What Price Prestige?
Two major international sporting events attract wide audiences in many countries—three if we treat separately, as do the Olympic Committee (IOC) and television networks since 1994, the Winter Olympics and the Summer Olympics. Then there’s the World Cup of soccer, or as called outside of the United States, football. These events have certain things in common. They occur every four years; they have huge television and international audiences; the location of the event is different each time; there is some discussion of bribery in choosing the location (generally because such bribery exists); and much controversy about the outcome of particular sporting events is certain to occur. Each event is the property of a private organization, which is responsible for choosing the location, overseeing the nature of local arrangements and the rules regarding participants and selling the international television contracts. This private organization also does everything it can to protect the monopoly of the event’s logo, apparel and related goods.
million per year to maintain a facility for a local team that barely drew 20,000 fans.
of the explanations for undertaking an activity that is expected to lose money. These explanations are, of course the rationale for seeking an Olympics or a World Cup, although on a greater scale given their greater costs. Thus expecting financial losses, based on the past record, is not itself a deterrent from bidding for these events.
number and quality of airports, stadiums, and ground transportation. How the issue will be resolved if Brazil does keep its promises remains to be seen, although the Brazilian officials claim that all will be completed by the start of the World Cup.
Stanley Engerman is John Munro Professor of Economics and Professor of History, University of Rochester, and Visiting Professor of Economics at Harvard University.