Unrest in Brazil over the 2014 FIFA World Cup continues as reports surface that prosecutors have filed for an injunction to block FIFA from using public funds to pay for temporary infrastructure at the host stadiums. The equipment in question includes hospitality tents and cabling, as well as broadcasting equipment that, according to the Brazilian federal prosecutor’s office (MPF), “offer no long term benefit to society and should be paid for by FIFA, soccer’s governing body, and local organizers of the event,” Bloomberg reported.
The MPF said in a statement,
The public interest is not served by these costs that will not leave any legacy for the Brazilian people,
In an emailed statement, FIFA officials stated,
In order to further reduce the investment made by the stadium owners in the complementary structures, the LOC and FIFA are reviewing all of the requirements, as they did in February 2013 for the FIFA Confederations Cup, when there was a significant decrease in scope.
FIFA further stated that the liable party for the temporary infrastructure previously mentioned was “clearly stated” in the contracts that were signed by the stadium owners in 2007. According to Bloomberg, FIFA stated that “it and the local organizing committee, or LOC, were responsible for hospitality areas, commercial display areas, food concessions and official products stores.”
It is easy to draw correlation to this case and the riots that broke just this past June, as both, at least in part, pertain to the expenditure of public money for sporting events, which many of the rioters would argue could be better used to improve public transportation, health care and schools. If the MPF are successful, it could save $546 million in public money, and the 6 host cities that were a part of the 2013 Confederations Cup this past June are filing separately to sue for a reported $105 million over similar temporary structure costs for that tournament. Brazil’s supreme court has not as of yet delivered a ruling on the matter.
Though at first, an outsider might be inclined to side with Brazil, one very important piece of the puzzle has not been mentioned thus far, which could easily sway their opinion on the matter. While it is true that Brazil is spending a lot of time and money, $3.5 billion alone in stadium renovations, they stand to enjoy a cool $116 billion in additional revenues between 2010-2019 due to factors stemming from hosting the FIFA World Cup in 2014. Often most of the pros and cons of serving as the host country for the greatest spectacle in all of sports do not surface to meet the scrutiny of the public eye.
Brazil’s investment as part of hosting the World Cup is certainly large, there is no doubt. The country will spend $3.4 billion improving its airports, $7.6 billion in improved urban mobility, $575 million preparing its ports, and another estimated $280 million in training professionals in the tourism industry. Though these are just some of the costs associated with hosting the tournament for Brazil, the estimated $116 billion return to the country’s GDP by 2019 will more than pay for the initial expenditures. Most investors would not be so wary of such an ROI as Brazil stands to make if the estimates hold true. Those opposed to spending public money for the World Cup should first take a broader, more strategic view to scenario and understand the holistic, long term implications and potential benefits associated with each side of the decision.