FIFA Scandal Could Put Russia World Cup Bid At Risk

Russia finds itself between a rock and a hard place as the FIFA scandal unfolds. Moreover, Russian leadership has reacted with anger to speculation that the ongoing FIFA corruption investigation could cost it the right to host the World Cup in 2018.

FIFA Scandal Could Put Russia World Cup Bid At Risk

Fourteen senior global soccer officials were arrested on Wednesday as part of a U.S. investigation into corruption at FIFA, the sport’s organizing body. Seven of those arrested were FIFA officials, who were arrested as the prepared to attend a meeting in Zurich. An independent Swiss investigation related to the 2018 and 2022 World Cup bids (won by Russia and Qatar, respectively) has also been going on for some time.

When the news broke, Russia said it would cooperate with the investigations, while other officials including President Vladimir Putin condemned them. The Russian Foreign Ministry went so far as to claim the arrests were just an illegal attempt by the United States to impose its laws on other countries.

In a press conference after the charges were announced on Wednesday, FIFA’s Director of Communications Walter De Gregorio commented that the developments would not result in a revisiting of the 2018 and 2022 World Cup host votes, saying “Russia and Qatar will be played”. He did, however, acknowledge that things could change as more facts emerge.

Putin comes out swinging after FIFA scandal

On Thursday, Russian President Putin stepped up to the podium and took his shots at the investigation into the FIFA scandal, saying the arrests look “very strange.” Not surprisingly, paranoid Putin also commented that the U.S. investigation was just another attempt to stop FIFA President Sepp Blatter from being re-elected at the organization’s presidential elections on Friday, and to prevent Russia from hosting the World Cup in 2018.

Full speed ahead for Russia 2018

Everything is still full speed ahead with preparations for the World Cup according to Russian officials. Alexei Sorokin, chief of the “Russia 2018” organizing committee said on Wednesday that he was not “afraid” of the criminal investigation into the 2018 World Cup bid, and that Russia had provided full cooperation with FIFA’s internal corruption investigation headed up by Michael Garcia.

“We repeatedly said the process was transparent and that we’re not concerned with any investigations. It’s just strange there’s a chance to go through the same thing again, where everything was seemingly closed,” Sorokin commented.

When he was asked about the possibility of a re-vote on the World Cup host nations due to the FIFA scandal, he replied: “No, because we are so deep in the preparation, we’ve done so much. Our government, our country, has done so much already for the preparation of an excellent World Cup, I don’t even want to discuss it with anyone.”

Costs of hosting World Cup 2018 also an issue for Russia

It has also become apparent that Russia has underestimated the cost of hosting the Cup as well.

Dr Steve McCabe of Birmingham City University’s Business School explains: “When Russia won the honor of holding the games in 2010 the then-Prime Minister Vladimir Putin suggested it would cost $10 billion,” he said to CNBC in an interview on Thursday. “However, some analysts suggest that holding the cost of holding games could be as high as $50 billion. If the actual cost is somewhere in between – say $30 billion – this means that any government winning a World Cup bid faces a huge financial headache. And let’s not forget that Russia is an economy that has been severely undermined in recently.”

Russia’s economy has also been battered by the effect of dramatically lower oil prices and being isolated politically and economically for the last year or so because of its aggressive military annexation of Crimea and its role in fomenting the ongoing war in Eastern Ukraine. Russia’s recent aggressive military actions have led Western nations to impose economic sanctions on the country.

Also of note, given the fall in the ruble and quickly rising costs, the Russian authorities announced on Tuesday that planned to reduce its World Cup budget by close to 3.6 billion rubles ($71 million) to a total of 660.5 billion rubles ($13.2 billion). The statement noted that the savings were to be derived from a reduction of spending on improving the power supply for the World Cup venues. Critics of Russia are also aghast about a proposal by the Russian authorities to use prison labor to help build World Cup facilities that are behind schedule.