U.S. World Cup Is an Iffy Investment

PORTLAND, Ore. (TheStreet) -- Just because the United States is capable of hosting a World Cup in 2022 doesn't mean it should.

Let's put aside the protest and inherent economic inequality of this year's $15 billion World Cup in Brazil that's displaced Brazilians with construction, sapped security resources to quell protests and amassed debt that will only skyrocket when the 2016 Summer Olympics arrive. The only comparison that can convince U.S. citizens of the merits or faults of hosting the World Cup is a like-for-like scenario.

Professor Dennis Coates from the University of Maryland, Baltimore County, found that the World Cup is a money pit for poorly prepared nations, but it isn't exactly a benefit even when a country has all the infrastructure in place. Around the time of the failed U.S. World Cup bids for the 2018 and 2022 installments, Coates wrote a paper that gutted the notion that a U.S. World Cup is a guaranteed money maker. He notes that initial projections for the 1994 U.S.-hosted World Cup estimated $4 billion in economic benefits. After the event, though, analysts reached the conclusion that each U.S. host city lost an average of $712 million in income relative to predictions. That's an overall loss of $9.26 billion for the entire 1994 World Cup and a $13 billion difference between expectation and reality.

He also notes that even when the 1994 World Cup did see some economic success, the earnings went right back into the pockets of world soccer governing body FIFA. The $100 million apiece paid by official World Cup partners including Coca-Cola, Sony, Visa, Adidas, Hyundai and Emirates? That's FIFA's. Same with the $20 million apiece from World Cup sponsors including McDonald's, Anheuser-Busch InBev, Johnson & Johnson and BP's Castrol. The combined $1 billion that Fox and Comcast's Telemundo paid to broadcast the 2018 and 2022 World Cups in the U.S.? All FIFA's.

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