The economy of euphoria: who makes money when Spain lifts the World Cup

The victory of Spain in the FIFA World Cup has triggered a wave of economic activity across multiple sectors, with businesses and individuals capitalizing on the national euphoria. On Sunday morning, amid the celebrations following Spain’s triumph, a young man left a market with several loudspeakers, distributing them among his friends. He explained he had charged whatever they wanted, smiling as he continued singing football chants with his companions. While the individual transaction seemed minor, the broader economic implications of such a major sporting event are far more complex. How does a country benefit economically when it wins the World Cup? What industries see the greatest gains? Economists have long studied the financial effects of hosting large international events, but less attention has been given to the economic benefits of winning one. According to Mario Sorribas-Fierro, professor at OBS Business School, three key factors come into play: domestic consumption, tourism, brand promotion, and exports. Domestic spending, particularly in hospitality, is estimated to generate around €130 million over the past 40 days. However, Sorribas-Fierro cautions that isolating this figure solely to the World Cup is difficult due to overlapping economic variables. Additionally, while these funds represent increased consumer spending, they must be adjusted for reduced productivity during the event period. David Echeverry, an economics professor at the University of Navarra, echoes similar concerns. He notes that the economic effect for a winning nation is ambiguous. In regions deeply connected to football, workers often take unpaid leave, which reduces overall productivity. Yet, a major victory can also serve as a platform for promoting the country's image, encouraging both tourism and commercial interest. Echeverry highlights the power of narratives in shaping economic outcomes, referencing Nobel laureate Robert Shiller’s theories. Spain, with its recent World Cup win and upcoming hosting role, offers a compelling case study for analyzing how sports success can influence global interest in tourism and trade. Another area of potential economic gain lies in tourism and branding. A 2024 study suggests that countries that win the World Cup experience an increase in tourist arrivals, especially if the country is relatively unknown internationally. The visibility gained through media coverage, social media, and influencer marketing could attract more visitors and business opportunities. Sorribas-Fierro points out that the promotional value of a world championship victory extends beyond immediate tourism, contributing to long-term brand recognition and economic growth. Internationally, there may also be subtle shifts in trade and investment. Sorribas-Fierro mentions that countries that win the World Cup often see their GDP rise by between 0.25% and 0.5% in the two quarters following the event. This is attributed to the psychological boost associated with global recognition, which can lead to sustained economic benefits. However, quantifying these impacts requires longer-term analysis, as the effects are not immediately measurable. On a larger scale, the economic impact of the World Cup was evident in the United States, which hosted many of the matches. The Bank of America estimated that the tournament generated approximately $40 billion in economic activity, with half of that occurring within the U.S., and the remainder distributed between Mexico and Canada. Bloomberg further noted that the tournament was one of the most profitable in history, with FIFA earning over €13.1 billion in revenue. These figures underscore the global reach and financial significance of the event, highlighting the diverse ways in which nations can benefit from hosting or winning such a prestigious competition.