Tomorrow the United States kicks off its World Cup 2010 competition against England. The excitement of this year’s event may fuel the existing US bid for the 2018 or 2022 World Cup, even among casual fans, should the American squad perform better than expected. Yet before deciding to allocate scarce public resources to the event we need to take a step back from the excitement of the South African games – which have run into many problems of their own.-- and carefully consider the justifications for hosting the event and whether doing so is the right decision for the country.
In a recent blog about the burdens the World Cup imposes on a small country, Skip Sauer mentioned the US bid to host either the 2018 or 2022 World Cup and referred to the inflated economic impact numbers from the US Bid Committee. He didn’t know that I have been working on a report questioning those numbers. The report is soon to be released. My best guess is that the Bid Committee’s economic impact numbers are significantly inflated. I say guess because the actual report done by AECOM, the consultants hired by the Bid Committee, is not publicly available and my requests for it have been ignored since I told them that I wanted to evaluate the methodology and assumptions underlying the projected $5 billion of impact on the country and $400 to $600 million of impact on the individual host cities.
If history is any guide, AECOM’s projections may be very far from the truth. Under a different name, AECOM was responsible for the impact study leading up to the 1994 World Cup that promised a $4 billion economic impact. But their math appears to have been far off then, and it can’t be any better now. A post-1994 World Cup study by Robert Baade and Victor Matheson found that the 1994 World Cup did not positively impact the U.S. by $4 billion, but negatively impacted it by $9 billion in lost income. AECOM was $13 billion off then, and they and the Bid Committee want us to trust their private study now?
Disturbingly, there is no discussion on the Bid Committee website of the costs to be borne by American taxpayers from hosting the event. In fact, even the cities that are part of the bid have given very little thought to what it will cost them to put on the games. As was reported in the course of San Diego’s bid to become a host city, some of the city council asked those exact questions. The San Diego Union Tribune reported:
San Diego’s bid to host World Cup soccer matches in 2018 or 2022 moved forward Tuesday despite criticism by two City Council members that the city doesn’t know what it’s getting into.
The council approved a proposed host-city deal 6-2, with Councilwomen Marti Emerald and Donna Frye saying they were unconvinced the move wouldn’t cost taxpayers any money, as supporters suggest.
“Just sign it now and figure out the terms and conditions later,” Frye said. “Quite frankly I’m really kind of surprised that that type of recommendation would be coming from ... the City Attorney’s Office.”
Unlike Councilwoman Frye, I am not at all surprised by the recommendation from the City Attorney’s Office. That is quite consistent with the approach the Bid Committee has taken with the broader American public. The Bid Committee tells us hosting the event will generate large economic impact but refuses to let us see the analysis that generated those impact numbers, resorting to ”Just sign it now.”
So, we have economic impact projections of dubious value and no information on costs. Nothing necessary to make a rational, informed decision is available. Before cities across the country and the nation commit irreversibly to the World Cup bid, decision-makers need all the necessary information. I hope public officials across the country will follow the lead of Councilwomen Emerald and Frye, and ask tough questions about the projected impact and the real costs.