One month to go for the much-hyped Club World Cup, a revamped quadrennial competition featuring 32 teams chosen from across the federations through a selection process based on a four-year performance led ranking pathway or by winning continental titles between 2021 and 2024. This new high-revenue generating version of the tournament has been in the limelight ever since it was announced about its potential impact on the club finances, the lack of broadcast partner till the last moment, the crunched schedule and so on. The tournament also has its share of advocates too talking about the best teams, best players across top club teams from FIFA’s different Confederations playing against each other which normally wouldn’t be seen, a huge opportunity for smaller clubs like Auckland FC to compete on the global stage and get handsomely rewarded for that and so on.
It is ambitious, revenue generating for the participating clubs and exciting to watch. Our earlier blog on the big ticket FIFA Club World Cup 2025 had an analysis on the prize money, broadcast partner and other details.
In this blog, we look at the other end of the spectrum, the tournament’s supposed economic and geopolitical impact.
Economic Impact
What really is an economic impact? The Oxford Reference says “The impact or effect on an economy (of a place, region, or country) of a particular activity, project, or programme”. In the case of sports, it is a culmination of direct and indirect economic benefits of the sports event or the league in a particular country.
From national to international sporting events, economic impacts are immense. In 1994, the U.S. reportedly spent $500 million on hosting the FIFA World Cup. From there to 2022 in Qatar who spent a whopping $220 billion for the 2022 FIFA World Cup. Now, all the amount spent includes the infrastructure of the cities too, aimed at contributing to a long term economic growth of the nation.
How is the economic impact seen regarding the Club World Cup 2025?
According to the socioeconomic impact report released by FIFA, key figures are very interesting from the host country’s point-of-view:
- Total expected attendance: 3.7mn out of which 1.8mn are expected to be locals and as much as 1.9bn international fans.
- Event related expenditure expected: $7.2bn
- Main economic impact (gross output): $17.1bn
- Full-time equivalent jobs or expected employment: 105k
- Adding to GDP: $9.6bn
- Government revenue by way of direct and indirect taxes: $1.9bn
- Social return on investment: 4.34
Further according to the report, the expected outcomes in terms of monetary benefits of the event is expected to be $3.36bn out of which tourism sector, as always, becomes the biggest beneficiary, expected to be as much as 72% or $2.43bn of the total benefits. The expected influx of international visitors is likely to generate billions of dollars in economic activity, benefiting the hospitality, transportation, and retail sectors and also expected to boost the host cities as global tourist destinations.
Geopolitical Impact
Sports is unilaterally an important tool in geopolitics. The massive opportunities presented by sports as a source of power, political, economic or even cultural influences is undeniably one of the biggest. Club World Cup 2025, being held in the USA, too comes at a time when there are heavy undercurrents of political and economic strife in relations between the host country and others including the participating countries. Various factors will be at play during the tournament, but the biggest will possibly be the following two factors:
- The present administration’s rather debatable method of immigration crackdown has been arising a lot of tensions lately. The statements by administrations top people on consequences of overstaying after the World Cup paints a shrewd character for the Club World Cup hosts. This comes when there are expectations of 1.9mn international fans for the tournament. Cause of worry?
- The other factor possibly in play might be the ruling administrations “tariff wars”. It might be important to note here that 14 clubs representing 5 countries from the Asian and African continents and the entire EU based countries had been slapped more than 20% which was later reduced to 10% under a 90-day pause. How is it going to affect the fans coming from these countries?
Geopolitical impact on sports has to be considered ever so much more now. SBI has organised a webinar on how is sport shaping global power dynamics with the brilliant Prof. Simon Chadwick. Join us on Tuesday, May 20 at 8:00 p.m. (CET) / 7:00 p.m. (UK)
In Conclusion
The Club World Cup 2025 tournament has its own share of controversies and dissents and can be called FIFA’s big bet on creating a coveted property. On the face of it, the competition has its own benefits and only time will tell how it is taken by the fans, both as a tournament and the host country for its experience.
It can become a precursor to what’s expected for the big FIFA World Cup in 2026.
