Today, we give a platform to Professor Christopher Gaffney. To learn more about Gaffney’s resume and qualifications in writing this piece, click here.
In 2007, FIFA awarded the 2014 World Cup to Brazil.
Following Colombia’s withdrawal, Brazil was the only candidate as FIFA’s short-lived confederation rotation system had guaranteed that a CONMEBOL nation would host the 2014 tournament.
Immediately following FIFA’s announcement, the Brazilian Minister of Sport, Orlando Silva proclaimed that “the government is not considering investing money in constructing or remodeling stadiums.”
The government and the Brazilian Football Confederation (CBF) were confident that the private sector would invest heavily in Brazil’s stadium infrastructure. FIFA were not so sure, saying the following on page 24 of their stadium evaluation report dated October 20, 2007:
Unlike most previous bids, there is no evidence of corporate support through sponsorship of the bid. It may be that this is intentional and that the bid LOC (Local Organizing Committee) has not sought financial support from corporate Brazil. Nevertheless, the bid LOC appears to have been well funded by the bidding member association.
While this should have been a warning of challenges to come, the Brazil 2014 Local Organizing Committee (LOC) did not pursue private financing measures, but rather opened a bidding war between 18 Brazilian cities from which “8 or 10” would be selected to host the Cup.
In May of 2009, 12 cities emerged from the competition as World Cup host cities.
There has been wide and public speculation that the Lula government is paying off political favors through the World Cup.
Four of these cities (Manaus, Brasilia, Cuiabá, Natal) do not have teams competing in any of Brazil’s top three divisions and are guaranteed to have white elephants in their midst for the coming decades–much like the situation that South Africa is currently dealing with during their post-World Cup hangover.
As of November 2010, federal and state governments are planning on investing more than US$4 billion on World Cup stadiums.
Historic stadiums have been demolished without consulting the public, communities are undergoing forcible removal to make way for “clean” television shots and infrastructure projects, teams are playing hundreds of kilometers from their fan base, ticket prices are on the rise, and the average attendance for a Brazilian league match is not on par with Europe’s mega leagues–in fact it’s just a shade above MLS.
How can the government justify building these World Cup stadiums, which will average US$400-500 million each, with yearly maintenance costs upwards of US$3 million?
In Rio de Janeiro, less than 20% of public schools have recreation areas, yet the Maracanã will undergo an estimated US$600 million reform. Is this another classic case of public risk for private profit, or are there going to be real benefits accruing to the cities and citizens of Brazil long after the last 2014 World Cup game is played?
The problems inherent in hosting a World Cup in Brazil are as immense as the country itself.
However, Ricardo Teixeria, president of both the CBF and Brazil 2014, has quipped that the three problems facing the Organizing Committee are “airports, airports, and airports.”
Teixeria’s limerick has the effect of deflecting criticism of how the World Cup itself is going to re-make and reshape Brazilian football for the next generations by promoting what is necessary to make the event a short-term success.
Indeed, catching a flight from Manaus to Porto Alegre is as difficult as it is expensive.
Brazil is the size of the continental United States, but its lack of integrated transportation effectively makes it seem five times the size.
There is no passenger train service between Rio de Janeiro, São Paulo, and Belo Horizonte which form the economic and demographic core of the nation.
The airports are already bursting at the seams and the highways are poorly maintained. Car rentals are exorbitantly expensive (as are the hotels, rents, food and drink).
But the problem of a Brazilian World Cup is not limited to the inadequate infrastructure and it appears there are some severe and telling concerns that perhaps FIFA, or those that watch the games that it regulates, should pay heed to. Here are some pertinent, if unbelievable considerations:
• Black Box “Leadership”
For the first time in World Cup history, the head of the national football association is also the head of the national organizing committee. There are, of course, always strong relationships between the two entities, but the consolidation of power is a recipe for running the World Cup out of a black box.
• The “Committee”:
There are five members on the Brazil 2014 World Cup Organizing committee, one of who is the daughter of Ricardo Teixeira, head of the CBF and son-in-law of long time FIFA president João Havelange. This is a closed and clannish operation. By contrast, there were 32 members of the South African Organizing Committee.
• Ticket Prices:
There is constant chatter in the media about the “inevitable” rise in ticket prices that will pay for the stadiums, the “necessity to modernize,” the need to “improve security,” the “marketing opportunity” that the World Cup will bring, and so on. The rhetoric of World Cup boosters is that Brazil will, finally, have modern stadiums and that this will somehow transform everything in the Brazilian game.
These costs will be assumed by Brazilian fans in the form of higher ticket prices, which would make it extremely difficult for the working class to attend games at the stadiums (as has happened in England).
This could forever change the culture of the Brazilian stadium and the culture of Brazil itself. This is a cost that cannot be measured in numbers and raises important questions about the trajectory of development and democracy in Brazil.
• Parallels to South Africa:
Consider the following fallout from South Africa:
One report claims that: “When the games end, however, South African taxpayers will face a bill of more than 3.3 billion euros. Roughly the same amount FIFA expects to post as its net earnings from the event–one of the most profitable of all time.” Sure, there were jobs created, but what kinds of working conditions and at what wages?
How does this happen? One of the demands made in the host nation agreement is that all of the World Cup stadiums and a 2km radius of the stadium be turned over to FIFA, as the World Cup is a private event. FIFA directs security, can control who comes in and out, and can prohibit people from entering into the FIFA-zone with propaganda from companies that compete with their corporate sponsors if they so choose.
This effect was recently on display at the FIFA Fan Fests spread throughout South Africa and the world during the tournament. In Rio de Janeiro, the Fan Fest privatized public space, kicked informal vendors off the sidewalks, and prohibited musical instruments.
FIFA requires that there be one parking spot for every six spectators. Given Brazil’s infrastructure, parking spot allocation will not solve traffic problems.
The proportion of stadium space dedicated to VIPs is one of the major changes that Brazilian stadiums will have to undergo in order to meet FIFA’s exigencies. Conversely, there is no requirement that the stadiums be integrated into the urban environment or have spaces dedicated to education or culture.
• Financial Accountability:
Earlier this year, Brazilian Federal Minister Paulo Rattes (PMDB/RJ) publicly stated that the CBF was running the World Cup out of a black box.
Rattes said that there was “no planning, no financial accountability, and no way of regulating the process.” Rattes was particularly concerned with the fact that all goods imported for the World Cup are exempt from taxation!
Other ministers have noted that there are no post-Cup uses for stadiums and that they will pose an undue debt burden on cities. Fortunately, the Lula government passed a law in June that allowed cities hosting the World Cup to exceed their legally established ability to go into debt. FIFA and the CBF have not responded to these accusations (this link translated by Google and may contain inaccuracies). The government has repeatedly criticized the CBF for not responding to their queries.
• Tourism Demand Absent:
Massive spending on mega-event infrastructure is frequently justified under the guise that it will provide short-, medium-, and long-term boosts to local and national tourist economies. The current state of development in advance of Brazil 2014 calls that logic into question.
Munich had lower hotel occupancy during the 2006 World Cup when compared to other years. Brazil is currently subsiding hotel development to the tune of R$1B (or currently US$587 million). The tens of thousands of new hotel rooms may fill for the World Cup and Olympics, but will then join the stadiums as white elephants.
Why? Quite simply, history shows the demand for tourism is not there.
Brazil only receives around five million tourist visits a year, slightly more than the Dominican Republic. Rio de Janeiro receives about a million of those visits, with half arriving for Carnaval.
By contrast, Spain receives 50 million tourist visits.
The economic projections for the World Cup are based on 600,000 tourists who will each spend US$5,500 over fifteen days (link dead from Brazil, data here). If we add the US$1500 flight onto that number, it would be wise to start saving your shekels if you plan on coming to Brazil in 2014.
The only way to get more tourists to Brazil is to either cut out the onerous visa process (two weeks and US$230 for Americans) or move the country to the North Atlantic.
These kind of inflated projections make it seem as if the World Cup is going to suddenly jump-start the Brazilian tourist industry. It won’t and can’t because Brazil is expensive and far from global tourist circuits. The kind of tourists that are going to spend $7,000 per person on a two-week holiday are typically not the demographic that go to World Cups.
• Stadiums and Their Surroundings:
The Maracanã stadium underwent R$350 million (at present, US$205 million) in reforms for the 2007 Pan American games.
It is now undergoing a R$720 million (at present, US$422 million) reform and all of the work undertaken for the Pan American games has been destroyed.
As an example of forward thinking, this is backwards. The stadium’s capacity in 1999 was 179,000. In 2014 it will be 75,000. The Fonte Nova stadium in Salvador was legally “preserved” as a cultural patrimony (as is the Maracanã). The law was ignored and the stadium demolished.
The Vilvaldão stadium in Manaus was designed to be amplified. Its architect was not consulted before its destruction. In Belo Horizonte, the Minerão stadium and the Independence stadium both closed for repairs at the same time, forcing the city’s two biggest teams to play 90km away for the next three years.
In Fortaleza, communities are being forcibly removed in order to make way for World Cup construction projects. In one year, the budgets for the 12 World Cup stadiums more than doubled without actually building anything. It is difficult to imagine what the final costs will be. If we take the 2007 Pan American Games as a an example the World Cup will be 10 times over budget. US$20 billion in public spending is not out of the question.
The national development bank (BNDES) is providing each World Cup city with R$400 million (US$234 million) in hugely subsidized loans.
The two cities that have refused this money are Porto Alegre and Coritiba. Not surprisingly, these two stadium projects are struggling to find private investors.
Private investors have stayed far, far away from building stadiums in Brazil because it doesn’t make economic sense (this link translated by Google and may contain inaccuracies). One scenario for economic “sustainability” (this link translated by Google and may contain inaccuracies) in post-World Cup Brazil is an average ticket price of $40 with stadium occupancy around 60% for 60 games a year.
Currently, average ticket prices (including all of the free tickets issued by teams, the CBF, etc) runs between R$20-R$25, and stadium capacity is around 30%.
Even reaching these high numbers, it is doubtful that ticket sales alone will be able to cover the debt servicing and maintenance costs. Thus, fans will pay three times for the stadiums: public money for construction, higher ticket prices, and public debt servicing and maintenance. In Cape Town, they’re already talking about destroying the Green Point stadium because there is no tenant and the maintenance costs are crippling the city budget. How are the Athenians feeling about their Olympic expenditures these days? Where is the economic and tourist boom from the 2004 Olympics?
These are problematic facts that generate more questions than answers.
It is difficult to understand why Brazil agreed to spend billions of public dollars on stadiums that have little post-Cup utility, that get turned over to FIFA for two months of massive cash intake, that do not take into consideration the local football culture, and leave behind a sanitized legacy of rapacious consumerism that prevents the general public from using the very public goods they have paid for.
Will The World Cup legacy, in Brazil and South Africa, be one day viewed as a top-down tool for economic development that left behind dubious urban, social, environmental, and social legacies?
The production of World Cup stadiums here in Brazil completely ignores local football cultures, ignores the needs of the people who use the stadiums, and replaces historical spaces with erected masses with no ties to the community and, at present, no means of further healthy occupancy.
Massive public debts are being rung up in order to host a private party for FIFA and its corporate partners. The past is swept aside, rights are trampled, public space privatized, and urban space militarized for the World Cup. This is a terrible model and it needs to be changed.
Coming up, “Debating alternatives...”
Professor Gaffney will be checking the comment section as well if you have questions or comments…