World Cup - a money-making machine: Fifa is by far the biggest winner

Millions of people with overpriced tickets, billions in front of television screens... The World Cup is a money-making machine. Profits are uncertain for everyone except for FIFA, which is rubbing its hands.

In the next five weeks, around six million fans are expected at the World Cup stadiums alone, in addition to the approximately six billion people who will watch the matches on television.

These are FIFA's expectations, and accordingly, the huge economic expectations of certain companies associated with the tournament.

Game visitors will have to leave money in hotels and restaurants, they will pay for travel with airlines, and many fans will want to buy the same equipment as their idols, so sports equipment manufacturers are also looking forward to the profits.

But the biggest winner from the numerous spectators and media attention is by far FIFA itself, because it is formally "its" competition and therefore has a monopoly over the planning and implementation of the championship.

And in this case, that's a huge amount of money: the international umbrella association expects revenues of several billion euros, estimates Florian Pfefel, professor of sports management at the University of Applied Sciences in Bad Homburg.

Five billion dollars more – over the backs of football players

"FIFA is the economic winner of the tournament," Pfefel told German public broadcaster ARD. For the World Cup cycle that began in 2023 and culminates with this year's tournament, FIFA has announced a revenue target of $13 billion. The expert warns that this is significantly more than the World Cup in Qatar, where FIFA generated revenue of $7 billion to $8 billion.

This is partly due to the high ticket prices set by FIFA. A ticket for the first match of the competition in the USA cost more than a thousand dollars. Other ticket prices for the tournament in the USA, Mexico and Canada are also beyond previous levels.

The significant increase in revenue is also a consequence of FIFA's decision to increase the number of national teams from 32 to 48 for the first time, which increases the number of matches from 64 to 104. More national teams means more matches, and whatever the players and their coaches think about it – ideally, a national team now faces as many as eight difficult matches in a relatively short period before the final – for FIFA, that means money.

That means more revenue from advertising, sponsorships and ticket sales – although, according to Pfefel, that's still not the bulk of the revenue.

"If we look at the distribution of revenues in the last championship, i.e. in the period from 2019 to 2022, we see that just over 50 percent of revenues come from media rights, almost 30 percent from sponsorships, and only about ten percent from ticket sales, while just over five percent comes from other revenues," says Pfefel.

"A risk for you, but always a gain for me"

FIFA's main source of income is therefore broadcasting rights. International broadcasters and streaming platforms such as Comcast, Magenta TV or DAZN buy broadcasting rights from FIFA. In return, they expect new subscribers and higher advertising revenues.

Even experts don't know exactly how much streaming services pay for these rights. Unlike the Bundesliga's television rights, the rights for FIFA's competitions are not awarded through a public auction, but rather the terms are negotiated in secret between FIFA and the bidders. How successful the deal will ultimately be for the platforms themselves is uncertain until the very end, says Pfefel.

"Whether that investment will pay off may depend on the country and the rights package, but also on the sporting success of your own national team," he says.

The further a team advances in the championship, the more interest in the country it will attract. "Then viewers will be more interested in following the championship and will sign up for additional subscriptions."

The economic effects of the World Cup, however, are very unevenly distributed. While FIFA and some streaming platforms make huge profits, many of the costs remain the responsibility of the host countries and local communities. Investments in stadiums, infrastructure, security and transport are often financed with public money.

Barely measurable benefit for the host

Often these costs significantly exceed subsequent revenues. Critics have been talking for years about the unfair deal for taxpayers who will later have to indirectly make up for the budget deficit.

In addition, there is often talk of incentives and impulses for the economy, but when you look closely, this is usually not the case. According to estimates by FIFA and the World Trade Organization, the five-week tournament could contribute around $17 billion to the US economy.

Measured by the size of the American economy, that's marginal, says Christoph Breuer, a professor of sports management at the German University of Sport in Cologne.

The gross domestic product, or total economic output, of the United States is about $30 trillion. "That $17 billion is about 0,05 percent. It's barely noticeable," says Breuer.

Admittedly, a certain economic effect can be expected for the 11 cities in the US where the games will be held, but for the entire host country it is very limited.

For certain industries and companies, the World Cup can be a very lucrative business. In this sense, the tournament is reminiscent of the championship itself: there is one big winner, but many losers. But unlike tournaments, the winner is always the same: Fifa.