This year the World Cup takes place in Russia, leaving the citizens of the world excited and eager to see who will take the cup home. According to a survey released a few days before the start of the World Cup, the Russians were happy to host the event, and 77% of the population believes the World Cup will improve the country’s reputation.
To support the selections of all countries, there are large investments, both government and private companies that sponsor the event. This is one of the biggest events in the world and, therefore, investments in the World Cup are very high.
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The Russian Cup generated the investment of R $ 38.4 billion, about 57% more than what was invested in Brazil, the last country that hosted the World Cup. Here, the investment for the World Cup was R $ 25.5 million to the national coffers, according to the data of the report of the TCU (Court of Auditors of the Union).
At the time of the Brazilian Cup, the investments were considered high, but, nevertheless, they are inferior to those of Russia. In addition to investment, Russia has managed to create about 220,000 jobs, moving the local economy.
Part of the money was also used for improvements in the city’s infrastructure, such as roads and airports. The expectation of the Local Organizing Committee is that the World Cup will impact Russia’s GDP – about US $ 15 billion. In addition, it is expected that there will be an increase of US $ 2 billion in tourism.
Russia’s money was used for the construction and renovation of 12 stadiums, with 7 completely new ones. Also 95 bases of support for the selections that participated in the world-wide one were built.
The stadiums built from scratch were Kaliningrad, Nijni Novgorod, Rostov, Samara, Saransk, St. Petersburg and Volgograd. The renovated places were Lujniki, Yekaterinburg and Sochi.
Of the total, the Russians used about 40% for the sports infrastructure, which includes buildings and stadiums reform, as well as support bases. R $ 14.9 billion were spent in this sector. In Brazil, spending on sports infrastructure was R $ 11.2 billion.
Unlike in Brazil, FIFA had no problems with the works in Russia. Since being chosen to host the 2018 World Cup, the country has begun to organize itself to respect the deadlines and deliver everything promised.
Because of the cold of Russia, not all the works were finalized and tested in 2017. However, everything went well, and the works were delivered.
The amounts spent in each stadium were:
- R $ 2.4 billion in St. Petersburg,
- R $ 1.7 billion in Spartak,
- R $ 1.6 billion in Olympic Fisht,
- R $ 1.4 billion in Lujniki,
- R $ 1.16 billion in Kazan,
- R $ 1.15 billion in Rostov,
- R $ 1.1 billion in Samara,
- R $ 1 billion in Kaliningrad,
- R $ 0.95 billion in Volgograd and Nijni Novgorod,
- R $ 0.93 billion in Mordovia and
- R $ 0.75 billion in Iekaterinburg.
Transport infrastructure also requires a lot of investment from the Russian government. The expense was about R $ 12 billion, in addition to the R $ 166 billion with operating expenses.
These investments for the World Cup are very important both for the event and later. Improved roads and airports, for example, can bring financial returns to the country, with improved transport efficiency.
The expectation is that, in the long term, the country can win with the investments made for the World Cup. Other expenses were for the most diverse types of infrastructure (R $ 4.16 billion) and operating expenses (R $ 6.5 billion).
In the transport sector, only one of the promises was not fulfilled: delivering a high-speed train linking Moscow to Kazan and making the journey in 4 hours. Today, the train already exists, but makes the journey of 750 kilometers in 12 hours.
Who are the big investors?
The investment for the Russian World Cup came in federal funds, state and private companies and regional governments. The government was responsible for most of the infrastructure spending, while companies took responsibility for stadiums, hotel construction and airport refurbishment.
According to Local Organizing Committee, investments in infrastructure will bring an impact of R $ 48.7 billion to the country, which represents 1% of GDP (Gross Domestic Product) of Russia.
The event is expected to bring 586,000 foreign tourists, which also helps to move the local economy through tourism.
Most of the investment for the World Cup came from federal funds, which represent 57.6% of the total invested in the event. Another state source of income comes from regional governments. These are responsible for 13.6% of the amount.
Government investments were for the most part reallocated to the transport side. Part of the money was also earmarked for some stadiums. In an interview with a Russian channel, the president of the country, Vladimir Putin, admitted that he spent too much money on the event.
State and private companies also have their share of investments in the World Cup. According to the Local Organizing Committee of the event, these companies accounted for 28.8% of the investments.
The money of the companies was put, mainly, in sectors of airports, construction of hotels and great stadiums, like the one of Saint Petersburg.
In addition, there are also sponsors, both global and those of each team or player.
Were there any loans?
The NBD (BRICS New Development Bank) is the leading BRICS bank, a group that brings together Brazil, Russia, India, China and South Africa. Because of the complicated economic situation in which resources to fund the event.
The Local Organizing Committee did not disclose data regarding borrowed values. However, it is common for countries to borrow with the banks related to it to be able to finance the event.
The World Cup welcomes thousands of tourists and also demands lots of money. In addition to spending on infrastructure, the host nation needs financial resources to deal with potential unforeseen events during the World Cup.
In addition to investments by companies and governments, Copa also receives investments from sponsors, mostly from other countries. Sponsorships can take place through selections and players, as well as global sponsors of the event.
The global ones are Budweiser, Hisense, McDonald’s, Mengniu and Vivo. These are responsible for providing money to the worldwide and in return, the logos of companies are placed in stadiums and papers to publicize the World Cup, for example.
Other companies that appear as sponsors of teams or players are Adidas, Coca-Cola, Gazprom, Hyundai / Kia Motors, Qatar Airways, Visa and Wanda. Such partnerships are closed between teams or players and the company itself.
There is a third category of regional sponsors – that is, those who do promotion only to one location. Most of this category is from Chinese companies, including Yadea, Alfa-Bank and Sunseeker.
The pre-World Cup expectation was that FIFA would be able to win at least € 1.4 billion, 8.2% less than the one sponsored in Brazil in 2014.
Can I invest in the glass?
Only companies can sponsor the World Cup. Even if a person has a lot of money and wants to give a share to the event, for example, she could not. The investments come from companies, usually large.
To be an investor, the company needs to hold meetings and negotiations with the Local Organizing Committee of the event in order to determine where the money will come from. Each year, FIFA has been reducing its investments for the World Cup.
In 2014, the entity spent $ 2.224 billion in the World Cup. The expectation for Russia is to invest $ 2.153 billion. According to the entity, the expenses are budgeted to meet the needs of the venue that will host the World Cup.
Achievement of the World Cup
As a major event, the World Cup attracts the attention of fans and investors who want to have their brands associated with the event. From the choice of headquarters to the arrival of the first tourists, those involved in the preparation of the Cup work tirelessly to make the event a memorable one.
The players, of course, put into practice everything they trained to try to take the cup home and promote a party in the country of origin of the winner.