The exact answer to why host cities may suffer financial losses when hosting the World Cup in the United States lies in the asymmetric business model imposed by the tournament organizers. While FIFA captures virtually all major sources of direct revenue — such as ticket sales, international broadcasting rights and global sponsorship quotas — American municipalities absorb all operating costs. City halls need to bear massive public security expenses, infrastructure adaptation and transport logistics, generating a collective loss estimated at more than US$250 million for the 11 headquarters in the United States alone.
The entity’s commercial monopoly and the decentralized model
Unlike previous editions of the tournament, where a national organizing committee centralized expenses and risks, the 2026 World Cup adopted a decentralized contract model. Each American city had to sign individual agreements directly with FIFA, assuming all legal and financial responsibility so that the ball could roll.
This arrangement exempts football’s highest entity from any local losses. FIFA implemented a new supporter program that replaced the old local committees, which in practice reduced the collection of city halls. Cities are prohibited from selling premium seats or entering into commercial partnerships that conflict with the tournament’s global sponsors.
As a result of this limitation, local governments are unable to monetize the flow of tourists in the same way as the organizers. The money generated in the arenas goes directly to Switzerland, leaving the American public administration only the hope of recovering the investment through the indirect collection of taxes on local hotels and restaurants.
The three biggest drains on public money in the tournament
To understand the scale of the financial challenge just a few days before the start of the tournament, it is necessary to observe where public money is flowing. Below we list the main cost factors that put pressure on the accounts of American headquarters:
1. Security and the paralysis of federal funds
The cost of guaranteeing the integrity of millions of fans is the biggest villain in public accounts. The federal government had promised a transfer of US$ 625 million to help cities with security. However, political wrangling in the US Congress and shutdowns at the Department of Homeland Security have delayed the release of these funds. Without that cash on hand, cities like Kansas City and New Jersey had to compromise their own budgets to ensure policing on the streets and around stadiums.
2. Commercial exclusivity and partner blocking
The impossibility of commercially exploiting public spaces around stadiums generates a gigantic opportunity cost for city halls. In Philadelphia, for example, a lucrative deal with a local convenience store chain was summarily blocked by FIFA. The reason was the simple fact that the brand was considered a direct competitor to McDonald’s, the event’s official sponsor.
3. The high cost of maintaining Fan Fests
Traditional public parties with giant screens are a contractual requirement to host the event, but the financing comes from the municipal pocket. With costs for physical structure, licensing of public areas and security reaching millions of dollars, governments from different headquarters have threatened cancel side events on the eve of the tournament to avoid debt.
The metropolises that said no to the blank check
The current alert scenario justifies the controversial decision taken by some of the largest American cities years ago. During the stage of choosing venues in 2018, cities with a strong sporting tradition, like Chicago and Minneapolisvoluntarily withdrew their candidacies.
Local administrations refused to sign the imposed contract, arguing that the clauses represented an unacceptable risk for taxpayers. The then mayor of Chicago was emphatic in stating that the city I wouldn’t give a blank check to cover any billion-dollar deficits of the organization. Today, with the exponential increase in operating costs and the inflation of basic services, the defensive posture of these cities has proven to be a wise financial choice.
The promise of global visibility always serves as the main attraction for hosting major sporting events. However, the final balance of the current edition shows that international prestige takes a huge toll on public accounts, leaving a legacy of debts that local residents will have to pay long after the final whistle.
