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Qatar and/or Bust

2010 December 3
by Victor Matheson

Today FIFA announced that the 2018 World Cup will be held in Russia, while the 2022 version will be held in Qatar, a country roughly the size of Connecticutt that has never qualified for the tournament and has essentially no existing sports infrastructure.

Qatar beat out the U.S. for the right to host the event shocking many who presumed that the U.S.’ extraordinarily successful 1994 hosting effort would lead to another go round in 2022.

Qatar envisions building 10 new 45,000 person, fully air conditioned stadiums from scratch and then disassembling the stadiums after the games and reassembling them in a variety of developing countries. The U.S. bid proposed using the country’s fantastic available stadiums to generate tons of money for very little expense.

From an economic sense, I think the bids can easily be summed up\ thusly: the U.S. bid is how you maximize profits while the Qatar bid is how you maximize the chance of winning the hosting rights if profit is not an issue.

If two bidders are maximizing over two completely different objective functions, there is no reason to believe that the “obvious” winner will come out ahead.

14 Responses
  1. James Reade permalink
    December 3, 2010

    It’s fair to say exactly the same thing happened for the Russia decision for 2018. The US and England (plus the others) needn’t have bothered if FIFA was only concerned about taking the World Cup to “new places”, “unchartered territories”, however bizarre and risky they may be. But of course, transparent organisation as they are, they didn’t make clear this objective at the start…

  2. Tom permalink
    December 3, 2010

    Unique perspective, great short article. Thanks. I don’t have a huge problem with the winners, but I have problems with the process.

  3. Tim permalink
    December 3, 2010

    I am glad we did not get the bid. With our country’s economy in sorry shape, we cannot be making promises to an entity whose “benefit” will take place for roughly a month in the far distant future. Meanwhile, we would surely be hit up for local, state, and federal funds to please FIFA. Think I’m crazy? San Diego was already planning on allocating tax payer money for this. Sorry, but when we struggle and debate whether to build stadia and infrastructure for sports entities with staying power in the United States, i.e., the NFL, I find it ridiculous to chase after an event with a short term benefit whose sport that at best ranks 5th on the nation’s sports radar, and is barely removed from being a fringe activity. I would say the same for Olympic bids too.

  4. December 3, 2010

    Excellent point. How can someone put forth the best bid if the criteria is never established? England and the US did well in FIFA’s own bid evaluation report and there were high risks involved with the bids from Russia and Qatar, but the voting doesn’t reflect that at all. http://www.fifa.com/mm/document/tournament/competition/01/33/59/45/bid_evaluation_report_1911.pdf

    It’s also worth pointing out that the projected available tickets for the US bid is 82% of the combined total of the two winners. Clearly maximizing for attendance was a mistake as well.

  5. Nick W. permalink
    December 3, 2010

    I thought Qatar made sense for 2022. After reading Stefan Szymanski’s “Soccernomics” I was curious to see if the choices were going to be held closer to European time zones. 2018 was obviously going to be in Europe, but 2022 seem to back up the idea of holding the games in time zones where Europeans can watch the World Cup during Prime Time.

    I think Qatar’s big boost was having the games close to Europe, time zone proximity, reduced travel time, and potential higher viewership probably are what FIFA was after in my mind.

  6. Greg Pinelli permalink
    December 4, 2010

    Any country that “wins” the World Cup bid is a loser….Russia will have enormous difficulties doing a decent Cup..while Qatar is utterly hopeless! Have at it! Since when did Sharia law countries ever handle diversity well..or at all??? Imagine English eight ball fans descending on this glorified sand pit!

    My take is very simple..by 2018 we’ll be in the midst of a huge deflationary a** slamming..Russia will absolutely pillage fans coming to the various sites…the Ruskies have never been able to handle any large put on correctly and this will simply join the list…

    The Cup…as pathetic as its become…. should be rotated between the US..Germany.France..and England…

  7. December 6, 2010

    Let’s see, put the World Cup in a tiny nation that’s right next to Saudi Arabia, what could possibly go wrong with that?

    My fearless prediction is that Qatar won’t end up hosting the World Cup at all. Sometime between now and 2012, probably a lot closer to now, the sclerotic government of Saudi Arabia will be overthrown by a bunch of fundamentalists who make the Taliban look like spring break in Cancun. Qatar will be fighting for its very survival, and the whole region will be far too unstable and dangerous. FIFA had better have a backup location in mind.

  8. Adib permalink
    December 6, 2010

    extremely short sighted and ignorant of Qatar. There IS sport infrastructure in Qatar including at least 4 International football stadiums, probably the world’s best sports academy ASPIRE (at least in terms of facilities) and countless other top facilities (tennis, swimming etc…) Let alone the fact that hosting the World Cup for Qatar is part of a strategy around developing the country, sports and tourism that has started 15 years ago!!
    I suggest taking a closer look at the country and getting to understand properly before jumping to uneducated and completely uninformed conclusions and cliches.

  9. Adib permalink
    December 6, 2010

    @ Greg Pinelli: ‘Since when did Sharia law countries ever handle diversity well..or at all??? ‘ Have you ever been to the Middle East? Have you ever even stepped in Dubai, Abu Dhabi, Bahrain, Qatar? I am sure you haven’t given your question. And i suggest you visit and understand, then try to ask questions.
    And to the lame and senseless point saying that the world cup should rotate between the US and Europe…i will just say what Zidane said: FOOTBALL BELONGS TO EVERYBODY!

    @ Peter: Understand your fear but then again people have been saying that about the Middle East since the 1st Gulf War in…1990! Result: the Middle east is the fastest growing, most secure (yes!) region in the world (take away China and India). So i dont think we should leave in fear and based on ‘If’ this and ‘If’ that….

  10. Victor permalink
    December 6, 2010

    @Adib: While your comments are well-taken, according to Qatar’s own bid, none of the 12 stadiums to be used in the World Cup are currently in use in their proposed form. Four stadiums are in existance, true, but one is a track and field facility, two hold fewer than 25,000 fans and will need to be more than doubled in size before the World Cup, and the Kalifa International Stadium will add more than 18,000 seats to its current size. From the perspective of the World Cup, Qatar really does have essentially no sports infrastructure ready to go right now especially when compared to the U.S. bid which identified over 100 potential venues that could accommodate over 50,000 fans.

    There’s nothing wrong with not having a lot of world class sports infrastructure. Indeed, at some point or other, someone on this blog has probably criticized the public subsidies involved with almost every one of the 100 potential venues the U.S. offered.

    The fact remains, however, that the infrastructure costs facing the U.S. bid were essentially zero while those facing Qatar are huge. Qatar may believe the long-term development benefits of this investment are worth it, but the research performed by many of the economists here suggests Qatar’s investment will not pay high dividends.

  11. Adib permalink
    December 6, 2010

    @ Victor: many thanks for the clarifications. You are right in pointing out that stadiums have to be enhanced and most of them built for the occasion. Also very true that the US has great and numerous facilities – which no other country in the World can match – as sports in the US has always been central to the country’s culture, development and philosophy.
    However, as i said Qatar is and has been planning to develop sports and sports infrastructure for a while now and part of this effort is hosting events such as the World Cup.
    With regards to the dividends, obviously there will not be substantial enough but they almost never are…for any country. I have read almost all of your publications (journals and books) on the economic impact of the World Cup on host nations, on which you deserve a lot of praise, and you argue in most of them that economically, hosting mega sports events is a bad idea economically speaking. However, next to the economy in the short term, there is the branding effect, the tourism development as so on….which only materialize if the host has a strategy along with mega-events. And Qatar has that. Also, while it is true that hosting mega-sports events might be seen as a financial burden for most hosts, when this money can be ‘better’ invested in developing infrastructure, hospitals, schools etc….Qatar can afford this luxury because of its large wealth and because it is already investing huge amounts of money in developing education, heatlh, infrastructure and so on…from that point of view Qatar is in a privileged situation and can afford to take the ‘world cup risk’….. Whether it will work or not, only time will tell (as you know it is extremely difficult to forecast the real impact accurately – estimates are estimates)….but don’t they at least deserve a chance before being dismissed? And also, don’t you think it’s fair that the World Cup expands to different horizons instead of constantly being offered to the ‘usual suspects’ somwhere between Western Europe, North and South America?

  12. Robert Macdonald permalink
    December 7, 2010

    It is better that these events are held elsewehere than in Australia as best I can tell. In spite of an Australian Government financed campaign involving $45 million directly pumped into the world cup bid, and much more into the national governning body (Football Federation Australia) over the past six or seven years; the goodthought campaign (apologies to Orwell) to both convince Australian citizens and then the FIFA Executive Committee that Australia is soccer crazy (except that you are not supposed to call it soccer here anymore, that is badthink), the fact of the matter is that while plenty of kiddies run around playing soccer, it doesn’t strike on the sporting radar down under in the same way the Australian football, rugby league and cricket do.

    So, we have spent $45 million on one vote. Frank Lowy is a highly siccessful businessman, but his team at Football Federation Australia couldn’t pull this one off. So I wonder now if that $45+ million couldn’t have been better spent on building public housing, paying school teachers or doctors or police officers or any number of other public uses that would leave a meaningful contribution to an improved life for those less well-off. Sure, the Olympics were great to watch, but when you learn that SOCOG actually bussed homeless people out of Sydney for that period in time 10 years ago you have to wonder if our priorities are just wrong to begin with. Certainly, 10 years on, there is no need for public funding to subsidise the most lucrative sport in the world, irrespective of whether you hold the tournament in Qatar, Australia, the US, Russia or anywhere else.

  13. Nick W. permalink
    December 7, 2010

    @Robert Macdonald

    I can feel your pain about spending so much to try and gamble to win a major event. A country I have strong family ties with, Japan, has been doing much of the same thing. 2016 Olympics had bids put together by Tokyo, Osaka, and Fukuoka, and had two of those eliminated internally after a good deal of spending, and of course the Tokyo bid failed costing event more. Now Japan has failed in trying to land the World Cup when it seemed obvious to me they wouldn’t get it only 20 years after 2002. All of this when the entire country has been having economic troubles, it doesn’t really seem to add up. I feel like its almost like a Poker match, and while Osaka and Fukuoka folded early after making small bets, Tokyo kept going cause they had put too much into the pot, that they couldn’t afford to pull out now. Same thing goes for the World Cup.

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