FIFA 2018 To bid or not to bid by decree


									                   I N T E R N AT I O N A L F O O T B A L L B U S I N E S S

FIFA 2018: To bid or not to bid?
By Brian Sturgess and Chris Brady
Should	England	bid	to	host	the	FIFA	2018	World	Cup	finals?	                should	be	apportioned	between	The	FA	and	other	stakeholders.	
Some	members	of	the	British	government	certainly	believe	so.	A	            Secondly,	what	further	work	is	required	to	ensure	that	a	sufficient	
decision	by	The	Football	Association	(FA)	to	make	a	bid	will	get	the	      number	of	stadiums	are	fully	compliant	with	FIFA	regulations?	
full	support	of	the	British	Chancellor	of	the	Exchequer	and	Prime	         Consideration	is	needed	also	of	what	steps	could	be	taken	to	
Minister	in-waiting	Gordon	Brown	who	also	happens	to	be	an	avid	           spread	the	benefits	of	hosting	the	tournament	beyond	those	regions	
football	fan.	In	February	of	this	year	a	52	page	feasibility	report	was	   with	existing	stadiums	(e.g.	through	imaginative	location	of	training	
published	by	the	Treasury	in	co-operation	with	the	Department	of	          camps	and	team	hotels)?		Gordon	Brown	said:	“I	want	every	region	
Media	Culture	and	Sport	(DMCS)	which	concluded	that	England	               of	the	country	to	share	in	the	benefits	of	these	sporting	events,	I	
would	be	well-placed	to	host	the	2018	finals.		Gordon	Brown	said:	         want	every	young	person	to	be	inspired	by	them	to	increase	their	
“By	2018,	it	will	be	more	than	50	years	since	England	first	hosted	        own	participation	in	sport,	and	–	if	The	FA	decide	to	launch	a	bid	
the	World	Cup,	and	I	believe	it	is	time	the	tournament	returned	           –	I	would	make	it	my	personal	mission	over	the	next	few	years	to	
to	the	nation	which	gave	football	to	the	world.	With	the	Olympics	         persuade	countries	around	the	world	to	support	that	bid.”	
in	London	in	2012,	hosting	the	World	Cup	in	2018	would	make	
the	next	decade	the	greatest	in	Britain’s	sporting	history.”	Since	        Hosting the finals: Economic boom or winners Curse?
England	hosted	the	World	Cup	for	the	only	time	in	1966,	every	other	       Following	FIFA	2006	in	Germany	world	media	attention	has	already	
major	European	football	nation	has	hosted	the	tournament	at	least	         focused	on	the	preparations	underway	by	the	next	host	South	
once:	Germany	in	1974	and	in	2006;	Spain	in	1982;	Italy	in	1990;	          Africa	for	FIFA	2010	which	will	be	the	first	time	the	finals	have	
and	France	in	1998.	                                                       been	held	in	Africa.	The	2014	tournament	is	headed	for	South	
                                                                           America	where	Brazil	are	the	favourites	although	Colombia	has	also	
The Treasury Feasibility study                                             launched	a	bid,	but	already	countries	are	considering	whether	or	
The	British	Government	launched	the	feasibility	study	in	November	         not	to	bid	to	host	the	tournament	after	that.	England	is	not	alone	
2005.	At	that	time	Gordon	Brown	explained:		“We	are	now	starting	          in	declaring	an	interest:	Australia,	the	Benelux	countries	(Belgium,	
work	to	understand	what	produces	the	best	possible	bid,	how	               the	Netherlands	and	Luxembourg)	and	Mexico	have	all	also	already	
Government	can	support	and	assist	the	process,	and	how	to	                 expressed	interest	in	contending	for	the	honour.		However,	before	
ensure	a	bid	will	bring	maximum	benefits	for	every	region…The	             the	bandwagon	begins	to	role	a	number	of	hard	questions	need	
young	British	children	learning	to	play	the	game	today	can	become	         to	be	asked,	but	one	of	the	most	important	ones	is	does	it	make	
the	young	stars	of	our	national	teams	in	2018,	and	we	must	do	             economic	as	well	as	sporting	sense	for	a	country	to	host	the	
everything	we	can	to	help	them	turn	their	talent	and	potential	into	       tournament?	This	is	especially	apposite	given	the	implied	support	of	
World	Cup	success.”	The	study	produced	several	key	findings.	              any	bid	proposal	from	the	Treasury,	a	government	department	that	
First,	that	an	English	bid	is	well-placed	in	terms	of	stadium	             look	closely	at	the	uses	of	taxpayers’	money	and	given	the	already	
infrastructure,	with	eleven	existing	stadiums	currently	at	least	partly	   spiralling	budget	for	the	2012	Olympic	Games.	
compliant	with	FIFA’s	requirements,	and	with	the	potential	to	host	             Unfortunately,	there	is	no	clear-cut	answer	to	this	question.	
games.	Secondly,	that	England	is	also	well-placed	in	terms	of	its	         Some	studies	argue	that	there	are	significant	economic	benefits	
transport	and	tourism	infrastructure,	and	its	ability	to	manage	the	       in	terms	of	increased	GDP	and	greater	employment	derived	from	
security	and	policing	challenges	of	hosting	the	tournament.	Thirdly,	      hosting	a	large-scale	sporting	tournament	like	the	World	Cup	or	
the	study	claimed	a	bid	would	also	gain	much	popular	support.	             the	Olympics.	However,	there	are	also	a	number	of	extremely	
In	a	public	opinion	survey,	9	out	of	10	people	who	expressed	a	            pessimistic	studies	indicating	that	hosting	major	sporting	events	
preference	said	that	they	were	in	favour	of	England	making	a	bid,	         have	had	a	negligible	or	even	a	negative	impact	on	the	economic	
with	only	small	minorities	in	each	region	against	the	idea.	The	main	      growth	of	the	host	country.	Among	the	sceptics	is	British	sports	
reasons	cited	by	supporters	of	the	bid	were	that	it	would	be	good	         economist	Professor	Stefan	Szymanski	who	attributes	the	illusion	of	
for	the	economy	and	good	for	national	pride.	The	final	decision	on	        benefits	to	the	self-interest	of	the	organisers.	Referring	to	the	2002	
tabling	a	bid,	however,	lies	with	The	FA,	which	spent	much	time	and	       World	Cup	he	wrote	at	the	time:	“One	problem	frequently	identified	
money	on	an	unsuccessful	attempt	to	host	the	2006	competition.	            with	economic	impact	studies	is	that	they	tend	to	be	upwardly	
BBC	sports	news	correspondent	Gordon	Farquhar	has	said	that	               biased	since,	in	general,	the	studies	are	commissioned	before	the	
during	its	last	bid	the	FA	misjudged	the	internal	politics	of	FIFA	        event	by	promoters	anxious	to	claim	that	investments	–	usually	from	
and	that	before	it	bid	again,	the	association	would	want	to	ensure	        the	public	purse	-	have	been	well	spent.	There	is	little	occasion	to	
it	had	support	at	the	highest	level	of	the	game	and	not	just	the	          go	back	after	the	event	and	try	to	establish	whether	the	claimed	
government.		                                                              benefits	actually	materialised,	and	it	is	much	harder	to	provide	
     The	study	also	identified	a	number	of	specific	issues	which	          evidence	that	a	benefit	materialised	than	to	claim	that	the	benefit	
would	need	resolution	by	the	FA	as	part	of	their	deliberations	            will	occur	in	the	future.”
on	whether	to	launch	a	bid.	These	are	first	what	the	full	costs	of	             The	Treasury	study	noted	that	it	is	a	common	public	perception	
hosting	a	World	Cup	are,	including	any	additional	security	and	            that	hosting	large	scale	sporting	events	produces	wider	economic	
transport	improvements,	and	how	responsibility	for	those	costs	            benefits:	“This	is,	for	example,	illustrated	by	the	opinion	survey	

26	   Centre Circle	Autumn	2007
Autumn	2007	Centre Circle		   27
undertaken	to	inform	this	study:	of	those	who	favoured	the	idea	           for	staging	the	most	recent	World	Cup	and	initially	the	South	
of	England	bidding	to	host	the	2018	World	Cup,	42	per	cent	did	            Africa	Organising	Committee	for	the	World	Cup	2010	has	recently	
so	because	they	felt	hosting	a	World	Cup	would	be	good	for	the	            estimated	that	the	total	stadium	costs	will	be	around	US$1.0	billion	
economy.”	The	study	also	pointed	out	that	“realistic	planning	is	          to	build	five	new	stadia	and	to	renovate	a	further	five.		
key	to	ensuring	that	the	full	economic	benefits	from	hosting	a	                 In	the	case	of	England,	the	country’s	stadium	infrastructure	would	
major	sporting	event	are	obtained”	and	noted	that	UK	Sport	has	            not	require	anywhere	near	such	high	levels	of	expenditure.	Since	the	
published	detailed	guidance	on	how	to	measure	such	economic	               completion	of	Arsenal’s	new	60,000	capacity	Emirates	stadium,	six	of	
benefits.”	When	assessing	the	benefits	to	the	economy,	particular	         the	current	FA	Premier	League	clubs	are	playing	in	stadia	built	since	
attention	should	be	given	to	the	substitution	and	displacement	            1995.	Furthermore,	the	recent	Treasury	feasibility	study	noted	that	of	
effects	that	are	sometimes	ignored	or	underestimated.	UK	Sport	            the	remaining	14	clubs	11	had	plans	for	redevelopment	or	possibly	
have	advised	that	in	calculating	the	economic	benefit	of	a	sporting	       relocation.	The	study	believed	that	apart	from	the	new	90,000	seat	
event,	it	is	important	to	consider	only	“the	total	amount	of	additional	   Wembley,	currently	eight	Premier	League	clubs	(Arsenal,	Aston	Villa,	
expenditure	generated	within	a	host	city	(or	area)	which	could	            Chelsea,	Everton,	Liverpool,	Manchester	City,	Manchester	United	
be	directly	attributable	to	the	staging	of	a	particular	event””.		         and	Newcastle	United)	and	two	Championship	clubs	Sunderland	and	
Measurements	of	the	economic	impact	of	the	World	Cup	must	                 Leeds	United	had	grounds	that	were	wholly	or	partially	compliant	
distinguish	between	increased	consumer	spending,	mainly	related	           with	FIFA	requirements.	The	Treasury	study	notes	that	“Wembley	
to	overseas	visitors,	and	the	longer-term	growth	in	the	regional	or	       Stadium	would	be	an	important	asset	for	an	English	bid	and	is	likely	
national	economy	that	may	follow	the	event.	                               to	continue	to	meet	or	exceed	FIFA	requirements.
     Large-scale	international	sporting	events	have	a	positive	                 With	its	large	capacity,	it	exceeds	the	current	FIFA	requirements	
economic	impact	if	they	generate	additional	expenditures.	                 for	stadia	used	for	opening	matches,	semi-finals	and	finals,	which	
Expenditures	generated	by	an	event	are	of	two	types:	consumer	             need	a	capacity	of	60,000	seats.	Regardless	of	whether	
and	investment	spending.	Investment	spending	includes	money	                    The	FA	decide	to	bid	to	host	the	World	Cup	in	2018,	it	is	
spent	on	upgrading	or	building	new	sports	stadia	to	hold	spectators	       anticipated	that	there	will	be	further	general	upgrading	to	stadia	in	
and	provide	them	with	the	necessary	comfort	and	security	for	a	            the	coming	years,	either	in	terms	of	redevelopment	or	relocation.	
successful	event,	but	it	may	also	include	spending	on	infrastructure,	     But	across	the	stadium	landscape	it	is	clear	that	there	is	no	room	
roads,	railways,	airports	and	hotels	to	facilitate	the	sudden	influx	of	   for	complacency,	and	the	state	and	requirements	of	stadia.”
visitors.	Japan	and	Korea,	co-hosts	to	the	2002	World	Cup	spent	                The	consumer	expenditure	generated	by	an	event	is	mainly	
a	combined	sum	of	US$4.5	billion	on	stadia	alone	in	the	years	             the	spending	by	visitors	to	a	host	country	and	the	extra	spending	
before	the	tournament,	a	small	figure	in	relation	to	both	countries	       by	nationals.	The	FIFA	World	Cup	2006	in	Germany	attracted	
gross	investment	expenditure,	but	significant	additions	to	the	            2	million	tourists,	double	the	predicted	numbers.	Currently,	it	is	
capital	stock	of	their	sports’	industries.	In	contrast,	the	World	Cup	     estimated	that	a	total	of	three	million	tickets	will	be	sold	for	the	
1994	in	the	USA	was	played	in	stadia	that	had	mostly	been	used	            2010	tournament,	one	third	for	the	South	African	market,	one	third	
for	other	sports	so	there	was	a	minimal	amount	of	infrastructure	          for	international	fans	and	the	rest	reserved	for	marketing	partners	
investment	prior	to	the	event	and	in	the	case	of	the	World	Cup	            and	FIFA.	The	Chief	Executive	of	the	World	Cup	Local	Organising	
1998	held	in	France,	the	only	completely	new	stadium	constructed	          Committee,	Danny	Jordaan	has	said	South	Africa	expected	350,000	
was	the	80,000	capacity	Stade	de	France	and	total	investment	              visitors	for	the	tournament	in	2010,	down	on	the	numbers	in	
for	the	tournament	has	been	estimated	at	no	more	than	US$500	              Germany	primarily	because	of	the	country’s	geographical	position	
million.	Germany	invested	US$1.92	billion	on	stadia	in	preparation	        and	the	cost	of	long	distance	travel.	

28	   Centre Circle	Autumn	2007
Show me the money                                                        bid	committee	estimated	that	hosting	the	tournament	would	lead	
It	is	of	course	true	that	organisers	tend	to	be	gung	ho	about	           to	direct	expenditure	of	R12.7	billion	(US$1.41	billion)	leading	
a	coming	event.	The	1994	World	Cup	Organizing	Committee	                 to	an	economic	contribution	of	R21.3	billion	(US$2.37	billion)	to	
predicted	that	as	many	one	million	visitors	would	travel	to	the	         the	GDP	of	the	country		and	would	create	an	additional	159,000	
United	States	as	a	result	of	the	tournament	and	that	the	economic	       new	jobs.		South	Africans	continue	to	hold	positive	expectations	
impact	would	‘conservatively’	exceed	US$4	billion.	One	estimate	         and	attitudes	towards	the	tournament.	A	comparison	of	the	2006	
calculated	that	L.A.,	hosting	eight	games	including	the	Final,	was	a	    polling	data	from	the	Human	Science	Research	Council’s	(HSRC)	
strong	beneficiary	gaining	US$623	million	with	more	than	US$305	         on-going	2010	longitudinal	survey	shows	relatively	little	change	in	
million	in	direct	spending	within	L.A.	County	and	more	than	US$318	      broad	public	expectations	from	those	held	in	2005.		The	dominant	
million	in	secondary	spending.		In	contrast,	in	a	much	later	study	      segment	of	respondents	continues	to	believe	that	the	event	will	
two	American	economists	Professors	Robert	Baade	and	Victor	              bring	lasting	and	widespread	economic	benefits	to	the	country,	
Matheson	concluded:	“The	evidence	suggests	that	a	$4	billion	            and	in	their	area	of	residence.	They	also	believe	that	the	country	
economic	impact	for	the	United	States	projected	by	Cup	boosters	         and	their	local	authority	will	be	ready	to	host	the	event.	However,	
probably	did	not	materialize,	On	the	contrary,	the	evidence	indicates	   detailed	analysis	shows	that,	in	some	cases,	public	attitudes	are	
a	far	greater	likelihood	that	the	World	Cup	had	an	overall	negative	     becoming	more	subtle	about	specific	issues	around	2010.		“In	the	
impact	on	the	average	host	city	and	the	U.S.	economy	overall.”           first	survey,	62	percent	of	respondents	believed	that	the	2010	FIFA	
     Independent	bodies	also	catch	world	cup	fever.	The	Japanese	        World	Cup	will	ensure	economic	growth	and	job	creation,	and	the	
Dentsu	Institute	predicted	before	the	event	that	FIFA	2002	would	        percentage	dropped	to	51	percent	in	the	second	survey,”	said	
raise	Japan’s	GDP	by	US$24.8	billion	over	and	above	what	it	would	       The	HSRC’s	2010	project	leader	Dr	Udesh	Pillay.	Dr	Pillay	said	the	
have	been	otherwise.	This	represented	a	predicted	increase	of	0.6	       results	suggested	that	with	the	more	visible	and	public-focused	
percent,	a	respectable	figure	for	the	recession	prone	Japanese	          planning	for	the	event	and	debate	that	was	more	widespread,	
economy	in	the	decade	before	the	tournament.	In	the	case	of	             respondents	were	being	more	specific	in	their	expectations,	and	
South	Korea	the	tonic	effect	of	the	World	Cup	was	expected	to	           not	seeing	benefits	in	broad	terms.		“In	other	words,	South	Africans	
be	stronger	with	a	positive	impact	forecast	of	US$8.9	billion,	or	       were	beginning	to	be	more	realistic	and	discerning	about	their	
2.2	per	cent	additional	growth	in	the	economy.	A	more	sober	             expectations,”	said	Dr	Pillay.	
estimate	was	provided	by	Stefan	Szymanski	who	estimated	that	the	
combined	impact	of	stadium	construction	and	visitors	to	the	two	         Structural Change
host	countries	would	result	in	a	far	more	modest	expansion	of	GDP	       We	think	that	the	search	for	macroeconomic	benefits	in	excess	
in	the	two	host	countries	-	US$4.85	billion	and	US$8.89	billion	in	      of	the	costs	of	preparing	for	and	staging	an	event	is	not	the	only	
Japan,	equivalent	to	around	0.2	percent	of	GDP.	This	contrasts	with	     consideration	to	take	into	account	when	deciding	whether	or	not	to	
the	optimistic	estimates	of	the	World	Cup’s	impact	quoted	above	of	      bid	for	the	World	Cup.	There	are	other	significant	and	longer-term	
2.2	percent	of	GDP	in	Korea	and	0.6	percent	of	GDP	in	the	case	of	       benefits	that	arise	from	the	stimulus	given	to	structural	change	in	
Japan.	                                                                  the	football	markets	of	countries	that	have	staged	the	World	Cup.	
     In	Germany,	a	research	study	carried	out	by	the	Landesbank	         Structural	change	which	favours	an	expansion	in	the	growth	of	
Rheinland-Pfalz	(LRP)	in	2005	estimated	that	the	tournament	could	       one	industry	relative	to	another	can	be	manifested	in	many	ways,	
result	in	an	economic	growth	impulse	of	around	0.3	percentage	           but	the	most	obvious	is	evidence	of	a	change	in	the	average	rate	
points	of	GDP	compared	with	an	overall	LRP	forecast	GDP	growth	          of	growth	in	real	income	in	the	markets	comprising	or	associated	
of	1.7	percent.		The	study	forecast	that	the	influx	of	tourists	into	    with	that	industry.	In	the	case	of	football	there	are	three	main	
Germany	would	add	an	extra	five	million	overnight	stays	in	hotels	       sources	of	income:	matchday	attendance	revenue	(ticket	sales,	
and	youth	hostels	contributing	to	an	estimated	€1.5	billion	worth	       programmes	and	catering),	commercial	revenue	(sponsorship,	
of	direct	tourism-related	spending.	According	to	the	Postbank	the	       stadium	advertising,	merchandising	sales	etc.)	and	income	from	
demand	for	goods	and	services	ahead	of	and	during	the	World	Cup	         the	sale	of	broadcast	rights,	primarily	to	television	companies.	An	
would	bring	in	“two	to	three	billion	euros”	producing	a	growth	of	0.5	   acceleration	or	significant	change	in	the	trend	rate	of	growth	of	any	
percent	in	Germany’s	GDP.	The	study	predicted	that	the	German	           one	of	these	revenue	sources	for	football	as	a	whole,	can	be	taken	
economy	would	benefit	most	from	the	World	Cup	in	the	early	              as	an	indication	of	a	change	in	the	relative	popularity	of	the	sport	
months	of	2006,	before	the	tournament	actually	started,	but	the	         and	in	as	much	as	the	increase	in	spending	is	not	diverted	from	
analysis	also	projected	some	gains	for	the	overall	economic	growth	      other	substitutable	activities,	then	this	growth	can	be	seen	to	be	a	
during	the	tournament	as	well.	The	study	stated	that	electronics	        contributory	factor,	albeit	relatively	minor	to	changes	in	real	GDP.		
and	sporting	goods	stores	and	companies	would	all	benefit	from	              Structural	change	certainly	occurred	in	the	football	markets	of	
spending	by	football	fans.	Postbank	estimated	that	each	visitor	         France	and	Japan	as	a	consequence	of	hosting	the	tournament.	
would	spend	between	€800	and	€1,000	for	a	five-day	visit.		However,	     In	the	season	1987-88	average	matchday	attendance	in	Ligue	1,	
the	Treasury	report	noted	that	the	German	Central	Bank	stated	in	its	    the	French	top	flight,	was	11,240	per	game.	By	the	season	2004-
August	2006	monthly	report	that	following	some	positive	stimulation	     05,	the	average	number	of	spectators	per	game	was	86.5	per	cent	
of	certain	sectors	of	the	economy,	the	“one-off	effects	in	connection	   higher	at	21,294	per	game.	The	season-by-season	average	figures	
with	the	FIFA	World	Cup	are	now	[…]disappearing”.                        demonstrate	that	there	was	a	strong	rise	of	34.7	per	cent	in	average	
      There	are	already	a	number	of	optimistic	economic	forecasts	       Ligue	1	attendances	per	game	in	France	in	the	two	seasons	after	
around	for	the	impact	of	the	next	World	Cup	tournament	to	be	            hosting	the	World	Cup	and	after	France’s	victory	in	1998.	The	
held	in	South	Africa.		Prior	to	the	bid	in	2003	consultants	Grant	       average	number	of	spectators	per	game	rose	from	16,571	in	the	
Thornton	Kessel	Feinstein	acting	officially	for	the	South	African	       season	1997-98,	just	before	the	Finals	were	held	in	the	summer	

                                                                                                                   Autumn	2007	Centre Circle		   29
of	1998,	to	22,314	per	game	in	the	season	1999-2000.	Since	this	
step	change	attendances	have	levelled	off,	but	it	is	interesting	to	
note	that	a	World	Cup	effect	began	after	France	was	awarded	the	
right	to	host	the	Finals	in	July	1992	at	the	FIFA	Congress	held	in	
Zurich.	Average	Ligue	1	attendances	per	game	rose	from	11,100	
in	the	season	1991-92	to	14,207	for	the	season	1996-97.	Not	only	
did	this	structural	change	raise	French	attendance	revenue,	but	
the	favourable	impact	of	the	World	Cup	on	the	value	of	Ligue	1’s	
broadcasting	rights.	
     There	have	been	a	number	of	other	positive	structural	trends	
increasing	the	popularity	and	income	of	football	in	France	following	
the	World	Cup.	The	increase	in	the	demand	for	football	on	television	
and	broadcaster	competition	for	league	rights	has	raised	fees	to	
the	current	level	of	€600	million	per	annum	for	the	period	2005-
2008.	This	compares	with	total	income	from	all	sources,	including	
broadcasting,	in	the	top	flight	of	French	football	of	€696	million	in	
the	season	2004-05	according	to	figures	estimated	by	Deloitte	
(2006).	Furthermore,	the	number	of	players	registered	with	the	
French	Football	Federation,	the	national	association,	increased	
from	2.034	million	in	1997-98	to	2.162	million	during	2004-05,	an	
increase	of	6.3	per	cent.	In	the	words	of	Phillipe	Diallo,	president	
of	the	Union	des	Clubs	Professionnels	de	France:”The	enthusiasm	
created	around	the	tournament	boosted	the	media	coverage,	and	
the	star	quality	of	our	sport	and	our	players,	who	appeared	in	the	
celebrity	press	and	women’s	magazines,	reaching	an	audience	              What about England?
completely	new	to	us.	This	media	coverage	opened	football	up	             Should	England	bid	to	host	the	FIFA	World	Cup?	On	the	larger	
to	a	new	public,	particularly	to	women.	This	new	positive	image	          economic	benefits	the	Treasury	feasibility	study	came	to	no	direct	
reflected	on	the	French	clubs	and	was	reflected	in	their	everyday	        conclusion.	The	Treasury	only	stated	that	a	decision	by	the	FA	to	
activities.”                                                              bid	to	host	a	future	World	Cup	should	be	underpinned	by	a	realistic	
     In	Japan,	US$3	billion	was	invested	in	10	stadia	for	the	World	      assessment	of	the	wider	economic	benefits	of	hosting	the	event.	
Cup	2002	tournament,	nine	of	which	were	completely	new	builds,	           The	report	said	that	“although	the	overall	net	economic	impact	
with	an	average	capacity	of	40,000.	These	stadia	are	owned	by	            of	a	World	Cup	is	uncertain,	it	is	likely	that	certain	sectors	such	
local	governments,	but	are	used	by	the	nation’s	professional	league	      as	the	hospitality	industry	or	retail	sales	may	experience	a	short-
teams.	Although	the	capacity	of	the	venues	is	still	well	in	excess	of	    term	boost.”	It	recommended	that	should	the	FA	decide	to	bid	“it	
spectator	demand,	hosting	the	World	Cup	gave	Japan’s	fledgling	           would	be	advisable	to	commission	an	independent	study	into	the	
football	market	a	much	needed	shot	in	the	arm.	National	league	           wider	economic	benefits	of	hosting	the	competition,	which	can	
football	started	in	Japan	in	1965	based	on	teams	belonging	to	            be	published	alongside	the	detailed	bid	document.”	Bidding	for	
industrial	groups,	but	amateur	in	nature,	the	sport	was	second	to	        events	can	be	an	expensive	business	in	itself.	The	Treasury	would	
baseball	in	terms	of	attracting	consumer	interest.	There	was	no	          be	unlikely	to	fund	an	FA	bid	stating	“as	with	the	previous	bid,	
official	professional	football	league	in	Japan	until	the	launch	of	the	   The	FA	would	be	expected	to	fund	the	bid	alongside	contributions	
J-League	in	1993	and	although	still	supported	largely	by	corporate	       from	other	partners,	such	as	The	FA	Premier	League.	Commercial	
interests	an	attempt	was	made	to	encourage	local	affiliations	in	         sponsors	would	also	prove	a	valuable	source	of	funding.	The	
the	new	names	of	the	clubs.	Unfortunately,	after	a	strong	start	          German	bid,	for	example	was	entirely	financed	through	sponsors	
attendances	at	J-League	matches	began	to	slide.	From	an	average	          so	that	no	public	costs	arose	from	bidding.”		The	study	estimated	
of	19,	598	spectators	per	game	in	the	season	1993-94,	in	the	             that	“based	on	past	bids,	the	cost	of	a	bid	is	likely	to	fall	in	the	
season	1996-97the	number	of	mean	attendees	per	game	had	fallen	           range	of	£10	to	£30	million	(2007	prices).”	Ultimately,	the	decision	
to	a	low	of	10,	131.	The	decision	to	award	the	World	Cup	jointly	         to	bid	for	the	World	Cup	also	requires	an	assessment	of	the	state	
to	Japan	and	Korea,	the	first	to	be	held	in	Asia,	was	made	in	May	        of	England’s	football	infrastructure,	which	does	not	simply	include	
1996.	Average	J-League	attendances	per	game	began	to	recover	             stadia,	relative	to	other	countries	and	the	desirability	of	improving	
rising	by	63%	from	the	nadir	of	1996-97	to	16,548	the	season	             it.		Perhaps	more	significantly	we,	as	football	`nuts’	believe	that,	
before	the	tournament	was	held,	the	rise	attributable	to	‘World	          notwithstanding	any	economic	factors,	England	should	bid	for	a	
Cup’	fever,	but	also	the	impact	of	the	new	stadia	on	demand.	The	         World	Cup	again	because	–	well,	its	football.		
favourable	economic	impact	of	the	World	Cup	on	the	Japanese	
football	market	continued	after	the	tournament	and	by	2003-04	
average	attendances	at	J-League	games	rose	to	18,965	per	game.	
The	average	revenue	of	J-League	clubs	grew	from	€17.7	million	in	         Brian Sturgess is the editor-in-chief of Soccer Investor.
2000	to	€20.3	million	in	2002	rising	further	to	€22.0	million	by	2004,	   Chris Brady is Dean of the Business School at Bournemouth
an	average	annual	rise	of	6.1%,	again	far	in	excess	of	the	growth	in	     University and Professor of Management.
Japanese	GDP.	

30	   Centre Circle	Autumn	2007

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