The World Cup’s Hidden Cost: Why Host Cities Pay More Than They Gain

DALLAS, TEXAS - AUGUST 7: FIFA World Cup Trophy is displayed at AT&T Stadium on August 7, 2024 in Dallas, Texas. (Photo by Omar Vega/FIFA via Getty Images)

FIFA via Getty Images

The lesson from Houston’s 2017 Super Bowl experiment isn’t just that big sporting events are expensive — it’s that the public sector often walks into these deals without a clear way to measure whether they’re worth it.

Nine years later, as 11 U.S. cities prepare to host the FIFA World Cup this summer (along with Canada and Mexico), that same ambiguity — bordering on willful blindness — still defines the economic case for public investment in mega-events.

At first glance, the pitch is seductive: Global visibility, hundreds of thousands of visitors and billions in projected economic impact. But scratch beneath the surface, and the financial logic begins to unravel. Texas’ own post-Super Bowl analysis concluded it was “impossible” to determine whether taxpayers broke even.

The best available estimate suggested a $14 million shortfall on a $22 million public investment. That’s not a rounding error, but a warning for all cities looking to host a large-scale sporting event.

Who absorbs most of the costs?

The core issue is structural. Host cities absorb most of the costs — including security, infrastructure upgrades and logistics — while governing bodies such as FIFA capture the most lucrative revenue streams: Ticket sales, sponsorships, broadcasting rights and merchandise sales.

Local organizers are often barred from tapping into those revenues, even indirectly. In the case of the World Cup, cities also faced restrictions on selling premium seating tied to sponsorship deals, traditionally a key funding mechanism.

This creates a deeply asymmetric arrangement. Cities take on financial risk while FIFA retains financial upside. That imbalance is not incidental. In fact, it is baked into the contracts, which many cities agreed to years before bids were finalized.

The fact that Chicago walked away from hosting duties now looks a lot less like a missed opportunity and more like a case of good governance. Other cities, locked into agreements they may have underestimated, find themselves grappling with rising costs and limited revenue sources.

The illusion of economic impact

Proponents of public subsidies often rely on headline-grabbing economic impact projections. FIFA and its partners estimate tens of billions in benefits across North America.

But economists have been skeptical of such figures. These projections typically rely on optimistic assumptions: That large numbers of out-of-town visitors will flood host cities, that their spending represents entirely new economic activity and that the event won’t displace other forms of tourism or local consumption. Even basic indicators, like sales tax increases, fail to make up the difference.

A recent investigation co-published with the Houston Chronicle and The Texas Tribune found that Texas taxpayers will likely will be on the hook again when Houston and Dallas hosts the World Cup. The cities are among 11 in the United States that have agreed to host matches costing hundreds of millions of dollars in costs, subsidizing a World Cup that FIFA has said will generate $11 billion in profits for them.

Many host city contracts remain top secret, with financial details redacted or withheld entirely, from the public. Nonprofit organizing committees — tasked with executing the event — fall outside public disclosure laws, further limiting transparency.

This lack of visibility is not just a governance issue; but has real fiscal implications. If organizing committees fall short in fundraising, it is often unclear who ultimately bears the burden. Public officials often express confidence that private funding will cover costs, but those assurances are difficult to verify without access to full financial data.

Meanwhile, taxpayer support continues to flow through mechanisms like Texas’ Major Events Reimbursement Program, which has distributed hundreds of millions of dollars over the past decade despite repeated findings that its economic impact cannot be conclusively determined.

This is a reason why New Jersey has been forced to raise roundtrip train fares to MetLife Stadium, which will also host the final on July 19, from New York City to $150 from the typical $12.90. If not, it would lose millions and millions due to having to absorb the cost of running extra trains and increased security.

NJ Transit CEO Kris Kolluri said the state agency has a $200 million deficit, insisting this is “not profit making or gouging — we are trying to recover the cost.”

Why cities say yes

Given the risks and uncertainties, why do cities continue to pursue events like the World Cup?

Part of the answer lies in intangible benefits like international exposure, civic pride and the hope of long-term tourism gains. These are real, but difficult to quantify —and even harder to justify as a basis for large public expenditures.

There’s also a competitive dynamic at play. Cities fear missing out, especially when rival regions are willing to accept those same terms. This creates a race to the bottom, where governing bodies like FIFA can dictate increasingly one-sided agreements.

Finally, there’s political calculus. Hosting a global event is a visible, high-profile achievement for local leaders, even if the financial returns are murky or deferred.

If history is any guide, the 2026 World Cup will likely deliver a mixed outcome for host cities: Clear benefits for specific sectors like hospitality and entertainment, but ambiguous — even negative — returns.

The more troubling pattern is not that these events fail to generate value, but that governments continue to invest in them without the tools to rigorously evaluate their impact.

When, after dozens of subsidized events, officials still conclude that neither a positive nor negative effect can be determined, the problem is no longer analytical. It’s structural.

Until cities can negotiate more balanced agreements, demand greater transparency, and apply stricter standards of economic evaluation, the cycle will continue: Big promises, bigger spending and an enduring inability to say afterwards whether it was all worth it.

Clemente Lisi is the author of “The World Cup: A History of the Planet’s Biggest Sporting Event, 2026 Edition."

This article was originally published on Forbes.com