Google’s Quantum Breakthrough & The World Cup Goes to Saudi Arabia | Prof G Markets

Economic Viability

The economic viability of hosting international sports tournaments like the World Cup is often questioned due to their high costs and uncertain returns. Ed Elson highlights a study from the University of Lausanne, which found that only three events—the 1984 LA Olympics, the 2010 Vancouver Winter Olympics, and the 2018 Russia World Cup—were profitable, while the rest incurred losses 1 2. The average return on investment for these events was a negative 38% 3.

And what they found is that 95% of the time you lose money.

--- Ed Elson

This raises the question of whether the financial outlay is justified, especially when the majority of these events result in financial losses.

   

Soft Power Impact

Hosting the World Cup can serve as a powerful tool for enhancing a country's global image and influence, despite the financial risks. Scott Galloway argues that Saudi Arabia's investment in the 2034 World Cup is a strategic move to boost its soft power and attract international business and tourism 4 5. He suggests that such events can improve human rights conditions by putting the host nation under global scrutiny 6.

I would argue when they are on a global stage that they have more motivation and incentive to improve, to continue to improve and head in the right direction.

--- Scott Galloway

This approach, while controversial, may lead to long-term economic benefits and a more favorable international reputation.

   

Strategic Intent

Saudi Arabia's strategic intent in hosting the World Cup extends beyond immediate financial returns, aiming for a broader economic transformation. Scott Galloway notes that the Kingdom is leveraging its vast capital reserves to transition from a fossil fuel-based economy to one centered on services and tourism 7. This investment is seen as a "quarter of a trillion dollar billboard" to attract global attention and business 8.

They know that this is immediately going to be in the red from an expenses perspective, but they're looking at the long term payoff and the long term benefits.

--- Ed Elson

Despite concerns over human rights and corruption, the potential for economic diversification and increased global influence makes this a calculated risk for Saudi Arabia.