|
How much does it cost to play in La Paz?
By
Carlos Gustavo Machicado*, La Paz, 12 May 2008.
The recent debate about playing soccer in high altitude
cities like La Paz is certainly an economic debate. Since
last year, there has been an increasing intent of the FIFA (Fédération
Internationale de Football Association) to prohibit the
qualifying matches for the World Cup 2010 in cities above
2750 meters a.s.l. The argument that altitude causes health
problems has been used a lot, and although there are medical
studies that demonstrate that altitude is harmless for
athletes engaged in sports of high competence, the FIFA has
insisted with its prohibition.
Recently, after all countries affiliated to the Conmebol
(South American Football Confederation) except Brazil,
accepted to play in La Paz, the FIFA imposed a period of 21
days of acclimatization for each team but then decided to
remove the use of the stadium of La Paz for all the
qualifying matches. Why is it happening that one of the
biggest organizations in the World insists in prohibiting a
small country like Bolivia to play in its most important
city? I think that the answer is not as most people think,
for medical but for economic reasons.
Soccer nowadays is moving thousands of dollars among
countries, teams, investors and sport enterprises like Nike
or Adidas. Dani Rodrick states in his blog (http://rodrik.typepad.com/dani_rodriks_weblog/2007/10/do-you-want-to-.html)
that soccer is a window of globalization. If a person wants
to understand how globalization reshapes wealth and
opportunity in the world, he/she just has to take a look at
soccer. Globalization of the soccer industry, for instance,
has shaped the way of life of African players. There is no
doubt that the loosening of the restrictions on the numbers
of foreign players in European leagues has increased the
earnings of the best African players and widened the income
gap between them and their compatriots back home.
Milanovic (2003) (http://129.3.20.41/eps/lab/papers/0312/0312001.pdf)
argues also that free circulation of players has markedly
increased during the last ten to fifteen years as limits on
the number of foreign players in the European leagues have
been lifted, and clubs have become more commercially-minded.
Agreeing with the author, I think this is good for poor
countries, in terms of the game, because it allows poor
countries to capture some of their “leg drain”, that is the
improved skills which their players have acquired playing
for better foreign clubs. But, in contrast, it is bad for
poor countries, because teams protect their players more,
since they represent the most important sources of income.
Imagine for a while, how much would it cost for Barcelona,
to have Ronaldinho or Messi acclimatizing 21 days in La Paz.
|
|
Finally, to be sure that the veto from the FIFA is not a problem
with the advantages that teams that play in the altitude could
have, Chumacero (2007) (http://sechi.facea.uchile.cl/pdf/regulares%20-%20sesiones/Chumacero_rchu1.pdf)
demonstrates that the altitude appears to play no significant
role in determining the outcome or score of a match. Using two
different econometric models (a bivariate Poisson model and an
ordered probit model), he shows that, after controlling for
altitude, the differences of the estimated average probabilities
of a win and a draw by Bolivia in home games in models that
include and exclude altitude are relatively small. For example,
the estimated probability of a win against Argentina increases
by 7% and of a draw by approximately 2%. In general, the
increased probabilities of winning are a modest 3%
(similar results apply to Ecuador and Peru).
So, if playing in the altitude represents no danger for health
and no advantage for foreign national teams, what is the problem
for playing in La Paz? No paper has addressed yet this issue,
but I am sure that the main question is: How much does it cost
to play in La Paz?
Let me do some rough computations. According to Football
Finance, Ronaldinho is the second best paid player in the world
with 710.000 € per month. If we
imagine
that Ronaldinho could
spend 21 days acclimatizing in La Paz, this would cost Barcelona
497.000 € in terms of its opportunity cost for not having Ronaldinho playing for them (forget that Ronaldinho
is not playing at the moment). This opportunity cost certainly
underestimates the total cost which should include sponsors’
costs, advertisement’s costs, and others.
Now let’s see how much it costs Bolivia to play in another
stadium. Let’s assume as Chumacero (2007) that the willingness
to pay to attend a match is US$ 10, multiply by the 40.000
spectators that the La Paz stadium can hold, it results in US$
400.000. The second largest stadium in Bolivia (Santa Cruz) can
hold only 30.000 spectators, so there would be a loss of US$
100.000 per match.
Now it becomes clear that playing in the Hernando Siles Stadium
is detrimental for the FIFA, teams and sponsor’s finances; while
the cost for Bolivia to play in another stadium is nothing
compared with these other costs. Finally, we can not forget that
the FIFA is an enterprise that maximizes benefits and as the
verse states: business is business.
Related articles:
-
Quo
Vadis Torch?
- Finding
Rationality where less Expected
-
Stop and Think!
(*) Researcher at the Institute for
Advanced Development Studies, La Paz, Bolivia. The author
happily receives comments at the following e-mail:
cmachicado@inesad.edu.bo .
Ó
Institute for Advanced Development Studies 2006.
The opinions expressed in this newsletter are those of the
author and do not necessarily coincide with those of the Institute.
If you would like to receive the Monday Morning
Development
Newsletter by e-mail, please
fill in your information here:
|
