Major sporting events, such as the World Series, FIFA World Cup, and Olympic Games, are often viewed as opportunities for economic growth. The expectation is that these events will generate substantial financial benefits for host cities and nations.
As ticket prices soar and accommodations become more expensive, many anticipate significant visitor spending. This spending is expected to provide direct economic advantages, boosting local businesses and creating job opportunities. In addition, there are indirect benefits through suppliers and staff, as well as induced benefits when employees spend their wages in the local economy.
Furthermore, hosting these mega-events can enhance the reputation of cities and countries, leading to increased global media coverage, improved national branding, and greater confidence from international investors. These intangible benefits may result in sustained growth in tourism, a revitalized economy, and a lasting sense of pride among residents and visitors.
However, despite the apparent advantages, research indicates that the actual financial impacts are often less impressive than expected. Many politicians are still eager to host such events, despite the potential for modest outcomes.
Experts in tourism and event economics advise caution regarding the so-called multiplier effect, which suggests that the economic benefits of mega-events extend beyond immediate spending. Meta-analyses reveal a wide range of economic results, frequently overestimating long-term advantages. Much of the spending is lost to export leakage, where profits end up in the hands of non-local businesses, organizers, and ticketing agencies instead of benefiting local economies. Additionally, tourism displacement often occurs, where typical tourists avoid the area due to inflated prices and overcrowding, sometimes persisting even after the events conclude.
Politicians and event organizers often tout large economic benefits when bidding for and hosting these occasions. However, some researchers caution that many economic impact studies are conducted to support political agendas rather than to uncover economic realities. This bias can skew the perception of the actual impact.
The Toronto Blue Jays playoff run and the World Series exemplify this phenomenon, generating a temporary surge in local spending. Local businesses experience a boost, with packed stadiums, full hotels, and bustling restaurants during games. Media and business surveys frequently report noticeable increases in hospitality and retail during these playoff periods. Nevertheless, sports economists warn against interpreting these short-term spikes as lasting economic gains, citing limited duration, substantial leakage, and minimal job creation outside of temporary hospitality roles.
In the case of the upcoming FIFA World Cup in 2026, which Canada is co-hosting, assessments indicate substantial economic benefits. A report from the City of Toronto estimates approximately $940 million in positive economic output for the Greater Toronto Area, along with thousands of jobs created from June 2023 to August 2026. British Columbia also anticipates significant economic contributions and job creation associated with the event in Vancouver.
While these projections reflect potential short-term gains driven by visitor spending, some experts question whether the World Cup will significantly enhance the economic landscape of cities that are already well established. Nonetheless, the visibility garnered from hosting such a prestigious event may aid in achieving tourism marketing goals and support bids for future international events.
Despite the allure of mega-events, they often come with hefty financial and environmental costs. Although these events can generate jobs, they tend to be temporary and low-wage positions primarily found in the hospitality and service sectors. Public funds allocated for staging events or upgrading facilities could alternatively be invested in affordable housing, public transportation, or healthcare services, yielding higher social returns for local communities.
Moreover, historical evidence suggests that many promised legacies from mega-events have been unmet. Environmentally, these events carry substantial carbon footprints due to global travel, temporary construction, energy consumption, and waste generation, often leading to more adverse outcomes than positive ones.
To optimize gains, cities should focus on maximizing local community benefits while accurately measuring net economic impacts, rather than simply gross receipts, by considering displacement and export leakage. For the World Series, leveraging the enthusiasm generated during the event into repeat visits and lasting local spending habits is essential. For FIFA 2026, the goal should be to convert increased global visibility into enduring tourism and business opportunities while ensuring community advantages and minimizing environmental repercussions.
Ultimately, while mega sporting events can offer meaningful short-term revenue and reputational exposure, these outcomes are not guaranteed and do not affect all stakeholders equally. Careful policy design, transparent assessments, and strong community and environmental safeguards will determine whether events like the World Series or a World Cup become fleeting moments or valuable assets for host cities.
As noted by The Economist in its analysis of economist Andrew Zimbalist”s work, “little doubt exists that under current conditions, prudent city governments should avoid the contests at all costs.”
