The call for the US, Mexico, and Canada to set aside their differences for the 2026 World Cup co-hosting bid is, on the surface, a diplomatic nicety. But from where I sit, it is a stark reminder that even in the high-stakes world of international football, the bottom line rules. The UK's own experience with co-hosting Euro 2020, a logistical nightmare that ultimately enriched the hospitality sector but strained public finances, offers a cautionary tale.
Let us cut through the sentiment. The US, Mexico, and Canada are not exactly allies in trade. The USMCA renegotiations left scars. Yet here they are, forced to play nice because the World Cup is a revenue behemoth. FIFA, that bastion of transparency, is demanding unity. Why? Because split bids increase operational costs and dilute sponsorship value. The market demands efficiency.
The UK's bid for the 2030 World Cup, which we shared as a cautionary lesson, collapsed under the weight of fiscal reality. The Treasury looked at the projected £15 billion cost, the infrastructure upgrades, the security bills, and the inevitable cost overruns. The gilt yield curve steepened at the mere thought. We pulled out. It was the rational choice.
Now, the US, Mexico, and Canada are being told to learn from our mistakes. But will they? Unlikely. The US has a habit of spending first and counting the cost later. Their national debt is a ticking time bomb. Mexico's peso is volatile, and Canada's housing market is a bubble waiting to burst. Co-hosting a World Cup is a capital-intensive venture. Capital will flow where it is treated best. If these nations cannot align their fiscal policies, the capital flight will be swift.
Take the security costs. The US Department of Homeland Security has already requested $50 million for World Cup planning. That is just the start. Mexico's drug cartels will need to be pacified, which means more federal spending. Canada will have to upgrade its border infrastructure. All of this will be financed by debt. And debt is a tax on future growth.
Then there is the issue of market volatility. The World Cup might provide a short-term boost to tourism, but the real test is whether these economies can absorb the shock. The Fed is still tightening. The Bank of Mexico is fighting inflation. The Bank of Canada is wrestling with a housing downturn. A surge of World Cup spending could exacerbate these imbalances.
At this point, you might wonder why anyone would bother. The answer is simple: the World Cup is a signal. It signals to global investors that a nation is open for business. It is a marketing expense. But marketing expenses must be controlled. The UK, to its credit, realised that the return on investment was too low. The 2012 Olympics were a different story, but that was a single nation, not a tripartite arrangement.
So here we are. The US, Mexico, and Canada are being urged to set aside differences. They will try. But the market will be watching. If the fiscal discipline is not there, the bond markets will punish them. And the World Cup, that great unifier, will become just another example of how sentiment cannot overcome the bottom line.
As for the UK, we have moved on. Our current government is focused on inflation targeting and fiscal responsibility. The World Cup is a nice idea, but the numbers don't add up. And in the end, the numbers always win.
