Friday, December 3, 2010
The World Cup
The concept of the 'Winners Curse' is common in sports. This is especially relevant with big name free agents that demand large amounts of money. The team most likely to overbid on that free agent gets an enormous pay burden placed on the team. They won the bidding, but are cursed with the contract. The same was true yesterday in the bidding for the world cup as Dennis Coates puts it (via Freakonomics).
Subscribe to:
Post Comments (Atom)
Tough to believe that there is a downside to winning. But when pinned against national pride, the "winners curse" does not compare. Dennis Coates explanation of why countries bid for such events is similar to a rich stop parent buying a xmas present for their step children. The step parent pays any price for that present because they are more concerned with buying the child's love rather than amount they shed out for this gift. The World Cup and Olympics are events that encourage national pride and to entertain the mass. Most people are oblivious to the negative economic effects of hosting these events because they are overflowing with excitement and national pride. But in the end a country has to hold these events and so congrats to those who win and congrats to those who tried.
ReplyDeleteMichael Lam MWF 2-250
I was in Europe for the most recent World Cup and I must say it opened my eyes to the world of soccer. Every I went there was team apparel being sold, talk of the games, and if there was a television, the cup was on it. Despite being surrounded in the mega event, I could not tell you the exact city of the 2010 World Cup. Hosting the Cup is said to give publicity and therefore produce economic profit from interest in the country. As an American who never played soccer, I was clueless about the popularity of the sport in other nations and the host city did not captivate me to visit as they hoped when bidding. Having done my position paper on the economic impact of hosting mega events, I fully support the evidence that hosting games it detrimental to the city, in other worlds the cities who receive the winning bid are losing.
ReplyDeleteTom Weisenbach T,R 8am
ReplyDeleteThe intangible benefits of winning the bid for the world cup are obvious. Unfortunately the feelings of prestige and national pride that the world cup provides will be replaced by the feeling of the great financial burden that hosting these events will cost in the long run. While it may seem like hosting an international event will bring in lots of new revenue from creating new jobs, building new stadiums, and attract more tourists to come and spend money. The reality is far from that however. Because the World Cup is watched by the entire world, and the countries reputation is at stake, they are gonna spend as much money as possible to make the event look as epic as possible. The hosting countries will always spend as much money as they can to put on the best show, and the return is almost always less. I'm also glad that America is not burdened with hosting the World Cup, because what this country needs right now is to cut government spending and the majority of the funding from this event will come from the government. The world cup is just another bad excuse to spend valuable government money and resources, and historically the return never equals the input.
Daniel Moore MWF 2:00pm-2:50pm
ReplyDeleteEconomist Dennis Coats quickly and even sarcastically shares his thankfulness for the United States not winning the bid to host the 2022 FIFA World Cup games. When viewing the issue strictly from an economist point of view there is evidence suggesting that the benefit of hosting a world-wide sporting event does not outweigh the costs. However, there are several immeasurable economic benefits that Coats did not consider. Some of the benefits that can not be measured by numbers include worldwide exposure, publicity, and national pride which may provide overwhelming economic benefits in the future. I believe that Dennis Coats is being one-sided on this issue, and not considering any of the positives that can arise. Furthermore, the United States has not hosted any major national sporting events since the attacks of 9/11/2001. By hosting the FIFA World Cup, the U.S. would be making a statement regarding the growth of our national security as well as our good public relations with the world.
Terrie H
ReplyDeleteMWF 9-9:50AM
This article struck a nerve; the World Cup, Super Bowl, World Series, and the Stanley Cup are for entertainment purposes. The only thing these events offer is morality to the fans and a fat check to the promoters, team owners and players. For example; we have several local sporting franchises in Philadelphia like the Phillies, Flyers, Eagles, KIXX to name a few, and none of these teams have change the status of the local recession, let alone the state wide job shortage. The winner’s curse, seriously!! Mr. Coates why don’t you suggest that the World Cup solve the World hungry problem while you are at it. The World Cup is no different than entertainers such as Madonna, Lady Ga Ga, and Cher touring the country, they are not pressured to save the nation’s economy, we pay them for performing and maybe if lucky, pay extra for a piece of their garment or autograph. There is too much emphasis in this article on entertainers solving our economic woes. We need to pressure the true culprits, the politicians that we voted into office.
Nick Lantz MWF 10-10:50
ReplyDeleteIt seems to be like that with all sports. Whoever wants the most prized free agent has to overpay. If a city wants the Super Bowl to take place in their stadium they have to overpay. But many times it doesn't exactly pay off (the yankees have only won one world series in the last ten seasons).