When the World Cup meets economics

Wrexham is a small town in Wales. Once known for its markets, mining industry, and brewing tradition, the town underwent a remarkable transformation after Hollywood actors Ryan Reynolds and Rob McElhenney purchased the struggling football club Wrexham AFC for $2.5 million in 2021.

The new owners quickly produced a documentary series, Welcome to Wrexham, centered on both the club and the town. When the series began airing in 2022, things started changing rapidly.

Millions of viewers around the world became captivated by Wrexham’s story. They were not merely watching the rise of a football club; they were introduced to the town’s residents, local businesses, passionate supporters, and the life of an entire community.

Before long, Wrexham emerged as a tourist destination, generating tangible benefits for the local economy. Today, the football club has evolved into an international brand.

Researchers continue to examine this phenomenon. Their focus is on how football can transform the economy of an entire town. The transformation has become known as the “Rob and Ryan Effect.”

An $80.1 Billion Economic Engine

If a small football club can reshape the fortunes of a town, imagine the impact of football’s biggest event—the FIFA World Cup.

The final of this year’s tournament will be played on 19 July in New York City. Yet the World Cup’s story does not end with the final whistle. Its effects often linger for years.

New tourists arrive, hotel occupancy increases, and host cities gain greater international visibility. Other impacts are less obvious. More people take up sports, local businesses expand, new jobs are created, and a country’s image among international investors can improve.

A study conducted by FIFA, the World Trade Organization, and research firm OpenEconomics estimates that this World Cup could generate approximately $80.1 billion in economic activity worldwide.

Of that total, about $30.5 billion would be generated in the United States, while $49.6 billion would be generated elsewhere. After accounting for costs, the tournament could add roughly $40.9 billion to the global economy.

According to the report, the World Cup will not only stimulate business activity but also increase earnings. Workers, officials, and employees connected to the event could collectively earn around $20.8 billion, with $10.2 billion generated in the United States and $10.6 billion elsewhere.

Employment effects are expected to be significant as well. Estimates suggest the tournament could support the equivalent of approximately 824,000 full-time jobs globally, including 185,000 jobs in the United States and 692,000 jobs in other countries.

Does hosting always bring profits?

Only 13 teams participated in the inaugural World Cup in 1930. This year, the tournament will feature 48 teams, compared with a previous maximum of 32.

One way to interpret this expansion is as FIFA’s effort to spread football more widely around the world. Economically, however, the reasoning is also clear: more teams mean more matches, more audience, more tourists, greater broadcasting revenues, and more business opportunities.

This year’s tournament will be hosted jointly by three countries, meaning all three stand to benefit.

However, hosting the World Cup does not automatically guarantee economic success. Germany, host of the 2006 tournament, is often regarded as the most successful example because its infrastructure was already highly developed. By contrast, South Africa in 2010 and Brazil in 2014 demonstrated how excessive spending on new stadiums and infrastructure can lead to financial losses after the tournament.

Host nation Qatar spent enormous sums on the 2022 World Cup, while the direct financial return was comparatively modest. Yet Qatar’s experience illustrates that a World Cup can become more than an economic project—it can serve as a nation’s branding and a tool for economic diversification.

Historically, governments have also used the World Cup for political purposes. Host Italy used the 1934 tournament to promote the image of Benito Mussolini and strengthen national prestige. Likewise, Argentina’s military junta viewed the 1978 World Cup as an opportunity for political messaging.

What do teams gain from playing?

For participating nations, winning the World Cup remains the ultimate achievement. Yet in an era of massive commercial revenues, teams and players also receive substantial financial rewards.

In this respect, Brazil was somewhat unfortunate. Although it has won the World Cup a record five times, it received no prize money for its first three triumphs because FIFA did not introduce World Cup prize money until 1982. That year’s champion, Italy, became the first team to receive an official cash award.

Brazil did, however, receive another priceless reward. The original World Cup trophy was known as the Jules Rimet Trophy. Under the rules at the time, any nation that won the tournament three times would keep the trophy permanently. Brazil secured that right after winning its third title in 1970.

Although the trophy’s metal value was relatively modest—it was silver coated with gold—its historical and symbolic value was immeasurable. In 1983, however, it was stolen from the headquarters of the Brazilian Football Confederation in Rio de Janeiro and is believed to have been melted down.

In 1997, at an auction in London, FIFA purchased a replica of the Jules Rimet Trophy for £254,500. There was speculation that it might actually be the original lost trophy. However, subsequent tests confirmed that the trophy was not the original.

The current World Cup trophy stands 36.5 centimeters tall and weighs 6.2 kilogrammes. It contains approximately 4.2 kilogrammes of 18-carat gold. In 1974, that quantity of gold was worth around $21,000; today it would be valued at roughly $625,000. However, winning teams no longer keep the original trophy and instead receive a replica.

Money for participation alone

Today, every World Cup participant receives prize money, not just the champion.

The first World Cup in 1930 struggled to attract even four European teams. Prize money was introduced only in 1982, when Italy earned $1.4 million for winning the tournament.

Subsequent champions received steadily increasing rewards. Argentina (1986) received $2.2 million, West Germany (1990) $3.5 million, Brazil (1994) $4.5 million, France (1998) $6.4 million, Brazil (2002) $8.5 million, Italy (2006) $12.2 million, Spain (2010) $30.1 million, Germany (2014) $35.1 million, France (2018) $38.1 million, and Argentina (2022) $42.2 million. In other words, World Cup champion prize money has increased nearly thirtyfold over the past four decades. This year’s champion will receive $50 million.

In other words, World Cup champion prize money has increased nearly thirtyfold over the past four decades. This year’s champion will receive $50 million.

Most of us are merely spectators. So what do we gain from the World Cup?

A 2024 study published in BMC Psychology, titled 'Can Watching the World Cup Make You Mentally Healthier' offers an answer. The study found that people who regularly watch the World Cup and other major sporting events tend to report higher levels of happiness, life satisfaction, and psychological well-being.

Watching sports helps people connect with others, build social relationships, and develop a sense of identity and belonging through supporting a favourite team.

The study also suggests that following the World Cup can help satisfy three fundamental psychological needs: feeling connected to others, exercising personal choice, and experiencing a sense of competence. All of these contribute to overall well-being.

The research was not conducted in Bangladesh, of course. Here, happiness often seems to depend on either Argentina or Brazil. Whether one group of supporters will celebrate while the other suffers—or whether both will end up disappointed—will not be known until 19 July.

Only then will we find out whether sweet shops sell more celebratory sweets, or whether bottles of Seven Up become the preferred remedy for heartbreak.

* Shawkat Hossain is the Head of Online, Prothom Alo