Report Highlights
- Unbalanced contracts: Experts say World Cup contracts exclude host cities from potential revenue more than ever, leaving FIFA with a larger share of the revenue.
- Texans hanging on: A Texas taxpayer-funded program helps cover costs, but the state is struggling to calculate whether there will be a benefit.
- Lack of transparency: Many cities have fought the release of their contracts with FIFA. Those that are public have key cost and revenue information redacted.
These highlights were written by the reporters and editors who worked on this story.
When Texas dedicated $22 million to host the 2017 Super Bowl between the New England Patriots and the Atlanta Falcons, state officials expected a return on their investment.
But a state analysis after the Patriots’ thrilling victory said it was “impossible” to say whether Texas taxpayers had broken even on their investments.
On the contrary, Texas fell short by $14 million, according to a breakdown of tax revenue in the same analysis.
Texas taxpayers will likely be forced to pay again when Houston and Dallas host the FIFA World Cup in June and July. These cities are among 11 cities in the United States that have agreed to pay hundreds of millions of dollars for the soccer tournament, thereby subsidizing a World Cup that is expected to take place generate $11 billion in profits for FIFA.
Host cities and their local organizing committees will pay for match security, cover the costs of renovating their stadiums to better accommodate football and organize fan festivals in addition to the main matches. Originally, they were also supposed to pay to transport FIFA officials to all matches, although that requirement has been waived, according to Houston organizers.
Cities get few tangible benefits in return. They don’t see a share of game day revenue from ticket sales, concessions and merchandise, or parking. Even the sale of tickets or suites in exchange for corporate sponsorships – usually a key revenue source for local organizers – has been restricted by FIFA this year.
Cities had to agree to FIFA’s demands even before the United States, Mexico and Canada submitted their bids in 2017 to host the World Cup, and many of these contracts with host cities remain secret. Now, as the event approaches, some cities are wondering whether the deals will force them to pay more than they get in return.
“Everyone signed a very, very one-sided deal,” said Alan Rothenberg, a member of the 2026 World Cup organizing committee in Los Angeles and president of U.S. Soccer the last time the country hosted the tournament in 1994.
Then, some host cities would receive a share of match day revenue, such as a share of money from the sale of food and drinks at matches. U.S. Soccer also picked up the security bill at matches and other organizational expenses, Rothenberg said. This helped cities raise more money than they spent, making hosting events more attractive.
This time, the deal was so lopsided that at least one city, Chicago, withdrew from the bid. And in some cities that have progressed, concerns have increased as the matches approach. Officials in Foxborough, Mass., threatened in February to withhold permits for matches unless FIFA or the Patriots’ owner agreed to pay $7.8 million in security costs in advance. Foxborough ultimately approved the permits after local World Cup organizers agreed to pay the bill in advance.
“At this point, I think a lot of people look at Chicago and think they’re the smartest,” Rothenberg said. “They looked at the terms of the deal and said, ‘No, thank you.’ I don’t think anyone in the 11 host cities thought it would be as difficult as it seems.
FIFA did not respond to questions regarding these criticisms. Instead, it provided a written response stating that it works closely with its host sponsors and hopes the cities will benefit.
“The 2026 FIFA World Cup is expected to generate significant economic activity in Canada, Mexico and the United States, spanning tourism, hospitality, employment and long-term global exposure,” said Jhamie Chin, FIFA spokesperson.
Host cities use external nonprofit organizations to organize and manage tournament logistics and raise funds to cover lodging costs. Chris Canetti, who heads the Houston host committee, said the city’s organizers were able to overcome all the challenges presented by the contract.
“This event will have a substantial economic impact on our region, with hundreds of thousands of visitors coming,” Canetti said. “We’re investing in this. I think it’s good for our community ultimately.”
The Houston Chronicle sought to better understand cities’ deals with FIFA and their implications for taxpayers by reviewing the records of all U.S. host cities. Most refused to hand over the contracts, including Houston, arguing that disclosing the documents would harm its ability to negotiate future events; Dallas did not object to the release but sent a request to the Texas Attorney General to allow third parties to object if they wished.
Both cities have asked the Texas Attorney General for permission to keep them out of public view. The attorney general’s office ruled that Houston and Dallas must cancel their contracts, although they were allowed to redact key financial figures, including how much FIFA paid to rent the stadiums for the event.
The Chronicle reviewed the two Texas contracts, as well as those of four other host sites — Kansas City, New York/New Jersey, Philadelphia and Seattle — that have made their deals available. Together, the contracts show that almost all of the costs of hosting the tournament fall on cities, whose ability to raise revenue is limited.
These deals, Rothenberg and other experts say, exclude host cities from potential revenue more than ever, leaving FIFA with a larger share of the revenue.
Texas taxpayers grappling with the problem
In Houston, at least, most organizational costs should not be borne by local governments.
“The host committee owns the contract with FIFA. We are 100 percent responsible for finding the funding to cover all of these expenses, and none of it comes from the city or the county,” Canetti said of the agreements.
Contracts do not clearly specify who should take responsibility if the host committee cannot cover the costs. Canetti said he is confident that the Houston committee will have more money than it needs for expenses, and that any excess funds will be donated to charity. The Canetti-led host committee uses a mix of revenue generated from corporate sponsorships, money paid by FIFA to rent NRG Stadium and grants from state and federal governments.
That includes $65 million from the federal government to help Houston fund security, part of a broader $625 million investment from U.S. taxpayers in the World Cup.
The committee also hopes to remove tens of millions of dollars from the Texas Major Events Reimbursement Program, an offshoot of the state events trust funds created in 1999 when Texas was in the running to host the Olympics. Canetti did not reveal the precise amount Houston expects to receive, and the Chronicle is still waiting for the governor’s office to respond to requests for records of its communications with the committee.
The reimbursement fund was critical to ensuring that Houston did not lose money when hosting the Super Bowl. This is expected to once again make a difference in covering the costs of the World Cup, helping to ensure that Houston and Dallas are in a better position than other host cities that do not receive state money. But that means Texas taxpayers bear a significant portion of the costs.
Kelly Dowe, the city’s chief financial officer when it hosted the Super Bowl in 2017, assumed the city would be left with the costs. He was surprised when the organizing committee for that event actually footed the entire bill, largely with $22 million in public funds. But these big events, while a boon to specific industries like hotels, bars and restaurants, are hardly a driver in a city’s budget.
“It doesn’t bring money to the city per se,” Dowe said. “You’re happy you broke even.”
Texas has released about $263 million since 2015 to help cities cover the costs of dozens of events, subsidizing everything from the Super Bowl to the Junior Olympics to eliminating horse racing. But program administrators have always struggled to verify that events generated a positive return on investment for taxpayers.
Under the program, cities interested in hosting competitive sporting events apply for state funding, using estimates of how much they believe will increase revenue from sales, alcohol and other state taxes following an event. This amount forms the basis of the amount the city is entitled to, and it can then submit the expenses for reimbursement after the event. This included $21.9 million for the Super Bowl in Houston in 2017, $23 million for the Formula 1 United States Grand Prix in Austin in 2019 and $31 million for the same event in 2021.
As the program grew, it began to draw criticism from across the political spectrum. Senator Wendy Davis, then a Democrat, pushed a bill in 2013 to check the program by saying, “We hand these things out like candy.” The bill did not pass, but state auditors reviewed the program in 2015.
The audit suggested that officials in the Texas comptroller’s office, which originally administered the program, did not control the number of out-of-town visitors strictly enough to ensure an economic benefit. He also found that they weren’t verifying that the invoices cities sent were directly related to the events they were hosting.
The comptroller’s office added rules in late 2014 clarifying the types of expenses eligible for reimbursement, and in 2015 the Legislature transferred the trust funds to the governor’s office of economic development and tourism.
But the move hasn’t made it any easier for state officials who administer the program to mine complex economic data, and they continue to write in their reports that they can’t say whether the events are having a positive impact. In 2020, five years after the program moved to the governor’s office, the conservative Texas Public Policy Foundation, which has been a strong supporter of Governor Greg Abbott, released a report criticizing the programsaying his vision “reveals a misunderstanding of how economies work.”
Andrew Mahaleris, a spokesman for Abbott, said the governor’s office commissioned an economic impact analysis for fiscal year 2024 that showed 840,000 non-local visitors spending more than $615 million in Texas, with a positive economic impact of more than $1.2 billion.
It’s unclear how the numbers in that study were calculated, and Mahaleris did not respond to requests to provide the study to the Chronicle.
“Event trust funds are critical tools that help Texas communities attract events to the state,” Mahaleris said.
When state officials look at the taxes they collected after the events, they come to a different conclusion. State officials are limited in the types of economic indicators they evaluate. For example, they look at the amount of sales taxes collected in cities and counties, but that data does not identify how much comes from out-of-state visitors for specific state-subsidized events.
“Houston is a giant economy, a region as big as some states,” said Dowe, the former Houston CFO. “As important as the Super Bowl or the World Cup is, it doesn’t move the economy as a whole as much as other factors – manufacturing, oil and gas, the refining that happens through the ship canal. Any movement in those areas would far outweigh the noise of the World Cup signal.”
After each of the last 40 events the state program has helped fund since 2015, state officials have said “neither a positive nor a negative impact is determinable.”
FIFA projection is “madness”
Proponents of using taxpayer dollars to attract major sporting events argue that host cities derive economic benefits from the exposure that widely watched games provide.
These figures are not negligible, according to FIFA, which underlines a study published in April with the World Trade Organization estimating the tournament will have an economic impact of $47 billion across the United States. FIFA referred questions about the study to the WTO, which directed questions to OpenEconomics, an Italian company that it said prepared the report. OpenEconomics did not respond to a request for comment.
Experts say these calculations are almost always exaggerated and the true numbers are difficult to identify. The billions promised in the FIFA and WTO report are “madness,” said Victor Matheson, a professor at the College of the Holy Cross in Worcester, Massachusetts, who has studied the economics of major sporting events like the Super Bowl and the World Cup for decades.
“That would mean each game generates $400 million, or about $5,000 to $7,000 per fan,” he said. “But most tellingly, FIFA is on the front page as the author/sponsor of a report that says FIFA is great. This report is better considered a press release rather than a serious economic study.”
Recent reports showed hotel prices are falling as the tournament approaches, which could indicate that fewer people are planning to travel for the games. This would be a major factor for host cities, as out-of-town visitors are essential to generating a positive economic impact.
Houston receives no net benefit from its own residents’ participation in the World Cup. These people are spending money that they probably would have spent in the city anyway, a principle that economists call substitution. An event like the World Cup can also crowd out other events, like conferences, that would have attracted foreigners to the city. And of course, a lot of the money spent at the games goes to entities like FIFA that aren’t based in Houston.
All of these factors make it difficult to assess the true economic impact on a city or state, Matheson said. This calculation requires a wide range of assumptions, and sponsors typically change these assumptions in their favor to increase the total.
It can be even more difficult to fully track the government spending needed to cover accommodation tasks.
The contracts reviewed by the Chronicle include a clause under which cities agree to “agree to do whatever is necessary to maintain confidentiality” unless local law requires them to disclose it. And nonprofit organizing committees are generally not subject to public disclosure laws.
Chin, the FIFA spokesman, said contracts contain “commercially sensitive” information and it is common to withhold it for “global events of this magnitude.”
As a result, many details about taxpayer investments remain out of public view. They include figures on how much FIFA will pay each city to use its stadium, which local companies have agreed to give millions for preparations and what benefits they will receive in return, what tax breaks FIFA will receive from each city and how each host committee plans to pay for the extensive preparations needed to stage the tournament.
The contracts obtained by the Chronicle provide for broad categories of responsibilities that fall under the jurisdiction of the host city – including security, transportation and stadium renovations. But the documents rarely attach numbers to these efforts.
Academic experts say the system’s secrecy is intentional.
“It’s atrocious how much secrecy they have in these kinds of taxpayer-funded events,” said David Cuillier, director of the Freedom of Information Project at the University of Florida. “These cities are going to invest a lot of money to host FIFA, and those who pay for it should know that. They should know how much money and how it is spent. That’s why we have records transparency laws.”