Our invoice templates are professional and sharp. Use them to directly invoice your clients and get paid fast.
The 2014 World Cup has been, by any measure, one of the most thrilling contests in recent memory, and here at Crunch Towers we’ve been so excited that we decided to thoroughly investigate its financing – because that’s what happens when accountants get excited.
This year’s contest has been steeped in controversy ever since Brazil was awarded the hosting rights in 2007. Many believe that Brazil – a country where there’s an ever-widening gap between the rich and the poor, and almost a quarter of the population live in poverty – could have spent their public money better than on what is essentially a glorified kickabout.
Public disquiet has grown over the last seven years as it became increasingly apparent that initial cost estimates of hosting the Cup were conservative to say the least. For example, the budget for building and renovating stadiums has quadrupled to over £2.7 billion, with the total cost of the games estimated to be somewhere between £6.4 and £8.8 billion.
If your first thought is “Wow, £2.4 billion is a ridiculously huge discrepancy”, that’s because the Brazilian Government have done their best to cover up the costs. Not only has this made it very hard to tell just how much is being spent, it’s also led many to accuse the Government of wide scale corruption.
The result is that the drama on the pitch has been overshadowed by the drama happening just outside Brazil’s 12 overpriced stadia, where Police have had to resort to firing tear gas and rubber bullets to subdue angry protesters.
In order to get a better idea of why many Brazilians are so angry about this huge expenditure, we wanted to find out exactly what Brazil could have bought with the money that it’s spent on the World Cup.
We’ve used the most conservative estimate of the costs, which in full is £6,491,244,217. Here’s how the expenditure breaks down.
By far the most expensive operation, the project has received much criticism as being the biggest waste of money of all the World Cup costs. We’ve calculated that Brazil has spent £2,600 per seat on stadium building and renovation costs, with the Estádio Nacional in Brasília being by far the worst value for money, costing £7,410 per seat to build.
Why is this? Well, take for example, the stadium in Manaus, where England played their first group match against Italy.
The stadium cost 25% more than projected, topping out at over £172 million. This was mainly because the city is literally in the middle of nowhere, surrounded by thousands of miles of dense rainforest, which makes the city so inaccessible that some materials for the stadium had to be transported up the Amazon river.
This map demonstrates just how far Manaus is from Brazil’s other major cities. The closest host city, Cuiabá, is 900 miles away – that’s the distance between London and Rome.
The result is the Amazonia Stadium: a beautiful, wicker basket themed, 42,000-seater stadium, which will be used for a grand total of four World Cup games. After the tournament, a stadium that huge will be completely useless for the local team, Nacional FC, who don’t even play division football and are in the Brazilian equivalent of the UK conference leagues.
Although the Brazilian Government have said the stadium will be used for concerts and visiting Serie A matches, the money could have been spent on the overhaul of Manaus’ public transportation system, which was cut from the Sport Ministry’s official list of World Cup infrastructure projects. Alas, Manaus is stuck with a huge congestion problem, and a great big useless wicker basket.
Brazil has some of the worst infrastructure in the world. Many paved roads are neglected and can’t stand up to the tropical heat – 85% of all the roads in the country remain unpaved. This has a huge effect on social mobility, as it leaves many parts of the huge country almost entirely isolated.
To put the total cost of Brazil’s stadiums into perspective, the £2.7 billion spent could have bought over 51,000 kilometres of road maintenance, according to figures acquired from Brazil’s treasury. That’s a quarter of all Brazil’s paved roads, or 1.2 times the circumference of the Earth.
Although you can argue that some World Cup expenses are beneficial to Brazil, this is one category where it really is hard to see any lasting benefit. To take a lesson from history, we can look to the 1994 Winter Olympics in Lillehammer, Norway.
Jon Teigland, a Norwegian social scientist who has studied the economic after-effects of the Lillehammer Olympics, said that 40% of the hotels built for the games were bankrupt after just a few years. It’s not unreasonable to suggest that the huge hotels constructed across Brazil’s isolated interior might suffer the same fate.
Perhaps the money spent catering for visiting football fans would have been better spent looking after Brazilian citizens? The country is reportedly suffering from a severe lack of hospitals. According to figures from international construction company Turner & Townsend, the amount of money spent on hotels for the World Cup could have bought 932,000m² of hospital, excluding labour costs. Given that the average hospital in America is just under 7,000m², that’s enough to build 135 new facilities, and increase the number of public hospitals by about 5%.
Protests against World Cup spending started way back in 2013, with nearly 700 protests taking place that year. What started as a demonstration against São Paulo’s bus fares rapidly evolved into a rage against social inequality, poor public services, political corruption, and excessive spending on construction for the World Cup.
As a result, security spending for the tournament has been huge. One of the main focuses of the protests was a bill passed in 2012 that approved £316m in education cuts. If Brazil had spent their money the way their citizens wanted, the cash spent on security would have been enough to build over 1,000,000m² of classrooms. Using Government guidance on classroom size, that’s roughly 19,000 classrooms – enough to educate over a million students.
As you can imagine, this list could go on and on. Instead, we’ll leave you with this one final statistic. If the previous examples haven’t shocked you, this one surely will. Especially if you consider that as of 2012, 15.9% of Brazilians lived on less than a dollar a day.
The estimated cost of the 2014 World Cup
The amount of basic food this money could buy
The number of Brazilians living below the poverty line
How long that much food could feed them
Photo by Gabriel Smith
From understanding expenses to starting a limited company, our downloadable business guides can help you.
If a client hasn't paid an invoice, download our late payment reminder templates and get that invoice paid fast.
They’ll all be claiming to have the best policies for small and micro-businesses, but it’s up to you to decide who has your best interests in mind.
At a time when stability is in short supply, the UK's freelancers, contractors and small businesses have woken up to an uncertain election result.
The mission at Explaain is to make it 10 times easier to read the news. Here's how Jeremy Evans built the company from the ground up & his top tips for you.