FIFA says the World Cup will be big for the North Texas economy. Experts aren’t so sure

From KERA News:

Dallas is projecting at least $1.5 billion in “economic impact” for the region.

FIFA is projecting over a $30 billion impact for the country as a whole, 185,000 new jobs and healthier people due to the increase in physical activity.

Those are some big claims about the 2026 FIFA World Cup.

They’re also likely exaggerated, some experts told KERA News.

Large international sporting events usually result in only a modest bump in economic activity, which can be offset by security costs, they said.

Even President Donald Trump at a White House event with FIFA President Gianni Infantino last year sounded suspicious.

“It’s expected to drive more than $30 billion, Gianni, I don’t know about that,” Trump said. “That sounds like a lot of money, are you sure?”

The true benefit of the World Cup may come from getting the region in front of hundreds of millions of eyes, some experts said. But even that is hard to quantify.

Meanwhile, questions remain about how cities like Dallas will economically benefit from the games — especially considering the games take place at AT&T Stadium, temporarily renamed to Dallas Stadium during games but which is based in Arlington.

Will Dallas benefit?

Cullum Clark, a professor of economics at Southern Methodist University, said the games will likely have a modest economic impact on the city.

“I guess they’d have something of a little boomlet in sales tax revenue that lasts for a few weeks, and then it just goes back to where it was before,” Clark said. “So in the grand scheme, it doesn’t really matter that much.”

Clark said the real economic benefit comes when a city starts investing in itself so it’s a viable option to host World Cup matches in the first place.

That means robust airports, highways, public transportation and an entertainment district.

Dallas itself is projecting a $3.5 million bump in sales tax revenue, a city spokesperson told KERA. Hotel Occupancy Tax revenue, which will largely go to Visit Dallas and the Kay Bailey Hutchison Convention Center, is expected to increase by about $6 million.

It’s not clear yet how much of that $6 million boost will actually materialize as hotel bookings have fallen short of expectations, KERA previously reported.

Dallas is budgeting to spend more than $32 million on police, emergency services and management for the matches.

Host cities are required to provide security for the matches, so taxpayers will largely subsidize that cost whether it’s through city, federal or state dollars.

That’s true even when the stadium isn’t in the host city — like with Dallas Stadium being in Arlington.

Arlington is part of the legal agreement, but Dallas gets the “host city” designation and does a lot of the work cooperating with FIFA.

The federal government has created a $625 million reimbursement program to help host cities cover those costs. The North Texas region will get about $51 million of that with $22 million of it going to the Dallas Police Department.

Dallas County officials raised concerns in May that their slice of the grant wouldn’t fully offset their security costs.

Local governments won’t know the full cost of security until after the games. If the cost goes above what they expected, city or county governments could be in the negative.

“You don’t really know how much you’re gonna spend until the check’s been signed,” said Steven Haynes, an assistant professor of risk management at the University of Texas at Dallas.

The boost in spending will be enough to offset the security costs Dallas is paying, he added.

“We may end up seeing Dallas pushing for more citations being issued,” Haynes said. “Because that is a way for them to recoup some of their costs.”

Council Member Chad West told KERA the sales tax boost may only serve to offset the $5 million sales tax revenue shortfall the city has experienced this fiscal year. Regardless, it’s money that wouldn’t be there without the World Cup, and he believes the city will make a profit from the event.

“Staff believes, and I have no reason not to believe them, that all of our public safety and infrastructure related costs will be reimbursed from FIFA, which passes through the federal government and some of the costs through the state government,” West said.

The increased Hotel Occupancy Tax revenue could also help make up for the money lost due to the convention center being largely closed as it undergoes redevelopment, he said.

But the matches will also have another benefit harder to quantify — getting the city on a global stage.

Arlington is hosting nine World Cup matches, the most of any host city. The matches are expected to draw hundreds of millions of eyes from across the world onto the region, especially because Dallas will host the International Broadcast Center where thousands of journalists will work to cover the matches.

“We will undoubtedly have business owners and executives for major corporations flying in from all over the world,” West said. “This is our opportunity to show them why they would want to relocate their corporations here, and why they would want to bring their families here as well.”

The scope of that more intangible benefit may not be known for years, he said.

“It’s like going to a job interview, you want to put on your suit that’s been pressed, you want to make sure your hair is combed and that you are fully prepared for that interview,” West said. “And this is Dallas’ interview.”

Bob Heere — executive director of the University of North Texas’ Sports Innovation Space, which helps international sports companies relocate to the U.S. — said the World Cup could make his job easier.

“When a company has never been here, and I talk to them on a video chat and try to recruit them to Frisco or Dallas, they’re not that excited because the stereotypical images they have in their mind are not necessarily that enticing,” Heere said.

But, he said, it’s easier to get a client to relocate once they’ve seen the region’s big sports assets like AT&T Stadium, Globe Life Field or The Star in Frisco.

Unfortunately for Dallas, none of those locations are in its city limits.

And while individual host cities are hoping the global spotlight will help them, the federal government under Trump’s second term hasn’t been nearly as welcoming.

From his global tariffs, to increased immigration enforcement that’s caused a drop in tourism, to the war in Iran — the world is reorganizing itself to rely less on America, and that could have a real impact on the economic benefit of the World Cup if it results in less international visitors, who are the driving force behind spending and hotel bookings.

Current FIFA projections assume 40% of attendees will be international fans. If the actual numbers are lower than that, it could bring down the World Cup’s economic impact.

So who benefits from all this?

FIFA.

The Swiss nonprofit is expected to rake in more than $11 billion through ticket sales, merchandise and broadcast licensing.

The organization says the money it makes gets reinvested back into the game of soccer. That means investing in soccer stadiums, national teams and organizing games.

Maybe at the end of the day it isn’t a single legal entity or person benefitting — it’s soccer, the game at the center of the whole event.

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