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Dublin: 6 °C Saturday 15 December, 2018

World Cup bid: Why should taxpayers' money be given to sporting organisations?

Our Ministers might consider spending the €339 million on desperately needed pre-school education instead, writes Sean Byrne.

Sean Byrne Economist

THE EXPRESSIONS OF disappointment and sorrow on the faces of Minister Shane Ross and Irish Rugby Union officials on learning that Ireland would not be hosting the Rugby World Cup would have been comical were it not for the fact that these men considered it worthwhile spending €339 million of taxpayer’s money on the bid.

The €339 million comprises a “tournament fee” of €139 million to be paid to the tournament owners and €200 million to be spent on upgrading stadiums which after the upgrading will continue to be the property of the IRFU or the GAA.

Given the history of outrageous cost overruns on all major capital projects in Ireland, the upgrading of the stadiums would be likely to exceed estimates by at least a third and therefore the cost could be €300 million.

Economic benefits to Ireland?

In calculating the cost of upgrading stadiums it should be recalled that €191 million of taxpayer’s money was gifted towards the rebuilding of the Aviva stadium and €110 million of public money was contributed to the rebuilding of Croke Park.

The promoters of Ireland’s bid for the World Cup commissioned the Accountancy firm Deloitte to estimate the economic benefits to Ireland hosting to the World Cup to Ireland. Deloitte estimated that the World Cup would bring an economic benefit of €800 million. Like most studies undertaken by profit making economic consultants the Deloitte figure fails to take account of what every first years Economics student knows, namely substitution effects.

If an Irish rugby fan buys an expensive ticket for a World Cup match he is not spending that money on other goods or services so there is no net benefit. Spending by a foreign rugby spectator is a net addition to national income but what economist call “crowding out” can happen.

Benefit is transitory

The hotel rooms occupied by the rugby spectators would have been occupied by other tourists and some people may choose not to come because they dislike the often-drunken hysteria associated with Irish sporting events. Some net benefit might arise from price gouging by Irish hotels who, if Ireland had got the World Cup would immediately have raised their prices for the dates of the matches.

If the double counting in Deloitte’s estimates is discounted and a more realistic net benefit of, say, €600 million is substituted, the net benefit of hosting the World Cup, having deducted the cost of the “tournament fee” and the cost of upgrading the stadiums is only about €250 million.

This benefit is transitory, and the money spent on stadiums and fees would generate a greater and longer-term return to the taxpayer if it were invested in infrastructure which would benefit all citizens.

Rugby fans will argue that an event such as the Rugby World Cup cannot be assessed in mere economic terms: “national pride”, the “sporting spirit of the Irish” and other such nauseating cant is used to justify wasting taxpayer’s money on a sporting tournament in a country where one in eight children lives in consistent poverty and 8,000 people are homeless, 3,000 of them children.

Why should taxpayer’s money be given to sporting organisations?

The World Cup bid raises the broader question of why taxpayer’s money should be given to any sporting organisation. In Ireland the time spent on Physical Education in schools is the lowest in the OECD and the resources devoted to encouraging fitness in children is also the lowest. This neglect is sometimes justified on the basis that the children will play team sports outside school.

While many children take up team sports, a large number drop out because they quickly discover from the demands of the coaches and the side-line screams of parents, that despite the constant assertion that winning is less important than taking part, winning is all that matters.

Being discouraged by the competitiveness of team sports and with no alternative non-competitive and enjoyable physical activities provided in most schools, many Irish children are now unfit and obese.

Fee paying schools such as those attended by Shane Ross, Dick Spring and the IRFU grandees are those where team sports are most encouraged and have the best facilities. Much of the fee income can be spent on sporting facilities as the taxpayer generously pays the teachers’ salaries in fee paying schools.

Spend it on pre-school education instead?

The most spurious argument for subsidising team sports is that boys involved in sport are less likely to engage in “anti-social activities”. There is abundant research that shows that men who engage in competitive team sports exhibit more physical and sexual aggression than those who do not.

These findings confirm George Orwell’s view that sport “has nothing to do with fair play. It is bound up with hatred, jealousy, boastfulness, disregard of all rules and sadistic pleasure in witnessing violence. In other words, it is war minus the shooting.”

On the day that Ireland learned that it would not host the 2023 Rugby World Cup a report on indicators of social justice in the EU showed that Ireland ranked 21st out of the 28 EU member states on spending on pre-primary education. Access to good quality pre-school education for disadvantaged children is the most effective way of improving their life chances.

When the sorrow of our government Ministers at not securing the Rugby World Cup abates a little they might consider committing to spending the €339 million they were prepared to spend on the World Cup on pre-school education.

Sean Byrne is an economist.

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Sean Byrne  / Economist

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