Adam Beissel (@ExtraBeissHit) is a professor of sports leadership and management at Miami University. His primary research interests include: the political economy of Sport Mega-Events; Global Politics of International Sport; Sport Stadiums and Urban Development; Social and Economic (in)justice in College Sport; Sports Labor Markets and Global Athletic Migration. Beissel is currently working on two interconnected and interdisciplinary research projects critically examining the cultural and political economies of the 2023 FIFA Women’s World Cup joint hosted by Australia and New Zealand and the 2026 FIFA Men’s World Cup joint hosted by the United States, Mexico, and Canada.
Episode Description
What does 2022 have in common with 2018 and 2026? What is special about 2023? These years include a month where work productivity will be reduced in many countries around the world. Each year will have a month when attention is split between work email and the most beautiful game. Soccer’s (aka Futbol’s) World Cup once again draws the attention and passion of much of the world. Today’s episode focuses on the economics of global sporting events with guest Adam Beissel.
+Full Transcript
John Bailer
What does 2022 have in common with 2018 and 2026? What is special about 2023? These years include a month where work productivity will be reduced in many countries around the world. Each of these years we'll have a month where attention is split between work email, and the most beautiful game. Soccer aka football's World Cup once again draws the attention and passion of much of the world. Today's episode focuses on the economics of global sporting events. I'm John Bailer. Stats and Stories is a production of Miami University's Department of Statistics and media, journalism and film as well as the American Statistical Association. Joining me on the panel is Regina Nuzzo, professor at Gallaudet University and freelance science writer, Rosemary Pennington is away. Our guest today is Adam Beissel, Professor of Sports Leadership and Management at Miami University. Adams primary research interests include the political economy of sport mega events, global politics of international sports sports stadiums and urban development, social and economic justice or injustice as it may be in college sport, sports, labor markets and global athletic migration. Wow, I get tired just even thinking about trying to think about all those things at once. You know, Beissel is currently working on two interconnected and interdisciplinary research projects critically examining the cultural and political economies of the 2023 FIFA Women's World Cup jointly hosted by Australia, New Zealand, and the 2026 FIFA Men's World Cup jointly hosted by the US Mexico and Canada had them to start a conversation. The World Cup is clearly a mega sporting event. I'm just curious, before we dive into some of those details, what was your career path that led you to investigate the economics of sport?
Adam Beissel
Yeah, well, thanks for having me. That's a terrific question. It's an interesting one, because I wouldn't consider myself a sport economist in a classic sense. My academic background is actually in sports sociology, and the overlap between sports sociology and management. So I come at economics much more from a social science perspective, really interested in the field of behavioral economics, how biases and heuristics kind of influence decision making, and really situating decision making in context. And that's where the sociologists in me kind of come in. And so I'm really trying, in my professional life, to contextualize events, activities, moments within the sporting domain to try and make sense of them in everyday life.
Regina Nuzzo
So Adam, let's talk about this World Cup. And I'm going to warn you that I don't know very much about sports. So the Men's World Cup is 2026. And host cities have already been chosen? If so, who are they? Or are we still in the bidding process for that? What's up?
Adam Beissel Yeah, so the 2026 FIFA Men's World Cup will be jointly hosted by the US, Mexico and Canada, it will be the first time the men's World Cup will have 48 teams, it's the first time three nations have co hosted. And it's really sold when it was voted to be the host in 2019 as this continental affair brought together three nations in a perhaps political context in which those nations weren't on such great terms as a way to use football to unite an entire continent. So the entire nature behind the joint bid was a little bit strategic, it was a little bit political, but it was also functional in that there are now going to be for the 2026 World Cup 48 teams, so it'll be the largest one ever, and you just need a number of host cities and host sites to accommodate the size and scope of that event.
Regina Nuzzo 3:54
That's kind of crazy. So spread out over three countries we're talking like really spread out and so where are the cities? How many cities and where are they? What are they?
Adam Beissel
So when FIFA typically decides on where the World Cups will be hosted, the general history has been for countries to compete against one another. As a byproduct of recent reforms within FIFA and recent scandals that have kind of plagued its short history here. There were really only two candidates to host the 2026 Men's World Cup. It was this joint bid in North America and Morocco. And in some ways the Moroccan bid. It kind of fit the old model of where FIFA has been for the past few World Cups in which it was a nation that doesn't really have the infrastructure, the stadiums, the commercial potential to host it right away. And so the North America World Cup bid offered FIFA a seemingly ready made World Cup; it already had the stadiums. It already had the infrastructure and crucially it already had the commercial potential that FIFA was looking for. So the competition To host externally really wasn't fitting of the the types of competition that FIFA had had previously, where the competition came into play was once they awarded the bid to North America, which cities within North America are going to put together the best deals to attract FIFA attention to get the hosting rights for individual games in.
John Bailer
Regina, this is where the pain point hits for those of us that live in southwest Ohio, because Cincinnati was actually one of the cities that was being considered. It was in the running. Yeah, we were running. And we just found out that we didn't make it. Oh, yeah. So I'm curious, when these decisions are being made, you know, we're the stats and stories podcast. So I gotta, I gotta think there's maybe some statistics behind this story. So can you tell us a little bit about what kind of data that maybe was being considered as the cities were being filtered and selections were made?
Adam Beissel
That sort of say there were kind of three things that were the main focus of this clearly, it was about which cities would offer FIFA the proper and requisite guarantees that they required. So cities will be required to put up all the money for security costs, provide mandatory tax exemptions, provide certain visa, immigration bypasses, if you will. So there's all these guarantees that the cities have to provide to FIFA. Some of those guarantees also include required stadia size stadia infrastructure, they need to have grass pitches. And so in kind of political terms, you have to guarantee the requirements of what FIFA wants. But you also then have to provide certain economic guarantees because if you put these games in the biggest markets within North America, you can charge higher ticket prices because there's higher demand, and therefore FIFA generates more commercial revenue. Now we can critique FIFA and say, well, they're just in it for money for profit. But the way FIFA operates is that the more money they make from hosting the Men's and Women's World Cup, their economic model is that they then believe that it trickles down to member associations. So FIFA gets all this revenue and revenue maximizes from putting the biggest games in the biggest cities and the biggest stadiums across North America. They then can issue grants and funding to all the member associations all around the world to facilitate, in their view, more grassroots playing and more opportunities for women to join football Federation's. And in their view that that money trickles down through the football pyramid.
John Bailer
So how many associations are there worldwide that play into this?
Adam Beissel
There are 211 football associations that are members of FIFA. So whatever money and I believe the estimates, and again, we want to, we don't want to take these estimates at face value, but the estimates are about $14 million, $14 billion of commercial revenue will be generated by the North American World Cup, the expenses. And again, it's hard to calculate those expenses because the expenses for building stadiums have already occurred, the expenses for security are going to be absorbed by the cities themselves. So FIFA stands, in my estimation, in kind of previous research to gain most of the commercial benefits of perhaps eight to $10 billion that they can then distribute to all those 211 member associations.
Regina Nuzzo 8:24
What about the studies? Adam? What's in it for the study? It wasn't just tourism, hotels, what?
Adam Beissel
So, this is where we as again, sport economists or the literature in sport economics, tries to parse out the fact from the fiction, most of economic benefit analyses are done before the event. And they are commissioned by the tourism and hospitality industry. I have no interest here. Come on, right. Yeah. And so it's really hard to get a grasp on these things. And to be fair, for the representatives of every city, it's hard to really get an idea of what is going to be the benefit for the city. The literature tells us in the end that there's not going to be much net new tourism, most of the people in the cities that are going to go to the World Cup are already residents of those cities, there will be some tourism, but the economic impact will be far less than predicted. The general rule of thumb by sport economists is to move the decimal point one place to the left for all economic impact studies. That being said, there will be some economic impact, but it will be a lot less than these tourism commissioned studies that have an inherent self interest in promoting the outcomes of these things.
John Bailer
Yeah, I think that's a really interesting discussion because I had the opportunity to go to Brazil before they were hosting the World Cup there. And now we have a World Cup this year. And in both those cases, there were new venues being built and planned. And at least the story that came out of Brazil is that some of those venues may have hosted three games and are now bus parking lots So the cost may have been quite high and the return on that not so high. So. So can you talk about what's expected for this year and how that might play out and in light of the comments you've made about the economics of this?
Adam Beissel
Yeah, so Qatar 2022 was decided based on bribes and kickbacks of the 35 voting members at the time of the FIFA Council. All but two have been criminally indicted for racketeering, money laundering, and that includes former FIFA President Sepp Blatter. So Qatar was awarded the Men's World Cup of 2022, based on bribes, the proposal at the time had called for all fully domed air conditioned stadia to host these events. But those haven't quite come to fruition. And as a byproduct of the extreme heat when the World Cup was meant to be hosted right now. They had to move the Men's World Cup in 2022, to November to avoid extreme and utter exhaustion, which just that in and of itself, kind of speaks to how ludicrous it was that Qatar was going to get a World Cup in the summer months in the blazing heat. And so they moved it and it'll now be in November of this year, giving a full break to all football around the world. Every footballer that's playing in the professional leagues is going to stop playing abruptly in the middle of the season, go back to their countries and then represent their countries at the World Cup set the time bribed FIFA officials to have the World Cup held in a place that they might not have really been prepared for.
Regina Nuzzo
And according to what you're saying, sports economists are kind of dubious about the benefits in the first place. Is it? So we're talking like name recognition? Why wouldn't they even do this?
Adam Beissel
You have a concept that most of us and I think it's becoming increasingly increasingly popularized in the literature is the term sports washing. And so it is similar to greenwashing. It's this use of sport and high profile sport to create a kind of favorable geopolitical, good will and image, right. It's image branding for nations. And we've seen that particularly play out in the context of football lately, where you have governments or private wealth funds of Saudi Arabia, United Arab Emirates, purchasing football clubs themselves, using them as a branding exercise, adorning the kit sponsor on the front of the shirt with the companies that they also own right, so conglomerates, so you own the football team. But then the airline that you also own as a country becomes the primary kit sponsor. And so one of the ways that they've gone about this sports washing has been through the ownership of professional clubs like PSG, Manchester City and few others, as well as then using high profile international sport mega events like the World Cup, to to kind of advance that goodwill, that image branding, within global geopolitics. We even saw that with Russia, right. So Russia hosted the most recent version of the Men's World Cup, and hosted the Olympic Games in Sochi, a part of the same sort of theory was, well, we can bring people here, oh, Russia is not so bad. But look at this country, we can relate to them culturally, politically. And it shouldn't surprise us then that just after the Sochi Olympic Games was when Putin invaded the Ukraine, for the first time, the Crimean Peninsula for the first time, right, building off of that goodwill and sort of not getting much pushback from the international community, just two weeks after the Sochi Olympics had ended. And there was that sort of thrust of diplomacy.
Regina Nuzzo 13:41
So if I'm the mayor of Cincinnati, then, hey, we're not that bad. We just have to walk up to that idea. Yeah. So
Adam Beissel
I think for me, and a lot of sports, economists would acknowledge that the economic benefits of hosting a sports mega event, they're just not really there. There are some, but they're not going to be nearly the windfall that they otherwise would be. The literature is a bit mixed on what we would call the world class city effect, right? The feeling of well, we get some sort of civic pride or civic identity from Cincinnati hosting a World Cup event. There is some truth to that. The question is, at what cost and in the context of Cincinnati, there was a minimum requirement of about $10 million for stadium upgrades for Paul Brown, as well as then probably another 30 to 50 million, just in terms of operating costs, security costs, so you're looking at about 50 million again, those are preliminary projections. We know from the literature, Andrew Zimbalist tells us that sport mega events go over budget by about 176%. So they're almost double of what they're projected to be. But even if we take it at face value, even if we say this was a $50 million cost for Cincinnati, there would be some money reaps, in return through the tourism and things probably not as much as we think, is the feeling of civic pride, and this world class status worth it? I think, for me, if we can have those debates, I think we're probably going to be a little bit better informed, rather than the debates around, hey, this is gonna be an economic windfall, we're gonna make $400 million, et cetera, et cetera.
John Bailer
Yes, it seems like from what you're saying that, that when you have a bunch of existing venues, you're not going to lose as much money that's kind of and then what you're talking about these other components, it's very difficult to monetize an attitudinal shift as a consequence of the pride one might field for their city being a host.
Adam Beissel
Exactly. Yeah, I think what we're seeing now within the staging of international sport mega events, so we're talking primarily about the Men's and Women's World Cup, and we're talking about the Summer Olympic Games, those organizations, so the IOC and FIFA have really turned to countries predominantly in the West, or liberal democracies with already existing infrastructure stadiums, and the necessary kind of supporting infrastructure and mechanisms to deliver those events. Whereas we could kind of argue the previous era for both associations, the IOC and FIFA had really been about going to new countries and building things, right, this kind of global placemaking, where you build these massive stadiums, these massive villages. This decade, the 2020s is going to be increasingly defined by World Cups men's and women's and Olympic Games. We're talking about Paris, 2024, and Los Angeles 2028, going to nations that are quote, unquote, ready made. Now, I would sort of argue that those stadiums didn't just happen, right? Those stadiums didn't just exist, they each have their own unique histories, many of which have been sources of public funding. There's massive opportunity costs of building stadiums as opposed to funding roads and bridges and schools and teachers and police and all the other things that a government might fund. But I think the point stands is that the word is moving toward a model? Is it sustainable? Is that the impetus here that they're trying to go to a more sustainable model? Or is it that if you already have existing infrastructure in stadiums, it becomes more profitable because you don't have to build them? And that doesn't have to come out of your revenue? So that's really the kind of question that I'm trying to wrestle with.
John Bailer 17:25
You're listening to Stats and Stories. Our guest today is a professor of Sports Leadership and Management and by itself. So as you've been talking about some of these decisions, how about talking about the 2023 Women's World Cup, and some of what were some of the dimensions that led to Australia, New Zealand, being these dual hosts?
Adam Beissel
It's funny you asked, I was just this morning working on a publication around the bid context between Australia and New Zealand, which again, was another joint bid. Partially for practical reasons, the Women's World Cup is going to be expanded as well. It'll go to 32 teams, and part of it again, FIFA is looking for optics. It sounds really good when you have three countries in North America, and a bit that celebrates unity, diplomacy, certainty. Same thing with the Women's World Cup in Australia, New Zealand, it was built, the branding campaign was as one uniting Australia and New Zealand. And so FIFA can kind of go about rehabilitating its brand post scandal by saying, Look, we're bringing people together. We're about sport for the social good. And so part of the attractiveness of Australia New Zealand was one that could accommodate a bigger world cup so they could communicate the values and the vision for FIFA of cooperation, diplomacy, partnership, and three, again, ready made infrastructure. They don't have to build any stadiums and it furthers FIFA's agenda for commercializing the Women's World Cup.
Regina Nuzzo
I read recently that the World Cup bonuses have changed the whole structure. What's that?
Adam Beissel That's a great question. And one that has been the topic of a lot of books and articles and media reports highlighted particularly by the US Women's National Team, pay equity dispute, right? And a lot of that comes back to honestly FIFA, everything we've said about the Women's World Cup and the Men's World Cup, the primary way that FIFA makes money off of these things is by selling broadcast rights. And for a long time the women's broadcast rights were sort of just given away with the men's broadcast rights. So it's been hard to in FIFA, his eyes directly trace what the revenue of the women's game would be, and therefore allocate that to women's football through the member associations. However, if we look at the ratings for the Women's World Cup, it gets about a quarter of what the men do. So if you divide the total sum of the four I think it's $4 billion Men's broadcast rights for the World Cup. And if you divide that in fifths and sort of attribute a fifth to the women, it kind of tells you that women's broadcast rights are close to a billion dollars, which is way more than FIFA actually estimates. Just a few months ago, FIFA has now decided we're going to separate the bidding for women's broadcast rights and men's broadcast rights. And I think we're gonna see the value of the Women's World Cup, which should, in theory, solve some of the issues that FIFA has identified with, well, the Women's World Cup just doesn't bring in any revenue. Well, we know that's kind of false. Because ironically, what we've had was the Women's World Cup broadcast, right subsidizing the men's game, because it's been a quarter of the overall viewer show. Interesting. So there is a risk associated with it if you parse out that bidding. But I think in the end, it's going to leave an opportunity for FIFA to then address some of these nation level Federation concerns within those respective countries.
John Bailer 20:58
So this sounds like it's connected to some of your interests in terms of social and economic justice and sport. So you know, this is in the context of this national competitive scale. But you've also had some interest in terms of this more local scale in terms of collegiate sport, can you give sort of examples of what social and economic justice and studying that in college sport look like?
Adam Beissel
I think we've seen a tremendous change within the collegiate sport landscape in just the last three to four years, we've seen the adoption of NIHL. So named by name image likeness, which means that collegiate athletes can now profit off of their own name, so they can endorse products, they can sign contracts with agents, and everything changes so much, it's really hard to keep up. It is, in my opinion, an incremental step toward full employment of those athletes, which I think it's probably going to happen. And there's a ton of work in the sport economics field on the value of an NCAA division one basketball player, I think David Berry has found that the average Division One Five Star recruit is worth $700,000 per year. But a scholarship is far less than that, right? Even women's basketball players, I think, a five star women's basketball recruit, if you do the kind of wins above replacement model and win shares model, apply it to women's college basketball, the best women's college basketball players are worth about $150,000 per year, which is far less than they're compensated through their grant and aid and their scholarship. And so part of what I'm interested in and have historically been interested in is how can we get a kind of more of a labor theory of value approach here where athletes apart across the collegiate landscape are earning What is a greater portion of the revenue that they're producing? We're seeing some progress in that realm. Although it's not the universities themselves that are compensating, it's through name, image likeness, everything I say here is probably going to be changed within six months to a year from now. It is really evolving. But I think we've seen now the awareness that look, the NCAA is a commercial behemoth March Madness makes billions of dollars a year and for the most part, most of that money has gone to coaches and the gold plating of athletic departments. So building facilities and I think the realization is now that well, we can give it a higher portion to the athletes, even if initially it's through name image likeness.
Regina Nuzzo
Do you mind if we get philosophical for a moment and talk about sports? Why do we care so much about sports? The action? Is it money, the ancient Olympics in the Greek sports, they gave out olive oil as a prize? We're doing far more than olive oil. What is it?
Adam Beissel
Sport is a cultural universal, you go to any country around the world, and it has its own distinct, unique sport culture. You go to different regions across the United States, right? The US South is very college football, the North is much more baseball and you go to different pockets around, you've got little rugby pockets here, or maybe even a cricket pocket somewhere else. So sport, it tends to not only define who we are, but it's a core source of our identity, wherever we go in the world, and I'd say, you know, for better and for worse, right? It's a it's a source of pride and identity and belonging, but at the same time, it can be exclusionary, discriminatory, and so we see the best and worst of ourselves in sport, but rest assured, we go anywhere in the world, and they have their own distinct, unique form of sport culture, and it's not really any different than any other cultural institution music, movies, art. It's just a form of expression and it gives us a sense of identity and belonging.
John Bailer
Now I got to ask this because I've been wanting to ask you this probably for quite a while. And it's the idea of, of how sport looks in different countries can be very different and that the one that really stands out to me, is the idea of in many leagues around the world. You can be relegated to lower divisions. If you don't play well. You can be promoted to higher divisions if you do. Whereas, you know, there's no league that I know of in the United States other than youth sport leagues where that might be true. So why is it acceptable to have this idea that in a professional level, that, you know, poor performance is punished, excellence is rewarded, versus, you know, in most of the US sport, professional sport? You know, the worst team gets the best picks? It's such a different orientation. How does that work? Culturally? sociologically? I mean, how did that play out,
Adam Beissel It has a long history associated with it. And really, what you're referring to is, I think, in the literature, we call it a closed system versus an open system, right. And so in the Premier League, so the the most commercially visible league in the world, that's the soccer league in the UK, and primarily, England and Wales, the bottom three teams are quite literally kicked out of the league, down to the lower division, and the three best teams from the Division below get promoted every year. And so throughout the season, you are as a team trying to win every single game for fear of getting relegated in the Premier League, the significance of that is about $120 million per year. And that becomes the difference between what your broadcast revenue is in the Premier League versus that lower tier. And so you are scrapping, you are fighting, you are calling to not miss out on that. Because immediately, more than 75 to 80% of your revenue is just cut off, right. And so think about what that means in terms of your workforce, your players and how you operate. And what that does is it creates excitement. And sport becomes a bit more meritocratic in that sense that the teams who are winning or have deserve to stay in the league and those who don't get kicked out. Now, I would say to your question of why does this take place? You know, what, what I like to think of and what we talked about is that sport is both the product and producer of a given society. So the ways in which we structure sport in North America are very much linked to American ideals, American capitalism, and this idea that sport exists for business, right? And if I stood in front of my class, and I said, Yep, sport exists for a business, everybody was like, yep, yep. Now, if I said that, in other places around the world, I might get like a shoe thrown at me or a tomato. Sport is not a business it is, you know, it's a club, it's a group of our support, etc. By having a closed league in North America, what it means is, it is basically a cartel, it is legally identified as a cartel. And because there's an exclusive 32 teams in the NFL, and we know who they are going to be every single year, that creates value for the owners, because no matter what they can count on that broadcast revenue coming in relatively high ticket sales. And so the reason why we have closed is because of the kind of corporatized nature of American society, and trying to keep this as a close knit group, which increases franchise values.
John Bailer
Well, I'm afraid that's all the time we have for this episode of Stats and Stories. Adam, thank you so much for joining us today. Stats and Stories is a partnership between Miami University’s Departments of Statistics, and Media, Journalism and Film, and the American Statistical Association. You can follow us on Twitter, Apple podcasts, or other places you can find podcasts. If you’d like to share your thoughts on the program send your email to statsandstories@miamioh.edu or check us out at statsandstories.net, and be sure to listen for future editions of Stats and Stories, where we discuss the statistics behind the stories and the stories behind the statistics.