Hosting FIFA World Cup 2026: Is it worth it?

[00:00:00][music] >> For host cities, the FIFA World Cup is a bit like taking a penalty kick with the match on the line. The potential reward [music] is enormous, but so is the risk of missing the mark and potentially overspending.

[00:00:14]>> [music] >> It was never intended to be a big revenue generation for the city in terms of cash.

[00:00:19]>> The city of Toronto [music] says it has stayed firm within its budget of $380 million.

[00:00:26]Within that budget is $226 million for operating costs and $153 million for capital costs.

[00:00:34]>> So, we have a couple of projects, capital projects happening, infrastructure [music] at Toronto stadium, as well as Centennial Park, which is host to our training site. And then operationally, you know, it [music] covers things like tournament operations, general operations, safety and security.

[00:00:52]>> Mayor Olivia Chow, originally expressing concern about the massive costs of [music] hosting the tournament, now says the city is within budget. And she says that money is not coming from Toronto taxpayers.

[00:01:04]>> It's coming from the tourists that come to the city, that live in our hotels, and the hotels are paying something extra. And that extra levy is used to fund a portion. The other portion, the other two supporters, of course, are the federal and the provincial [music] government.

[00:01:24]>> That funding from both levels of government is what Chow says has allowed the city to keep the budget within [music] the touchlines. The city of Toronto has committed $178 million.

[00:01:35]The provincial government [music] issued a grant of $97 million. And the federal government initially committed more than $104 million, and then in late April, tacked on [music] an extra $45 million of funding tied to security operations.

[00:01:52]>> Our safety [music] plan is about 90 plus million dollars.

[00:01:56]Because we have a new command center. We have paying more more officers.

[00:02:01]>> Meanwhile, Vancouver is expected to spend $714,000 per game with core and essential hosting costs for the city [music] between 320 million to 338 million dollars.

[00:02:16]Vancouver Mayor Ken Sim says the city has already seen a return on those [music] big ticket investments.

[00:02:22]>> Think of the worldwide attention that will be placed on Vancouver. You couldn't buy this advertising [music] if you paid tens of millions of dollars.

[00:02:32]We've already gotten payback on the city of Vancouver's [music] investment. And I do think we will get an even bigger return going forward.

[00:02:41]>> PavCo, the Crown Corporation that owns and operates BC Place, is spending between 178 [music] to 185 million on capital upgrades to the stadium and operating costs during [music] the tournament. Similar to Toronto, the federal government has also committed millions [music] of dollars toward Vancouver. The province of BC is covering a major chunk of the overall cost. Some of the expenses from the city and PavCo [music] fall under this envelope. But the province is estimating its net costs after offsets to be between [music] 85 million to 114 million.

[00:03:18]>> Vulture continues on, WALKS IT ACROSS, AND IT'S IN THE BACK OF THE NET AGAIN.

[00:03:23]>> As for legacy, Mayor Sim says the greatest [music] footprint may not be infrastructure. It could be helping to extend Vancouver's [music] defining soccer identity, its MLS team.

[00:03:34]>> When people see the excitement, >> [music] >> that could help us, you know, when it comes to keeping the Whitecaps in town.

[00:03:41]When people, when investors look and they see Vancouver is a soccer city and there's [music] an excitement for soccer, does that, you know, attract a potential future owner of the Whitecaps.

[00:03:53]Maybe.

[00:03:57]>> [music] >> Economic impact is a bit of an art and science. What is going to be the overall economic impact [music] of these events?

[00:04:05]You want to believe you generate new, not current, uh citizen dollars [music] that are coming to the city.

[00:04:10]>> Sherry Brotish is a sport marketing professor at Toronto Metropolitan University. She believes the full economic picture will only emerge once the tournament is actually over.

[00:04:21]>> In particular in these global economic times [music] when households are more taxed, I think it's definitely going to raise the criticism or the >> [music] >> critique of the spend for for six and seven matches.

[00:04:35]Um so I think [music] um it will be interesting again to see once the story is written and the [music] games are done.

[00:04:43]What has been the impact and and what are the narratives from small owners to larger restaurants [music] and chains in terms of their successes?

[00:04:52]>> Back in Toronto, not all business owners are feeling optimistic [music] about long-term revenue growth generated from the World Cup. Chris Krizant is the CEO of Soccer World Central. He says short-term, he believes revenue will increase by roughly 10 [music] to 15% provided they actually have the inventory to supply that demand.

[00:05:13]>> We're getting corporations [music] calling and ordering 200 scarves, 300 scarves.

[00:05:18]Uh we've had an order for 500 scarves.

[00:05:22]Um we've had [music] an order for 300 bucket hats.

[00:05:25]So the demand from corporations has has been eating into a lot of that supply as well.

[00:05:31]>> But is there still something to be said about hosting a mega event [music] like this? According to Deloitte, the city of Toronto could generate up to 3.8 billion dollars in economic [music] output for Canada by hosting six matches. It could also generate up to 250 million in GDP for the city and 2 billion [music] in GDP for Canada. And the province of British Columbia believes hosting the seven matches [music] will generate 1 billion dollars in GDP for that province.

[00:06:00]>> The fact that the event is 39 days long >> [music] >> bodes well.

[00:06:06]That's going to give the event time to build on those returns. So it's not just the match days, it's the off days in between.

[00:06:15]>> At Moneris, transaction data is analyzed to measure spending patterns tied to major events. Sean McCormack says bars and restaurants will see the most significant increase [music] in spending, especially if Canada can really capture the spirit of the tournament, [music] much like the way the Montreal Canadiens transformed playoff buzz into a citywide event.

[00:06:36]>> We know that in the second round of the playoffs Montreal citywide spend at bars and restaurants was up 85%.

[00:06:45]Like that's almost double. That's unheard of. It is very difficult to move the needle two or three percent citywide during an event.

[00:06:54]>> Thanks for calling Soccer World. How are you doing?

[00:06:56]Okay, thank you.

[00:06:57]>> Back at Soccer World, [music] Chrisanthou says he has noticed trends that correlate with the event actually being hosted in Canada.

[00:07:04]>> We have sold [music] more Canada jerseys in the first month this year [music] than we did the entire pre-World Cup lead-up to World Cup, World Cup, and post-World Cup in 2022.

[00:07:18]And that was Canada's [music] first time in a World Cup in a lot of years. And yet we didn't see an increase in demand 4 years ago for Canada jerseys.

[00:07:28]>> [music] >> But for now, it's too early to declare a winner. The cost-benefit verdict won't come in until the final whistle blows.