Fifa World Cup: A simple game yet such complex economics

Despite the allegations against Qatar's hosting in 2022, football's biggest tournament is an irresistible attraction.

The Mexico Fifa World Cup of 1986 was my first, and to this day favourite, tournament. Ten years old, impressionable, naive and with few expectations, I was mesmerised by Maradona, Lineker and Platini and the colour of the Mexican wave.
Mexico, though, was no more than a stand-in after Colombia said it could no longer meet the cost of hosting the event. The Mexicans controversially beat out Brazil, Canada and the US after a typically opaque decision was made by Fifa in 1983.
Despite hosting successful global sporting events in the 1960s and 1970s, Mexico was by no means a logical choice in the early 1980s. Heat, altitude, record unemployment and a weak economy were some of the concerns raised. And an earthquake hit eight months before the event was supposed to kick off, causing billions of dollars in damage and huge loss of life.
It also emerged before the tournament that a Mexican broadcaster was behind the bid and its president was a close friend of Joao Havelange, the Fifa boss at the time. There were a number of angry questions related to corruption and conflicts of interest. However, Fifa stuck by its decision and the controversy was drowned out by the time the first ball was kicked.
With a week to go to this year's World Cup in Brazil, I am naturally reminded of Mexico '86. It is also instructive given the current furore surrounding Qatar's credibility as the host nation for 2022.
It raises the question that if behind the scenes there is a less-than-level playing field - which has been the case for decades - why do so many countries still battle it out to host the event? The potential economic gain?
Studies of previous tournaments show that the economic boost from hosting a World Cup including added tourism and retail sales at best runs into the tens of millions. Offset that with the billions required to get a host nation ready.
What about the social and political benefits? This is unclear. For example, South Africa, the host of the last tournament in 2010, is still wrestling with its legacy.
And promoting the game in new markets? Twenty years on from USA '94, football is growing in popularity in North America but is still not at the level of baseball or basketball.
The only consistent winner on all fronts has been Fifa, which earns billions from the World Cup and continues to amass power and influence across the globe with each tournament.
It is the emotive power of the World Cup that hooks countries, and it can become an obsession that defies rational investment principles. The promise of intangibles such as immense goodwill and once-in-a-generation public relations are too much of a temptation for most to resist.
That is the power of being associated with such a global, recognisable brand. That is what drives the complex economics behind what is ultimately a very simple game.
[e-mail]
Follow us on Twitter @Ind_Insights