• The U.K. will host the 67th Eurovision Song Contest on May 13, doing so on behalf of 2022's winners Ukraine.
• Celebrated and spoofed by audiences across the globe, the annual contest is also seen as a vehicle of political and economic powerplay.
• The contest, which is expected to cost up to $30 million, comes at a challenging time for the U.K. economy. But authorities and businesses in host city Liverpool are hopeful it will provide a needed boost.

The U.K. will host the 67th Eurovision Song Contest on May 13.

Celebrated and spoofed by audiences across the globe, the world's largest singing competition has become something of a cultural institution in the seven decades since its launch.

But behind the audacious performances and even more outlandish outfits, the annual contest is also seen as a vehicle of political and economic powerplay.

In 2023, that's more the case than ever.

With the war ongoing in Ukraine (2022's winner), hosting duties have been assumed by second-place Great Britain, and Russia has been booted from the contest. Rising costs have prompted some countries to bow out before the competition has even begun.

So just what is the cost of the contest — and is it worth it?

What is the Eurovision Song Contest?

First held in Lugano, Switzerland, in 1956, the Eurovision Song Contest was dreamed up by the European Broadcasting Union, an alliance of public broadcasters, as a way of celebrating the culture and unity of a newly defined post-war Europe.

Though the EBU says the Eurovision is apolitical, the contest's intersection with European relations has been noted.

"Every year on the Eurovision stage we've seen political, social messages being projected through the songs, through the performances of artists," said Dean Vuletic, historian of contemporary Europe at the University of Vienna and author of "Postwar Europe and the European Song Contest."

"This is why people love to watch Eurovision because it's always a reflection of the political zeitgeist in Europe," he added.

In the decades since it was established, the contest has grown greatly, incorporating even non-European countries such as Australia. Yet it remains a co-production between EBU public broadcasters, with all participating countries — typically around 40 — paying a fee to take part.

How much does Eurovision cost?

Europe's biggest economies — Germany, Britain, France, Italy and Spain, otherwise known as the Big Five — pay the most, based on the EBU's "solidarity principle," which states that the strongest shoulders should "carry the most weight." They also automatically qualify for the final.

Other countries then contribute varying amounts to the pot, which in recent years has totaled around $7 million. But with inflationary pressures weighing heavily on Europe in 2023, those fees were deemed too much for some, with Bulgaria, Montenegro and North Macedonia pulling out of this year's event for financial reasons.

Still, the main cost of holding the contest is shouldered by the host country — typically the previous year's winner — whose responsibility it is to put on a show to remember. Those sums have varied vastly over the years — with some countries more forthcoming than others.

In 2013, the Swedish city of Malmo reportedly took pride in hosting its event for around $20 million. That's well below the $42 million spent by Moscow in 2009, the roughly $30 million paid out by Dusseldorf in 2011, and the $54 million dished out by Copenhagen in 2014.

But the crown for the priciest Eurovision to date is held by Azerbaijan's capital Baku, which in 2012 spent between a whopping $64 million and $76 million on the event alone — not to mention the $100 million it spent on a new stadium to host it.

An economic challenge for the U.K.

In 2023, the U.K. is expected to spend up to $30 million to hold the contest, as host Liverpool seeks to reflect Ukrainian culture while showcasing the best of British music and creativity. 

As host broadcaster, the BBC will foot the bulk of the bill — an estimated $10 million to $21 million — while the U.K. government has said it will contribute $12 million.

That budget is topped up by ticket sales, sponsorship deals and revenues from online platforms. Meanwhile, Liverpool's local authorities will spend a further $5 million, largely on events outside of the arena.

"Culture's really important to this country, and the way that we portray our culture and portray our identity internationally is hugely important. Tourism in Liverpool is worth 47% of our economy. So this isn't chicken feed for us, this is really, really important," Claire McColgan, director of culture at Liverpool City Council, said.

The event comes at a challenging time for the U.K. economy, which is struggling to keep up with its European neighbors amid soaring inflation and low economic growth. In 2022, the U.K. was the only major economy that failed to return to pre-pandemic growth rates, instead recording a contraction. In 2023, it is expected to shrink by a further 0.3%.

It also comes as the BBC undergoes major cuts and tries to plug a £1.4 billion hole in its finances after the government froze the license fee.

"Rarely have we had the opportunity to stage Eurovision, but it's our time. We were obviously really, really honored to take it on on behalf of Ukraine, and hopefully it's a great opportunity to show what the BBC does really well," said Martin Green, managing director of BBC Eurovision 2023.

"We'll probably put a full figure out when we're done," he added of the BBC budget. "It's a moveable feast at the moment and we're right in the middle of it."

What does Britain stand to gain?

With all that expense, why would the U.K. want to host the event, especially after scoring poorly or being infamously awarded the dreaded null points so many times in recent years? 

For one, the competition can be a great advert for the host city — and country — which can endure well after the party is over. In 2019, Tel Aviv's event reached over 180 million TV viewers in over 40 markets, and millions more online.

"It's something that countries put on their C.V. when they're aspiring to host events like the Olympic Games or the World Cup," Vuletic said. "Just think about Russia: It hosted Eurovision in 2009 and afterwards hosted the winter Olympic Games in Sochi and the World Cup for Soccer."

That can also attract tourism spending and boost the local economy. 2022's host Turin, a city in northern Italy, spent around $11 million hosting the event but said it made that money back seven times over through tourism.

James Bates, managing director at Maray Restaurants in Liverpool, said he anticipates a 50% uptick in business during the event alone.

"People speak about the ripple effect, and we certainly saw that in 2008, when we were Capital of Culture. The city is talking about the boost in visitor numbers as similar to [that], which was sort of transformative for the city," he said.

"Liverpool city council invested £2 million and within six weeks we've brought in £15 million of actual cash investment to help us put this brilliant competition on. But the economic impact is bigger than that," McColgan said. "We've estimated the economic impact I think at £22 million. I think it's going to exceed that completely, because the visitor numbers exceeded that on day one."

A statement of solidarity

The event plays an important role in showcasing a country's soft power, too, through arts and culture — something both the U.K. and Ukraine are eager to do. 

"We can show the world our courage, our bravery, our strength, and inspire all people to be like Ukrainians, be united, be strong, fight for your freedom, fight for your land, and for your families," said Ukraine's 2023 entrant, Tvorchi.

"That soft side and that promotion of U.K. PLC internationally makes the investment well worth it," the BBC's Green added.

Crucially, though, the contest represents one more act of solidarity with Ukraine, and a reformulation of U.K.-EU relations as Britain seeks to re-establish its presence in Europe after Brexit. 

"The other political context that we have to also view the contest in this year is that of Brexit," Vuletic said. "For many Eurosceptics in Britain, Eurovision has been a symbol of what is wrong with Europe. Since 2000, British entries have tended to score quite low of the scoreboard, leading Britons to criticize Europeans for not liking Britain anymore."

"Last year, that changed. The United Kingdom came second," he added. "So we also have to see this edition of Eurovision as being a rekindling of a British love affair with Eurovision and of British relations with Europe."