You'd think that hosting the World Cup would generate a lot of money for the cities who host it.

You'd think that hosting the World Cup would generate a lot of money for the cities who host it. But in reality, it's almost everybody but the host cities that benefit. Let's talk about it. The first and arguably most important thing to understand is that FIFA gets a big cut of almost every dollar that the World Cup generates. Revenue from ticket sales, broadcasting rights, and sponsorships all flow to FIFA, not the host city. Beyond that, the most common misconception is that tourism to the host cities will boost their economy. In reality, hotel chains, airlines, booking platforms, and global restaurant brands get the biggest cut of tourism revenue. On top of most of the host cities' revenue getting skimmed away, they also have the biggest expenses. Stadium upgrades, security, traffic management, and public transportation all add up to a hefty bill. Obviously, some money does get pumped into the local economy, but not all of that spending is new. The substitution effect comes into play here. If locals avoid crowded downtown areas, then the tourists are actually just replacing spending that would have happened already. Now, there are clearly some benefits for the host cities. Tourism is always a good thing. Hotels, bars, restaurants, and tourist attractions can all have fantastic weeks. However, the World Cup's biggest winner isn't the team that lifts the trophy or the cities that host it. It's the organization that's selling the tickets.