Why Brazilians Are Angry Over World Cup Spending

World Cup earnings are also hard to quantify. South Africa knows that. Two years after hosting the 2010 World Cup the South African government issued a report in which it said that it could still not put a number on the tournament's economic impact on the country. The report did say that South Africa would earn $6 billion from the Cup, but that was a mid to long term projection based on a series of unpredictable variables.

Who is the Winner in Brazil?

FIFA obviously wins. In South Africa, for example, the world soccer organization earned $2.4 billion from selling television rights to the World Cup and $1.07 billion from marketing rights. This income went straight to FIFA and not to the host country's government.

FIFA said, however, that it spent $1.2 billion on organizing the World Cup and used 70 percent of its earnings on smaller tournaments and soccer development projects around the the world, including a mayor soccer initiative that targets low income kids in Africa called "Win in Africa."

What this means is that in Brazil the World Cup will generate several winners and losers, as it did in South Africa and Germany. Here's what economists Simon Cooper and Stefan Symanski wrote about the World Cup in Brazil in their 2012 book, Soccernomics:

"The Brazilian World Cup is best understood as a series of financial transfers: from women to men (who will have more fun), from Brazilian taxpayers to FIFA and the world's soccer fans, and from taxpayers to Brazilian soccer clubs [who benefit from new stadiums and marketing for soccer] and construction companies. Possibly Brazilian society deserves these transfers. Still, we have to be clear that this is what's going on: a transfer of wealth from Brazil as a whole to various interest groups inside and outside the country. This is not an economic bonanza. Brazil is sacrificing a little bit of its future to host the World Cup."

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