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World Cup in Brazil will likely benefit local soccer clubs

June 1, 2014
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ANN ARBOR—Economists say the cost of hosting big sporting events like the World Cup in Brazil dwarf any perceived economic benefits for the host. But there will likely be at least one beneficiary from the Brazilian tournament that kicks off this month: local soccer clubs.

Big soccer teams in nations that host the World Cup – the world’s most popular sporting event – enjoy spikes in attendance after the competition, with the number of fans increasing by 15 percent to 20 percent, said Stefan Szymanski, a sports economist at the University of Michigan.

“Hosting these events seems to boost the image of the club game with long-term benefits for the league,” said Szymanski, a professor of kinesiology. “Brazil will be hoping that the World Cup will raise the Brazilian domestic competition to the level of Spain’s La Liga or the English Premier League.”

Szymanski said the bump in attendance is partly due to the benefits of renovating stadiums or building new ones for the World Cup, expected to draw a half million fans and 32 national teams.

But most interestingly, even clubs that play in stadiums that weren’t venues for World Cup matches gain from the event, he said. This suggests that the non-host clubs benefit from the World Cup’s publicity, feelgood factor, national pride and other non-tangible effects, the professor said.

Szymanski and Bastien Drut of the ESG Management School in Paris looked at attendance during and after the two major international soccer championships: the FIFA World Cup and the UEFA European Championships. They examined attendance for 10 championships and 11 years of attendance (five years before the event, the season of the event and five years after the event).

Following the event, attendance jumped 15 percent to 25 percent in the top two divisions in the domestic league and stayed there for roughly five years. However, even accounting for increased attendance and the possibility of higher ticket prices, the economic return was poor and none of the hosts recouped its investment.

The 2014 FIFA World Cup Brazil runs from June 12 to July 13.

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