Big sport doesn’t often pay

Whether it’s the World Series, the FIFA World Cup 2026 or the ICC Men’s Cricket World Cup 2023, the promise of hosting a mega-sporting event is that the economy will emerge as the true winner. From soaring ticket prices to packed hotels and restaurants, the narrative is seductive: open the gates, welcome the world, and prosperity follows. But as the evidence increasingly suggests, the reality is  far more nuanced.

A recent example: this year’s World Series featured resale ticket prices running into the hundreds of dollars and local hospitality sectors reporting a surge. Stand-alone, that appears a win. Meanwhile, Canada’s co-host role for the 2026 World Cup (alongside Mexico and the United States) is already being hailed in city forecasts as the next big economic bonanza. Yet beneath the fanfare lie questions of leakage, displacement and legacy.

The logic driving bids is straightforward. Visitors spend on accommodation, food, transport — generating direct revenue for local businesses. Suppliers benefit indirectly; employees spend their wages locally, creating induced effects. Then come the intangible gains: global media exposure, enhanced national branding and an elevated  investment profile.

These outcomes are compelling. For cities and regions they promise tourism growth, improved infrastructure and a civic uplift. But tourism and event scholars warn that the so-called multiplier effect must be treated with caution. Meta-analyses show that outcomes are highly variable and long-term benefits are frequently over-estimated, with substantial sums lost to what economists call export leakage: profits flowing out of the host economy to non-local companies, organised agencies or international event bodies. Similarly, tourism displacement can offset gains, as regular visitors steer clear of crowded, expensive host destinations. A key critique is that many impact studies are commissioned to legitimise political ambition rather than critically assess economic truth.

Take the Blue Jays playoff run in Toronto. Local hospitality sectors reported stronger foot-traffic and retail upticks. Yet much of the benefit reflected a one-time burst of spending, and economists caution against assuming structural change. Households often reduce spending elsewhere to finance tickets and event-related costs; jobs created are short-term and service-centric rather than transformative.

In short: the “win” is real, but fleeting. The real test is whether cities can channel that momentum into lasting change — rather than treat it as an isolated boost.

India’s hosting of the ICC Men’s Cricket World Cup 2023 offers a revealing case. A report by the International Cricket Council (ICC) placed the total economic impact at US$1.39 billion (≈ `11,637 crore). Of this, tourism in the ten host-cities alone contributed roughly US$861.4 million. The event also claimed to have created thousands of jobs in the hospitality and retail sectors.

The takeaway for India is this: such a sum is significant – but it should not be mistaken for structural change. As India contemplates future mega-event bids (including a possible Olympics), the key question is whether the infrastructure upgrades and visitor influx convert into sustained tourism, business investment and local enterprise growth.

Canada’s role in the 2026 World Cup underscores the promise and pitfalls of mega-events. A staff report for the Greater Toronto Area cites potential positive economic output of up to CAD 3.8 billion (≈ US$2.8 billion) for Canada between June 2023 and August 2026. Toronto’s own background note emphasises enhanced business activity, tourism, jobs and local business uplift. 

However, these remain projections, not guaranteed outcomes. And host cities such as Toronto or Vancouver already enjoy strong global visibility — meaning the incremental reputational gain may be modest compared with less-established cities.

For India, this translates into a policy warning: recognised destinations may see smaller marginal gains, while emerging cities could leverage a mega-event for real visibility if matched with the right legacy strategy.

The expenses are often vast. Infrastructure spend, security arrangements and event delivery typically rely on public funds. While jobs are created, these tend to be short-term and low-wage. In many cases, the “opportunity cost” is what the public sector did not spend — money diverted from schools, affordable housing or health services might have delivered higher long-term social returns.

Then there is the environmental cost: global fan travel, construction of temporary venues and heavy energy usage produce significant carbon footprints. Unless the planning embeds sustainability and legacy use (rather than single-use upgrades), the event may incur long-term costs that offset the gains.

The crucial distinction lies not in hosting an event but in embedding it. Cities that have succeeded — for example those that re-purpose venues, upgrade transport systems and align events with broader urban regeneration — show that the payoff depends more on strategy than spectacle.

For India, the lesson is clear: any future mega-event bid should be coupled with measurable legacy goals: transit infrastructure, enhanced tourism capacity, community participation and inclusive wealth creation. Without that, the event risks being a spectacle rather than a strategy.

Mega-events can deliver measurable short-term revenue, global attention and civic pride. Yet those outcomes are neither automatic nor uniformly distributed. What distinguishes a genuine win from a mere headline is transparent evaluation, binding community benefit metrics and environmental safeguards.

As the Economist’s review of economist Andrew Zimbalist’s Circus Maximus put it: “there is little doubt that under current conditions, prudent city governments should avoid the contests at all costs.” That may read as cautionary — yet it underlines a vital truth: host cities often bear the bulk of costs while global governing bodies reap the lion’s share of revenues.

As Canada prepares for the 2026 World Cup and India reflects on the 2023 World Cup windfall, the broader policy message remains stable: mega-sporting events can bring celebration, media exposure and a short-term economic surge — but only smart policy design and focused legacy planning turn that surge into lasting value.

If India’s future bids are built around sustainability, inclusive growth and long-term urban benefit, then a sporting spectacle could indeed justify the investment. Without that alignment, these events risk being exactly what many critics fear: grand parties whose bills outlast the cheers. 

Adapted from The Conversation