Soccer Buoys Business, Not City!

I saw my teammates post on Champions League final and its economical effect. I found that very interesting and made further research and found out actually it is not really profitable to the hosts as it claimed to be.

The League of Champions final, besides a sporting event, was a grandiose financial undertaking. The winner of the match Manchester United became about £85 million richer, and Moscow received about £35 million. City officials s to spent all of the city’s two-year sports budget of $227 million. At the end of the day only the service sector saw a payoff from it.

Analysts estimated that English fans left about £35 million behind them when they visited Moscow, with every fan spending over £650 on the two-day trip. That makes this year’s championship twice as expensive as last year’s in Athens. The estimates are based on the attendance of 40,000 fans. In reality, only 25,000 Britons came to see the match, with many holding back due to the trip’s high price.

The expenses of preparing for the match were shared by the City of Moscow and the Russian Soccer Union. A RSU posted on its web site that most of the expenses, the size of which is not being made public, were borne by the city. Some analysts estimate that the city spent 800 million rubles (about $33.7 million) on Luzhniki Stadium, 10 million rubles ($420,000) sprucing up the stadium’s grounds and the surrounding area and 37 million rubles (about $1.5 million) on temporary pedestrian bridges over roadways near the arena. Moscow received from the UEFA 20 percent of the revenue from ticket sales, which was 35 million rubles. Moscow also received a premium of $1.15 million. The only other revenue the city received from the event was in the form of restaurant and hotel taxes.

The city’s foreign guests were greeted by special inflated prices. The Baltschug Kempinski Hotel was booked for the match dates as soon as they were announced last year. A special rate applied between May 20 and 22 with rooms starting at 28,000 rubles. Swissotel Red Hills was charging 40,000 rubles for rooms that usually cost 18,500 rubles. The Euroluxe Hotel at the edge of the city raised the price of its double rooms from 3950 rubles to 16,000 rubles. Rooms that cost 2900 rubles in the Izmailovo complex were raised to 6000 rubles. Restaurants saw a 50-percent increase in business.

As we can see from the numbers it was not profitable to the City of Moscow at all. But at least they can get some of their money back in forms of taxes.

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