Putin, holding the World Cup in 2017, will be untroubled by the cost of the competition © Zuma Press/PA Images
Putin, holding the World Cup in 2017, will be untroubled by the cost of the competition © Zuma Press/PA Images

How much will the Russia World Cup cost?

11 June 2018

Everything is ready for Russia to host the World Cup.

The infrastructure has been built (much of it by confidants of president Vladimir Putin), the merchandise is on sale (including T-shirts depicting the tournament’s official mascot Zabivaka as a hooligan) and Achilles the psychic cat is in fine fettle after a crash diet and rigorous training regime.

Psychic pets became part of the World Cup jamboree in 2010 with Paul, an allegedly clairvoyant octopus that mysteriously failed to forecast his own death, soon after the tournament ended. Hopefully a year’s worth of training will save Achilles from such a sad fate. During the finals, the white cat, a resident of St Petersburg’s spectacular Hermitage Museum, will have the solemn duty of predicting the outcome of every match by choosing between two bowls of food, each bearing a team flag.

Such attention to detail may explain why the 2018 World Cup is expected to cost Russia $14.2bn, slightly less than the last World Cup cost Brazil ($15bn). Most of the money was invested in infrastructure ($6.1bn), stadium construction ($3.4bn) and transport ($680m) but there was enough loose change to help knock Achilles into shape and to dragoon in pro-Kremlin Cossack troops to ensure ‘public safety’.

Four years ago, Russia lavished $51bn on the Winter Olympics in Sochi, the costliest global sports event of all time and, Putin’s opponents claim, one of the most corrupt. Organised crime and oligarchs are alleged to have siphoned off millions from an event that, according to one Russian Olympic expert, never actually had an official budget.

In contrast, staging a World Cup in 11 cities for $14.2bn looks like a masterclass in public procurement. Fans are expected to spend $3bn on hotels, travel, restaurants and souvenirs, boosting Russia’s GDP by 0.2% which, as economist Dmitry Kulikov gloomily noted, “is the equivalent of a statistical error.”

Money doesn’t matter much to Putin. As Matthew Rojansky, director of the Kennan Institute think tank, told Bloomberg Business Week: “It’s a great platform for him, and he’s paid enough for it. He will appear presidential, gracious and diplomatic.” That spin doctoring began with Putin playing head tennis with Gianni Infantino, the shiny bureaucrat who is president of FIFA.  

Putin – and most Russians – may view this World Cup through the lens of Russia Today, the Kremlin’s tame TV channel. Yet less flattering narratives are already emerging.

Eight of the tournament’s principal airports are owned, controlled, or part-owned by businesses or individuals linked to companies on the US Treasury’s sanctions list. Four stadiums are connected to sanctioned businesses: Volgograd and Nizhny Novgorod were built with the aid of Stroytransgaz group; Moscow’s Spartak stadium was financed by IFD Kapital and Gazprom, which is also sponsoring the World Cup, partly funded St Petersburg’s new ground. (Russian prime minister Dmitri Medvedev is a former chairman of Gazprom.)

Some of the biggest beneficiaries from the World Cup’s infrastructure investment belong to Putin’s inner circle. The lucky tycoons include Arkady Rotenberg, who plays judo with the president and, with his brother Boris, won $7.4bn in contracts for the Sochi Winter Olympics. Arkady has won so much state business under Putin he is known as the “tsar of procurement”.

Gennady Timchenko, who runs Stroytransgaz, shares the Russian leader’s passions for ice hockey and judo and, according to opposition leader Alexei Navalny (who calls him “Gangrene”), generated $8.4bn in business from Sochi’s Winter Olympics.

Oleg Deripaska, the energy-to-aluminium billionaire, controls the main airport for Sochi, where six matches will be played. Subjected to a worldwide transaction ban by the US Treasury, Deripaska may yet have to sell his stakes in his companies to keep them afloat.

Building the $300m Kaliningrad stadium, on the swampy Oktabrsky Island in the Baltic Sea, has proved lucrative for Aras Agalov, an Azeri billionaire who regularly wins public sector construction contracts and is alleged to have acted as a conduit between Putin and Donald Trump before the 2016 presidential election.

With St Petersburg and Moscow defining the careers of Putin and Medvedev – and being central to the business of many oligarchs – it was probably inevitable this World Cup would mainly benefit European Russia. Moscow will host a semi-final, the third-place play off and the final. St Petersburg will stage the other semi-final.

The easternmost host city, Ekaterinburg, is only 1.090 miles from Moscow – and 4,590 miles from Vladivostok on Russia’s east coast.  On the geographical borderline of Europe and Asia, Ekaterinburg will only host four group games. To the 34m people who live in Russian Asia, the finals may as well be happening in a different country.

The pro-European bias is most evident in Kaliningrad, a Russian enclave on the Baltic Sea, which will host four matches in a new 35,000-capacity stadium where the local team plays in front of around 4,000 spectators.

Former American diplomat William Courtney says the Kaliningrad stadium is a classic Soviet power play: “One feature of the Soviet period was that investments often didn’t make economic sense but had the purpose of showing how powerful the state was.” Putin is marketing Kaliningrad as thoroughly Russian – the Soviet Union only acquired Konigsberg, as this German city was then known, in 1946 – and, Courtney says, to make “it look more prosperous than it actually is.” 

Kaliningrad typifies what World Economic Forum expert Stefan Hall calls the “opportunity cost” of staging global sporting events. In essence, Hall argues, the money spent on new and upgraded infrastructure “is likely to be more wisely used in long-term investments in critical areas of the economy”. The expensive new stadiums are, Hall suggests “not really essential to the economic well-being” of a middle-income worker.

Hall has a point. Brazil’s National Court of Auditors concluded that the public money spent on the 2014 World Cup could have paid the entire country’s welfare bill for two years.

Yet for authoritarian leaders like Putin, infatuated by a syndrome design critic Deyan Sudjic calls “the edifice complex”, such considerations aren’t even on the radar. For Putin, the World Cup is a stage on which he expects everyone to play their part. He has already warned Russia’s coach Stanislav Cherchesov that the fans expect “better results”.

That might be difficult. According to FIFA, Russia is the 70th-best team in the world – the worst ranking ever for a World Cup host.

Inspired by the Twitter hashtag #MoustacheOfHope, thousands of loyal fans are growing – or faking – the Russian coach’s trademark moustache in an attempt to change the team’s luck. They might have more luck swaying Achilles with a luxury brand of cat food.

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