Acceso usuarios
Holger Preuss, Martin Schnitzer
There is a lack of scholarly research into long-term local organizing committee (LOC) budget forecasts in the bidding stages of a FIFA World Cup. As FIFA increasingly takes control of LOC revenues and contributes to the LOC's costs, the bid committees are adopting a strategy to distort their budgets. On the one hand, this situation encourages committees to underestimate their budgets to give FIFA the impression that greater profits can be achieved, prospectively leading to a better bidding position. On the other hand, an underestimated budget means that potential shortcomings need to be covered by taxpayers' money. For this reason, our research aim is twofold. First, we will shed light on the size of an LOC budget by conducting a benchmarking analysis that demonstrates the complexity of the LOC budget and illustrates the many different ways in which previous hosts have compiled their budgets. Expert interviews verify that the size of the LOC budget plays a strategic role in the bidding process. Secondly, we will discuss the political constraints on forecasting an LOC budget based on games theory and agency theory. The article explains the ex-ante and ex-post opportunism of the LOCs in terms of their budget prognosis and how FIFA reacts to these behavioral patterns.
