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Economic Impacts

Essay by   •  April 28, 2012  •  Research Paper  •  1,615 Words (7 Pages)  •  1,512 Views

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Introduction

In present-day society, the mega-international sporting events with high profile like Olympic Games and FIFA World Cups have been evolved a social and cultural phenomenon, attracting more countries to scramble for them. The increasing number of cities bidding to host those event and the increasing funds invested in bids indicate that local leaders perceive the securing of such events as an opportunity to improve economic and social aspects of a city or region through the accumulated investment triggered by staging the Games (M. Malfas PhD, E. Theodoraki PhD and B. Houlihan PhD , 2004).

After the failure of bidding for 2018 and 2022 FIFA World Cups, there exists the dispute about whether should Australia keep battling on that? It is generally known that FIFA World Cup, as the mega-event (formerly called hallmark event) may be of short duration but it has an impact and meaning far beyond the event itself for the host city (Ritchie,1984). As Ashworth and Goodall stated in 1988, the recognition effect is often a major rationale for hosting such events. Therefore, the aim of this essay is to concentrate on effects of bidding FIFA Word Cups through selective reference to some of the literature, in order to provide information for decision-making of Australia.

The essay is divided into two parts. The subject of the first is the explanation of reasons why opponents worry about hosting FIFA World Cup. The next section illustrates benefits of World Cup, which targets on economic, social, cultural and sport aspects.

Part I: negative impacts of FIFA World Cup

The main criticism comes from the huge investment for hosting the FIFA World Cups. In bidding process before winning the event, financial recourses have been allocated ahead whether the city had won the global sport event bid or not. If this city failed, bidding fund cannot be recovered, thereby incurring the occupation of capital for other purpose. Moreover, Hall (1993) pointed that the bidding process has been appropriated to serve personal interests within the organization over and above those of sport or potential host regions, and is susceptible to corruption. These two possibilities are at the expense of contribution of taxpayers, who would bear the burden of repaying the government's more costly debt. In addition, in the stage of facility and infrastructure preparation, a large sum of fund will be allocated. Taking 2000 Sydney Olympic Games as an example, the organizers spent $1.7 billion on the construction of sporting facilities, in addition to $1.15 billion on supportive infrastructure (NSW Government, 2001). However, the investment of FIFA World Cups is not only a one-off program, which just happens during the event period, but also has long-term benefit, especially the established infrastructure.

Part II: positive impacts of FIFA World Cup

More evidence seems to support hosting the mega-events such as FIFA World Cups because of the benefit in terms of obtaining international recognition, enhancing future investment, developing tourism as well as bringing more job opportunities, etc. According to the statement of Whitson and Macintosh in 1996, a mega-event can be viewed in two main respects: first, that is, primarily its duration and its scale. Secondly, it is mainly take account of its media and tourism attractiveness, and the impact on the host city. Due to its characteristics, the impacts of mega-event are huge and for a long term compare to any other events. The remainder of the essay is devoted to a consideration of the various merits which determine the necessity of bidding 2026 FIFA World Cup in the following four aspects.

Economic impacts

Preuss H (1998) claimed that the direct income of a mega-sporting event is from sources such as ticket sales, television rights and sponsorship deals. Australian government will definitely obtain income by hosting and organizing FIFA World Cups itself. For instance, only in consideration of TV rights, where the television rights for Montreal 1976 sold for less than US$30 million, only eight years later the rights for the Los Angeles Olympics brought in more than US$240 million, and by Sydney 2000 this had risen to over US$1 billion (Roche, 2000). A research by Choong-Ki Lee and Tracy Taylor in 2005 stated that per capital expenditure by foreign World Cup tourist was $2242, which was 1.8 times as much as that of ordinary foreign tourists. The economic contribution of the mega-sporting event also involves the financial benefit in the future. Firstly, the global World Cups could increase awareness of Australia, thus attracting more visitors and football fans to regard it as a tourism destination. They probably return visits the host city in Australia regardless of if there are adequate tourist attractions, and just seek for sport spirit and emotion. Secondly, through such a big event, appropriate facility and infrastructure will be established as well as improving transport system in host city. The improvement of city's landscape and physical appearance could construct an attractive investment

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