19 January 2012

The Center of the Universe

One of the nice things about living in the Center of the Universe is that there is a continual stream of VVIPs coming through town and sometimes they stop to chat. Such was the case yesterday when the Secretary General of FIFA, Jerome Valcke, took a few hours out of his busy schedule to do some much-needed PR with the international press corps.

FIFA, as we know, has had its share of really, really bad news lately. Corruption scandals emanate from this self-styled guardian of the global game as easily as no-bid contracts to Joseph Blatter’s family. Andrew Jennings is well on top of the legal proceedings against FIFA, recording his findings at www.transparencyinsport.com. In Brazil there is a strong and growing movement to get rid of Ricardo Teixeira, erstwhile president of the CBF and the 2014 Organizing Committee. This fight is being led by the Associação Nacional dos Torcedores e Torcedoras and can be accessed at www.torcedores.org.br.

Valcke is making the rounds of politicians and cities to get a few things done: 1) get the Law of the Cup passed. This has so far taken five years and will likely take a few more months to get through congress. In play are issues dealing with financial incentives, ticket prices for the elderly, students, indigenous, and the tens of millions of Brazilians who would like to see a World Cup game but can’t afford US$50 to do so. 2) Check on the progress of stadiums and infrastructure in the host cities. 3) Get some PR work done to polish the image of an institution that is under justifiable pressure to become more transparent and to leave more lasting benefits than the mere acceleration of brutalizing regimes of accumulation.  

Stadiums are massively over budget, but this should come as no surprise. Many of them will be white elephants. With maintenance costs typically running about 10% of initial construction, the public will pay for the Cup, again, in ten years.  But, you say, this is what the privatization schemes are for! So the public won’t have to assume the costs! Perhaps, but as with the public private partnerships that structure Rio de Janeiro’s transportation system, the companies are guaranteed profit and have no incentive to improve service, just to make more money. As we found out in Brasilia, the privatization of stadiums will depend on attracting shows, making the interior of the stadium a shopping mall, and charging astronomical sums to see mediocre football. As I talked about last week on Faixa Livre, Rio de Janeiro’s privatization contract for the Maracanã has just been published. Come on Eike Batista! I want you to determine how I experience professional football for the next 30 years!

The following is a semi-official table showing the vertiginous increase in construction costs for the 12 World Cup stadia that will then be handed over to private interests for profit and shopping center fun.

2010-11 Data taken from UOL online on 18.01.2010. 2009 data from various sources.
Costs in millions
 of R$ (1.76 = 1USD)

Jan 2010
Jan 2011
Itaquerão (SP)

Maracanã (RJ)

Arena Fonte Nova (BA)

Arena Amazônia (AM)

Arena Pantanal (MT)

Estádio Nacional (DF)

Estádio das Dunas (RN)

Castelão (CE)

Beira-Rio (RS)

Arena da Baixada (PR)

Arena Pernambuco (PE)

Mineirão (MG)


My questions to the Secretary General (I did not have a recorder, so quotes should not be taken as direct but as very accurate transcriptions from my notes):

CG: Mr. Valcke, given that the 2014 World Cup will be the most expensive in history…
JV (interrupting):  More expensive than Russia?

CG: Well Russia hasn’t happened yet.

JV(irritated): Neither has Brazil.

CG: Yes, but we already know the estimated costs of the Brazilian stadiums will be more than 7 billion Reales, and that the infrastructure projects will run tens of billions more. Given that this World Cup will be more expensive to host than all other World Cups combined, even though many of the construction costs are choices made by the cities and states, does FIFA also expect to make a record profit from the event?

JV (irritated): You are confusing one thing with another. FIFA is not responsible for the construction projects. We make suggestions but do not ask for specifics. [the Anexo 19: Football Stadiums Technical Recommendations and Requirements is 125 pages long. The bidding documents published here give insight into the lack of demands made by FIFA]
Brazil decides how many cities they want, Brazil decides what infrastructure projects they want to develop. The lack of facilities is Brazil’s reality, and has nothing to do with FIFA.

JV: FIFA is not a private organization; we are not in the business of making money. Decisions are made by the 208 members of the FIFA congress and all money is put back into the organization. We depend on the World Cup for 85 to 90 % of our operating budget for the next four years and with this money we run all of the other World Cups, give millions to the smaller federations who get 80% of all operating surplus…

I think we will make between US$3.3 and US$3.5 billion on the 2014 World Cup.

CG: What is FIFA doing to counter the perception that the World Cup, and in particular the stadiums, are being financed with public money and are targeting the interests of national and international business in one of the most unequal societies in the world?

JV:  Most of the companies that will receive our hospitality packages are Brazilian. We have 300,000 hospitality tickets that we use which is the same number of category 4 tickets that we have reserved for the Brazilian public, so it is not fair or accurate to say that we are privileging corporations over the people. We are also giving 100,000 tickets, for free, to low income Brazilians, indigenous people and others. Tickets that are reserved for corporations but are not used will be put on sale for the public. (end).

As I have explained before, no one is ultimately responsible for what happens with the World Cup. FIFA positions itself as a kind of victim that is trying to work within a slow and opaque governmental structure in order to carry off the tournament which they claim is their principal source of revenue for the following years. The cities and states are to be blamed for the mind-bogglingly stupid projects underway but should we really accept at face value the idea that FIFA just makes “suggestions”?

FIFA cannot be blamed for the murder of the Maracanã, but they’re also not complaining about the loss of culture, the forced evictions underway to make room for parking lots, or the destruction of a global icon . Nor will they be responsible in any way for the maintenance costs of the publically funded stadia that will be privatized for more than the length of the tournament in order to maximize the profits for the tournament to which they have exclusive commercial rights. Tudo bem, if Brazil wants the World Cup, they have to play by FIFA’s rules. But this is far from “Fair Play” as FIFA has very strategically created a monopoly condition for which we can point the finger at a few Brazilians.

Is it necessary to spend R$2 billion on World Cup security? Why should Brazil be held financially responsible for damages caused by natural disasters? Doesn’t FIFA have insurance for this? What ever happened to the relatively sane idea of regionalizing the World Cup ? Now, more than 50,000 people will have to travel to Cuiabá (or Manaus, or Natal) over a day or two in order to see, for example, England vs. Cote d’Ivoire in the first round. That’s a tenth of the city’s population. Can the airports handle that volume? Will foreigners be able to use their credit cards to purchase tickets on Brazilian websites? Will there be any English language signage to facilitate the flow of people that FIFA’s publically-financed event is generating?

As Valcke rightly pointed out, the World Cup cities will not be the same during the Cup. The opening concert in Rio is anticipated to draw between one and three million people to Copacabana. No one doubts that the Brazilians can pull the stadiums together in time. That was never the question. As in South Africa, the real issues are much more profound for the two most unequal countries in the G-20. 

FIFA is very clever in indentifying their responsibility frontiers, massaging the Cup into shape, making money for themselves and others, and then heading on to the next tournament. What gets left behind will become the full responsibility of the Brazilians who are now in the process of choosing their future.

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