FIFA is printing money from the World Cup. What about the host cities?

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FIFA is printing money on the World Cup, with an expected $10 billion in revenue and profit margins that would make a tech company blush. Host cities are footing the bill, spending hundreds of millions of dollars on security, transit, and infrastructure.
Ask Alex Lasry, who heads the New York — and, ahem, New Jersey — host committee, whether it was worth it, and he’ll counter: Go ask Chicago, which sat out the tournament.
“I was on the bus going to a game at MetLife, sitting next to people from Chicago, and they were disappointed,” he said on the latest episode of Compound Interest. “Now that everyone’s having fun and the games are starting, it’s, “Oh yeah, this is what we’re missing, and this is what you’re missing out on.” (We were talking before the US was knocked out Monday night, which might dampen local turnout in host cities around the country.)
Lasry took on the skeptic’s argument, supported by one academic study after another, that big events like the World Cup generate more hype than hard dollars. “I would ask, who’s losing money and what are the deficits?” said Lasry, pointing to hotel occupancy and room rates that are up year-over-year in New York. The NYNJ Committee’s estimated $3 billion in economic impact “doesn’t even include the branding and prestige that you have,” he said, which is “really hard … to put a price on.”
“This is part of what you have to do to be the greatest region in the world,” Lasry added. “And when you’re trying to show that you are the space for business, entertainment, media, et cetera, you need to be hosting these events.”
The host committee itself operates as a quasi-independent entity, under contract to FIFA and subject to its sponsorship restrictions, but responsible for the fan experience outside the stadium and for driving economic impact to the region. He said the New York-New Jersey committee filled all 20 of its sponsor slots, more than any other host city, by pitching advertisers including Uber and Bristol Meyers on the chance to reach millions of international visitors: “You’re getting a global marketing deal, locally,” he said. “If you can’t sell the World Cup, you can’t sell.”
Lasry has spent his career at the intersection of sports, politics, and money. His family co-owned the Milwaukee Bucks for almost a decade, and as an exec, he helped steer the arena deal that became Fiserv Forum and the “Deer District” development he now cites as his model for World Cup fan zones.
His advice for private equity firms rushing headlong into sports: “The short-term dollar isn’t worth the long-term fan depreciation.”

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