immediately after Jerome Valcke, the FIFA secretary general, suggested to a French radio station that the World Cup might be moved to November 2022 after all.

Confused? You’re not the only one. But what’s been made apparent from the Qatar World Cup 2022 debacle, is that besides all the confusion and suspicions, the focus has firmly been taken away from what the World Cup is supposed to celebrate: football, the game itself.

Sure, the talk has revolved around Qatar’s temperatures in the summer, which would make for harsh conditions for players and fans alike, but surely that would’ve been a factor in the decision-making process leading up to awarding Qatar the host rights, instead of a topic to be discussed afterwards.

That Sepp Blatter and FIFA want to bring the World Cup to the Middle East is not a secret: Back in November, he even entertained the idea of hosting the tournament across several countries in the Gulf region, according to the Telegraph. So the globalization of football and the expansion of FIFA are two key items on the agenda, and both politics and money are equally prominent at the heart of all this, as we studied in an earlier article on the World Cup controversies.

But how exactly did the World Cup get to this current state? To answer that question, let’s go back and trace the evolution of the world’s most prestigious tournament from celebration of football to money-making exercise.

Laurence Griffiths/Getty Images

The Olympics: Eternal Rival and…Founding Father?

To understand the World Cup’s evolution and growth, we must first consider the history of the Olympic Games, eternally seen as the World Cup’s rival tournament in terms of global reach and prestige.

The distinction is always made that the Olympics celebrate not just one sport, but sport as man’s pastime, while the World Cup is only the gathering of footballing nations in the world—and before the United States’ entry and strong showing, not even encompassing the entire world. The World Cup’s proponents point to the final as the premier spectacle in world sport, with no single sporting match able to match its global appeal.

In reality, while they might be rivals now and trying to outdo each other every two years, it didn’t start out that way. In fact, the World Cup has the Olympics to thank for its current iteration and success, because it was the Olympics that gave birth to the World Cup as we know it.

When FIFA was founded in 1904, international football—indeed, professional football—was a phenomenon only affordable for a few countries, and when football was inducted into the Olympic Games in the summer of 1908, only amateurs were represented. Any attempt at organizing a truly international football tournament was undermined by the lack of professional setups in most countries around the world.

But when Uruguay won both the Olympic football tournaments in 1924 and 1928, FIFA, with then president Jules Rimet as a visionary driving force, stood up, took notice, and most importantly, set about realizing his dream. The first FIFA World Cup was to be staged in 1930 in Uruguay, with politics—what else?—at the heart of the host location decision: It was to be the 100th anniversary of Uruguay’s independence, and it was to be made not a great celebration of the game itself, but a spectacular political statement.

How else to explain it, given that the Uruguay national football association was willing to cover all travel and accommodation costs incurred by participating teams? As even FIFA.com concedes, that possible profits would be shared with participants and deficits taken on by the host country won Uruguay the first ever World Cup hosting rights.

The 1934 competition was held in fascist Italy under the dictatorship of Benito Mussolini, and Rimet, according to this excellent Independent feature on his life, was already criticized for politicizing football.

Before the advent of television and the phenomenon of globalization, the World Cup had surrounded itself with politics and money.

(A footnote to add, though, is that Jules Rimet’s vision and dream of uniting the world through sport and creation of the World Cup earned him a Nobel Peace Prize nomination in 1956. Perhaps, hopefully, the World Cup at its heart was actually more than a celebration of the beautiful game, but a triumph of humanity.)

Carlos Alvarez/Getty Images

The Context: Globalization and Technology

But just as we can’t give the Olympics all the credit for introducing the concept of a FIFA World Cup, so Rimet and FIFA can’t claim all the glory for growing the tournament from a small competition featuring just a few countries in Montevideo, Uruguay, to the global spectacle that was the 2010 World Cup in South Africa.

As ever, context is key, and the explosion of global business and trade, just as it’s played a huge role in the history of the 1900s, is an integral part of the World Cup’s continued evolution. Before the business side of things took over, though, first came the phenomenon of television.

According to this TIME feature, the impact of television on the World Cup’s boom cannot be understated: From 1954 to 1986, the number of TV sets worldwide “increased more than twentyfold, from a little more than 30 million to more than 650 million.” This laid the foundations for a truly groundbreaking moment in football history.

The first live World Cup games were broadcast in Europe in the 1954 tournament, which reached only a handful of audiences due to the low volume of matches shown, but the potential of television and TV advertising was already apparent. (Not that the Olympics were to be beaten, of course: The 1936 Summer Olympics were the first to be broadcast on TV to local audiences. International broadcasts came in 1956.)

Fast forward a decade and a half. Spying an opportunity to conquer the world of football and reap the ensuing economic benefits in 1974, was new FIFA president Joao Havelange, who upon taking office turned his organization into a modern international NGO, putting in place the infrastructure, people and income-centered mindset of a corporation.

The only thing left to do for the World Cup, which previously featured 16 national teams, was to expand. And expand Havelange did, opening the doors to developing countries with eight additional slots (which have since been further increased to a total of 32 participants since France 1998), as discussed by Tim Vickery for The World Game. The Havelange era also saw the introduction of the FIFA U-17 World Cup, FIFA U-20 World Cup, FIFA Confederations Cup and FIFA Women’s World Cup.

The costs of hosting such an immense global tournament in one country were too much to bear for one host country and FIFA, and thus came the idea of corporate sponsorship of the World Cup. Havelange struck deals with Horst Dassler, heir to the Adidas fortune, for the German sportswear company and other big-name corporations like Coca-Cola to fund the tournament, paving the way for the commercialization of international football.

So while the advent of television advertising led to increased premiums for marketers to get their spots onto World Cup TV screens, behind the scenes within FIFA itself was a concerted movement to pump money into the World Cup—with political and economic influence once again the main motivation behind all these changes.

(The name Joao Havelange may be familiar. He was the same FIFA ex-president that resigned in April 2013 after a FIFA ethics report ruled that he had taken bribes, as reported by BBC Sport. The culprit in question? International Sport and Leisure [ISL], founded by Horst Dassler. Politics and money, indeed.)

Getty Images/Getty Images

The 1990s and Onwards: Spiraling Out of Control

If ever there was a curious decision in the history of world sport, the idea to host the 1994 World Cup in the US was clearly one, at the time. In hindsight, however, it was just another calculated plan from Havelange to bring the game to North American shores, which had yet to be consumed by football fever.

The legacy was stunning: To this date, USA 1994 still holds the total attendance record (over 3.5 million) and the average attendance record (68,991), according to USSoccer.com. The US’s advancement to the round of 16 for the first time since 1930 contributed to soaring TV ratings.

(Leading up to its hosting of the World Cup, the US also put in place their first ever professional soccer league. It’s no surprise that Major League Soccer was founded in 1993, a year before the 1994 World Cup. We explore the growth of soccer in the US in another article.)

The introduction of the World Cup in practically uncharted territory in 1994 was met with enormous financial successes, and since its foray into the world leader of commercialized sport and corporate sponsorship, FIFA have never looked back. The World Cup has since traveled to Asia (2002) and Africa (2010), goes to Russia in 2018, and brings us to the Middle East in 2022.

According to this Economist article, the World Cup broadcasting rights for France ’98 were sold by FIFA in 1987, before the stunning 1994 American success, for $344 million. An indication of how far the World Cup and FIFA have gone: In 1998, at the time of the article, ISL—which would later collapse, of course—had agreed to pay $2.2 billion to show the games outside America.

The groundwork for corporate sponsorship was laid by Havelange, but was taken to new levels under the leadership of current president Sepp Blatter. Let’s consider the 2010 World Cup, for example: According to a UPenn study, FIFA’s revenues related to the South Africa tournament amounted to a staggering $1.022 billion, of which $650 million belonged to broadcasting rights.

Participating national teams are in on the act too: FIFA was to provide $420 million to all participants and the football league teams providing players to the national teams, $30 million of which would go to the World Cup-winning team (Spain). First-round teams qualified automatically for $8 million each, while $1 million in preparation costs were provided to each participating football association.

This was brought about by the stellar line-up of corporate FIFA sponsors, known as “partners,” which included Adidas, Coca-Cola, Emirates Airlines, Hyundai-Kia Motors, Sony and Visa, who were “guaranteed exposure in the tournament stadium” and would receive “direct advertising and promotional opportunities and preferential access to TV advertising.”

The cost? A minimum of between 100 and million euros through to 2014. By which time, of course, the next World Cup cash cow will be held this summer, this time in Brazil.

Clive Mason/Getty Images

Conclusion: It’ll Only Get More Expensive From Here

Is it damning or merely inevitable that corporate sponsorship and incessant marketing efforts are now part and parcel of any World Cup?

In the build-up to this summer’s tournament, the allegations of corruption have been brushed aside after Havelange’s resignation in 2013, while all the talk of political and commercial interests have been directed towards the distant 2022 World Cup in Qatar, still eight years away.

It’s no longer news—rather, it’s an accepted fact—that the World Cup is now considered an extremely lucrative opportunity for brands and nations alike; this Fox article on Nike and Adidas’ brand battle pre-World Cup is now just part of the fabric. In fact, any sports company—or indeed any business entity at all—would be condemned for not taking advantage of a World Cup year to promote its business.

And so it’s only going to get more expensive from here. The spending and rights associated with the premier world football tournament have skyrocketed in the past decade or so, with the help and under the influence of a few key players, but the brand-new stadiums that are to be constructed in host countries are just the tip of the iceberg when it comes to World Cup spending.

But it’s the World Cup. Just as FIFA continue to rake in the cash, we football fans will continue to ignore the commercial influences and political battles and focus on the spectacle that will unfold before our eyes when the first whistle is blown on June 12 at the Arena de Sao Paulo.

An event of this magnitude only comes once every four years, after all. When the winning team hoists the Jules Rimet trophy on July 13, for once the celebrations will be directed entirely towards the football that they have played, not the money they will make.

This article first appeared on Bleacher Report, where I contribute regularly on Liverpool and the Premier League, and at times on the business of football.

Branding and marketing, Football Business, Politics, Stadiums and events, TV and broadcasting, World Cup

The Football Business Column: The Business and Politics Behind the 2022 Qatar World Cup Controversies

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“It may well be that we made a mistake at the time.”

Given the fresh controversy surrounding the death of migrant workers on the building sites for the 2022 Qatar World Cup, Sepp Blatter’s public admission in early September to Inside World Football (h/t ESPN) seems all the more pertinent. If only he’d thought of such implications and possibilities before actually approving the final decision.

No matter. What’s happened has already happened, but FIFA are now left to pick up the considerable refuse that has been generated in the wake of the significant recent fallout over the decision to award the tiny Middle Eastern emirate the hosting rights of the world’s most prestigious single-sport tournament. The problems are rooted in politics, as they were always going to be given the universality of the world’s most popular sport, and the international involvement in and exposure to the game.

Surely more background digging should’ve been conducted prior to the bid, and surely more scrutiny should’ve been paid to the implementation process by FIFA and the Qatari authorities, to avoid any potential banana skin in their grand ambitious plan to bring the tournament to new and exotic places on the planet.

Simply put, the migrant worker situation should’ve been researched and taken into consideration in the bid process. It might have been a bit too political to go into the human rights records and agendas of host countries, but it’s FIFA, it’s the World Cup and it’s all about politics anyway.

David Cannon/Getty Images

The Politics

“The World Cup and foreign labor abuse in host countries” sounds exactly like the kind of problem that should never have been inflicted on FIFA in the first place, such is the emphasis given to the separation of football from politics and anything of the sort. Sadly, this was always going to be tough.

Especially with, in Blatter’s words, football being “a global unifying force for the good, a force that offers to be inclusive in every which way and a force that has written anti-discrimination on its banner under my presidency.” Especially with FIFA’s goal to bring the World Cup to places that haven’t hosted it before—South Africa, Brazil, Russia and now Qatar (representing the Middle East); the likes of Australia and China are surely not far behind.

It’s in this context that Blatter’s admission to German newspaper Die Zeit (h/t The Guardian)—“European leaders recommended to its voting members to opt for Qatar, because of major economic interests in this country”—appears particularly worrying. Not only this: UEFA president Michel Platini has one-upped Blatter and suggested to the Associated Press (h/t The Washington Post) that this sort of political influence was commonplace in international tournaments: “With the extraordinary influence Mr. Blatter has, he has only all of a sudden realized there are political and economic influences when we decide who will host an Olympic Games and so forth?”

A public spat that not only casts a pessimistic, cynical light over proceedings, but one that should be avoided in the first place. Not even Platini’s insistence that former French president Nicolas Sarkozy didn’t personally ask him to vote for Qatar despite Sarkozy’s political support will clear anything up.

And it’s led to Qatar’s FIFA 2022 World Cup Organizing Committee secretary-general Hassan Al Thawadi defending his country’s bid and its legality. There will be lots of questions thrown his way; he’d better get used to fighting the fire.

Handout/Getty Images

The Scheduling

Possibly the biggest question of all when the subject of the 2022 World Cup in Qatar is brought up is this: Will it be held in the summer or will it be moved to the winter?

The first thing that comes to mind when we consider a winter World Cup is: What happens to all the leagues that run throughout the year except during the summer? It just so happens that those are the European leagues that have the most worldwide interest, the highest-profile players and the best quality and competition. Just a simple statement from the EPFL, the umbrella body of the major European leagues, will have FIFA scrambling.

The potential problems brought about by disrupting the league calendar are quite significant. It’s not just about asking those leagues to move their domestic calendars for just a season. It’s not just about the feasibility of working out a schedule that also fits in with the Winter Olympics. And it’s not just about moving a four-week tournament, as they’re finally starting to find out, and FIFA will have all kinds of oppositions, protestations and storms to weather in the coming weeks and months (hopefully not years).

Speaking of the weather, never mind the considerations that FIFA should have made regarding the scheduling due to the summer temperatures in Qatar even during the bidding process; now that the question of whether Qatar should host the World Cup at all is being asked again, even the chairman of FIFA’s medical committee has come out in public opposition.

Michel D’Hooghe has gone on record questioning the prospect of holding the tournament in the summer from a medical perspective and has included aspects other than players training and competing in scorching temperatures while he was at it: He mentioned the delegates, the “FIFA family,” the media and would you know it, the fans as well. A FIFA executive keeping the fans in mind?

Another perspective also had the fans’ interests in mind, or so it claimed. This time it was the Australian Football Federation, who lost its original bid for the 2022 World Cup, who has asked for compensation in the event that FIFA do move the tournament to the winter, just because it feels like it’s entitled to “just and fair” compensation to “those nations that invested many millions, and national prestige, in bidding for a summer event.”

The FFA did give some context, acknowledging the place football has in Australia by citing the fact that the A-League runs through the Australian summer (winter in the northern hemisphere) because high-quality stadiums Down Under aren’t as accessible during the rest of the year. FFA chairman Frank Lowy claimed that “clubs, investors, broadcasters, players and fans would all be affected,” which is a valid argument and observation.

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The TV Money

Just in case we were getting carried away with the seemingly alien notion that football authorities actually care about the common fan, there are other high-profile cases that shoot us right back down.

Fox Sports, a division of the US television network Fox, have made public theiropposition to any potential switch of the tournament to the winter (h/t Nick Harris of the Daily Mail), simply because “Fox Sports bought the World Cup rights with the understanding they would be in the summer as they have been since the 1930s.”

In this case, it’s about the finance and economics of broadcasting such an event, which, when the numbers involved come to light, are hardly a small matter. FIFA earned a whopping $1.1 billion for the rights to the 2018 and 2022 World Cups; Fox paid around $450 million, while NBC Universal’s Telemundo division bought the Spanish-language rights for $600 million.

And these are US networks that have acknowledged the rise in interest in the “beautiful” game (in quotes for obvious reasons considering the topic of this article) by shelling out for the English Premier League this season, but that are also cautious about having football competing for high-profile prime-time spots alongside the traditional big American sports during the regular American season.

Such is the importance and influence of broadcasters that Ben Rumsby of The Daily Telegraph reports FIFA have allegedly held secret meetings with them in an attempt to “quell opposition to any move,” which all but shows that FIFA are the mercy of their own money-making engines.

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The Disillusion

The debate and fevered discussion will no doubt continue for a while yet over the staging of the World Cup—and indeed if it will still be held in Qatar at all—but one thing’s for sure: Given the amount of money and politics involved in the game now, surely these were things that FIFA should’ve considered before awarding the hosting rights to Qatar?

If there had been a clear plan and clear communication during the process—even accounting for the widespread unwillingness to change across footballing authorities and TV networks (understandable, considering the financial implications)—perhaps right now, instead of clashing over it all, everyone would be celebrating that the World Cup Finals are finally arriving in the Middle East.

A disappointing chapter in the history of arguably the world’s most inclusive and socially impactful sport, and an undoubted tarnishing of FIFA’s slogan: “For the game, for the world.” Plenty of work to do still.

This piece originally appeared on Bleacher Report and is also part of my Football Business Column for SWOL.co, in which I discuss some of the latest news, trends and developments on the business side of football—everything including marketing, strategy, technology and finance.