World Cup: The Money Behind It

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Every four years, 32 countries compete in the planet’s biggest sporting event. It has stopped wars, created national holidays, and built sports icons. The World Cup attracts millions of live fans and a worldwide television audience in the billions.

Its 22nd edition kicks off on Sunday and there is no shortage of storylines heading into the colossal tournament. Brazil chasing a sixth title. Messi and Ronaldo in their last dance. The United States hoping to solidify a golden generation.

The World Cup is big business, and this one is no exception. From betting markets to broadcasts, and even the host country, this World Cup is set to be unique in many ways. Let’s get into it.

Money Makes the World (Cup) Go Round

A country the size of Connecticut, Qatar, will bring the World Cup to the Middle East for the very first time. It’s the smallest country to host a World Cup, and with that comes major costs. It is estimated that over the last decade, Qatar has spent $220 billion on World Cup preparations. This is more than every other World Cup combined.

Less than $10 billion was spent on the eight stadiums. So where did most of the costs come from? Infrastructure. A metro system, an airport, over 100 hotels, and entirely new city districts to accommodate the estimated 1.2 million visitors entering the country of just 2.8 million. All built from scratch.

Not only was infrastructure a challenge facing the small Persian Gulf state, but also the heat. FIFA determined that soccer matches in 120-degree temperatures may create issues (like, say, people dying) and for the first time ever, they moved the World Cup to cooler winter months. The timing falls in the midst of the European club season so the already jam-packed tournament will be played on a condensed 29-day timeline.

FIFA’s Role

FIFA is dishing out roughly $1.7 billion for World Cup costs, the bulk of which comes from operational expenses ($322 million) and the payout of prize money ($440 million).

Here’s how that prize money is allocated (in USD):

• Champions: 42 million

• Runners-up: 30 million

• Third place: 27 million

• Fourth place: 25 million

• 5th-8th place: 17 million/team

• 9th-16th place: 13 million/team

• 17th-32nd place: 9 million/team

Each team has also received 1.5 million to cover preparation costs. Here's a breakdown of FIFA's investment budget for the tournament (in million USD):

This seems like a big spend until seeing the expected revenue number for the 2019-2022 cycle: $6.5 billion.

95% of that revenue is expected to come from the 2022 World Cup. As a nonprofit, FIFA invests most of its earnings into 200+ soccer associations across the globe to promote the sport.

Their three moneymakers are broadcasting, tickets, and marketing. FIFA has inked media deals with over 600 broadcasters in 223 territories around the globe. They’ve sold three million tickets, and have a strong list of corporate partners and sponsors.

FIFA breaks its World Cup sponsorships into three levels:

Level 1: FIFA Partners, which carries the highest level of marketing access for brands. Per FIFA’s website, this includes, “Direct advertising and promotional opportunities and preferential access to FIFA World Cup™ broadcast advertising” and “Exposure in and around the stadium, in all official FIFA publications and on the official website”.

Coca-Cola has had a formal association with FIFA since 1974, and stadium advertising at every World Cup since 1950. Adidas has supplied the official ball for every World Cup match since 1970.

Level 2: FIFA World Cup Sponsors, who have rights to promote their brand on FIFA’s platform throughout the World Cup. This includes Anheuser-Busch InBev, Byju's, Crypto.com, Hisense, McDonald's, Mengniu Dairy, and Vivo.

Level 3: Regional Supporters, who have the same tournament rights, but within the regions which they are headquartered. North American supporters include Algorand, Frito-Lay, and The Look Company.

The Gambling Factor

The World Cup will be different for American fans this time around. Why? You can bet on the matches. Not only that, but the United States is playing in the tournament. The team did not qualify for the 2018 World Cup so this is exciting news for Americans, especially those interested in betting on their home country.

The 2018 World Cup began a month after the U.S. Supreme Court started allowing states to legalize sports betting. By kick off, only 10 million Americans across three states had access to legal betting markets. Fast forward four years, 132 million Americans across 31 states now have access.

According to FIFA, $155 billion was wagered globally during the 2018 World Cup. This year, thanks to legalization in America and the mobile revolution of betting platforms, that number is likely to be smashed.

At 130-1, the United States is a long shot to win the tournament but patriotic betting is in full effect. The Red, White, and Blue have attracted more wagers to win the World Cup than any other team.

Looking Ahead

The 2022 World Cup has a chance to be the most-watched in its history, with a global audience of at least 5 billion.

That’s great news for broadcasters around the world — especially Fox and Telemundo who paid a combined $1 billion for U.S. media rights. But also in the United States, there’s a fall sport that tends to command some attention.

To compensate for less viewership as a result of the tournament's postponement, FIFA handed Fox the U.S. media rights to the 2026 World Cup. That one happens to be co-hosted by the United States. Mark your calendars.

Players will do pretty well themselves. While each team pays differently — the further you go the more you’ll make. Australia has said they will pay each athlete a $140,000 bonus if they make the knockout stages. And being on a global stage, many players pick up new endorsements post-tournament.

I look forward to tuning in. Thanks for reading!

Sam

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