Most African countries are already on the way home. Morocco, Tunisia, Egypt, Senegal and Nigeria. Yes, the world cup is underway, but how much will it cost and who is footing the bill?
The world cup in Russia is estimated the cost of over $14.2 billion (1.4 Trillion KES or just half the 2018 Kenyan National budget), making it is the most expensive World Cup ever.
Let us see how this money was raised, spent and who the beneficiaries were.
- Prize money $ 400 million total for all teams.
The world cup is the highest trophy ever in football. All 32 participating teams receive a monetary reward, and for 2018, the total prize kitty is $400M or Kes 40B.
Lifting the trophy comes with a heavy financial reward of $38 Million, or Kes3.8 Billion for the winner equivalent to the County budget allocation for the whole of Elgeyo Marakwet in 2018.
The teams that are eliminated at the group stage like most African countries take $8million or Kes 808Million with them. This is more than the Sh682 million SportPesa three-year-deal for KPL, Football Kenya Federation, Gor Mahia and AFC Leopards combined.
It, therefore, makes economic sense for Kenya to put its house in order and qualify for Qatar 2022, even if it is just for the prestige.
- Infrastructure that benefits the host country amounting to $5.6Billion, equivalent to Kes 570B.
At a quarter of the Kenyan national budget;
A total of twelve stadiums in eleven Russian cities have been built and renovated.
All airports in the participating cities have been built or renovated and equipped with modern security and communication technologies, these include Platov International Airport in Rostov-on-Don, Koltsovo Airport in Yekaterinburg and Saransk Airport among others.
The road transport has been revamped immensely and a free bus service is being operated to transport fans from one city to the other.
This is a secret item in the $14.2B bill for the world cup.
Brazil spent $800Million on security in 2014.
Russia faces a bigger security challenge noting the fighting in the Chechen region and also unstable Syria in the wake of the Paris Terrorist attacks. We therefore realistically estimate that Russia will spend at least double the Brazilian cost, putting the security cost for the 2018 world cup at over $1.6B or Kes 161B.
- Other Expenses.
Hosting a world cup comes with other costs such as diplomatic hosting expenses, hosting volunteers from across the world, Marketing and Advertising costs, importation of materials including footballs, kits, etc and payment of support staff and football officials, we realistically estimate this to be over $1.3B or Kes137B.
So, who pays for this cost?
FIFA (Fédération Internationale de Football Association), is the body that runs world football. They foot approximately 90% of the operational cost for the world cup held every 4years. In 2018, the total operating cost is estimated at $1.2B, hence FIFA will foot approximate $1B of this.
The host country, with a choice to in-cooperate private players, is therefore left to cover for the rest of the costs, which majorly include security, infrastructure, and other miscellaneous costs. Russia and its investors will, therefore, cover about $13.2B.
The old adage goes, there is no free lunch, and therefore the people who invest expect a return.
In Moscow 2018, FIFA expects to earn $6B up 25 percent from 2014. With as many as 3.2 billion people expected to watch the tournament, broadcast revenue is expected to rise to $3 billion.
The host country will see an increase to its GBP of $26B.
State officials in Russia claim the World Cup will add between $26 billion and $31 billion to the national economy. “Preparations are estimated to have already added about $14 billion to the country’s GDP — the equivalent of 1 percentage point — as well as about 220,000 jobs” claimed Arkady Dvorkovich, Russia’s former deputy prime minister.
That tells you, politics aside, football and the world cup is a lucrative business and that’s why bidding for the opportunity attracts such lobbying and interests from various quarters including both good and corrupt players.
Can Kenya really qualify for the world cup?