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Fifa basks in $631m profits

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Gordon Farquhar | 17:23 UK time, Thursday, 3 March 2011

These continue to be boom times for football.

for the four years to the end of 2010 show the organisation earned more than $4bn. That's an increase of 59% over the previous four year stretch which included the World Cup in Germany.

Its broadcast rights and marketing which are leading the boom of course, and Fifa is riding the wave that's thrown the Premier League skywards too.

Fifa has banked $631m to its reserves, which now stand at $1.2bn.

The World Cup was a major earner for Fifa

Fifa says of the money it raised, 70% was ploughed back into the game by staging tournaments and investing in projects. Fifa put $794m into football development, including its 'Goal' and 'Win in Africa' projects.

More than $350m has been handed out to the member FAs, under what's called the .

The joke used to be it helped increase significantly the number of luxury cars in the car parks of some federations, but Fifa says this money is properly audited, and that 21 FAs are selected at random every year, and their spending checked closely to make sure it's appropriate.

Fifa still manages to spend handsomely on itself. $707m went on its operating expenses, including the . insists they stuck to their approved budget, and that costs are under control.

He says the sum includes their substantial staff costs for the development projects and the 23 international tournaments they ran over the four year cycle, many of them small, financially unproductive events.

"I believe operational efficiency is at a high level," Kattner says. "Of course you can always do more to reduce costs, but I believe they're at a good level."

The figures also emphasise Fifa's dependence on the World Cup for the lion's share of its revenues, and the risk it would face of ever having to take the step of cancelling the event. Executives concede finding ways to be less reliant on the one big event, and generating income other ways is a huge challenge.

Overall, staging the World Cup in South Africa resulted in a net loss for Fifa. The budget of just over a billion overran, compensated for in part by higher than expected revenue, but overall, the net cash outcome was a $31m loss.

Fifa's president Sepp Blatter says he's a happy man. It's amazing how much of a warm glow $4bn can bring to a man but perhaps the smile reflects more the fact that still, despite the talk, no-one has come forward to challenge his presidency.

Perhaps, before the deadline of the end of March, a hat, or an Arab head-dress will be thrown into the ring?

Comments

  • Comment number 1.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 2.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 3.

    God I hate FIFA. I know I'm not the first to say this but something has to be done about them.

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 6.

    Fifa may just be heading towards the first cancelled World Cup with Qatar. A country the size of Birmingham and in the heat of the summer../Good luck is what i say.

    Get rid of this pathetic man, his so called campaign to take the World Cup to New places is good in theory but flawed in practice. Where to next after Qatar? Antartica 2026 maybe?

    Get rid of this man and bring the Cup home, to where it belongs!

  • Comment number 7.

    FIFA should be a non profit organisation with all profit going to grass roots football across the globe.

    Fanciful, sure... but if they really believed in what they say... this would be how it is run.

  • Comment number 8.

    This piece is clearly intended to remind everyone to get back to hating FIFA after the World Cup bid furore. There's no comment or analysis - you've just laid bare the facts of what FIFA have earned and now left it to all of us to get annoyed about it, right? Write on here things like "How dare they make such profits in these austere times!"

    No doubt there are things that need sorting within the FIFA corridors of power, but, surely it's a good thing if they're making profits and putting money into football still. And wherever they send their showpiece tournament, even daft places like Qatar, we'll still all tune in because we love the World Cup.

    It would be great if someone did finally oust Blatter from his presidency, but will whoever's next be better? The FA have changed its leadership many times - and its still pretty useless as far as I can tell.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    "Gordon Farquhar analyses Fifa's latest set of financial figures"

    Where.

  • Comment number 11.

    Unappointed. Unaccountable and Unwanted.

  • Comment number 12.

    It is the people who finance FIFA's ability to hold tournaments and their other supposedly
    'benevolent' donations to poor countries. But it's the people who pay if you like taxes to
    see those of us who happen to be good at dribbling balls around, but nevertheless are mortals,
    play out a game of footy. Then it only makes sense that the ones that pay have the say in what
    FIFA does, not its board members. The ranks of the old mercantilism have been controlling
    the game since FIFA's existence. If FIFA were to properly and surely carry out what it states
    as its 'goals', how about showing some accountability? You're living off from our income.

  • Comment number 13.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 14.

    I agree with number 7, their remit is supposed to be to act in the best interests of football, all their profit should be put back into the game, into grass roots football and into improving stadia in the developing world. Not a year goes by without hearing if a stadium disaster in Africa, if FIFA helped out the poorer organisations rather than lining its own pockets I think some of these could be prevented.
    8 The article highlights that FIFA are sitting on oodles of cash, what for is my question when FAs round the world are struggling financially. For example how would you feel if you were paying taxes but the infrastructure where you lived was a shambles, then you heard that the government had plenty of cash to spare but wasn't spending it?

  • Comment number 15.

    Hmm. Directly after, or actually just before the final didn't Blatter state that the WC had been a success. $31 million loss looks like failure to me...

    But I don't understand. If the WC generates the lion's share of Fifa's revenues but they did lose £31 million where did they get their money from?

  • Comment number 16.

    How much does Sepp Blatter get paid?
    Is that mentioned is these figures?

    Also, any more bribes coming in by mistake like the one from ISL, that Fifa have to tidy away somewhere?

  • Comment number 17.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 18.

    "FIFA should be a non profit organisation with all profit going to grass roots football across the globe."

    The bitterness on here is unbelievable, FIFA puts alot of its money back into the game and to staging tournaments that won't make it money. When are people going to realise the England world cup bid wasn't good enough? It had nothing to it, simply stated we have the best league in the world, if you thinkt hat kind of arrogance is going to win votes then you're deluded. FIFA tend to lean towards projects where they can leave a legacy and improve the standing of the game and country, England offered nothing like this. No mention of what the World Cup could do for areas or the game, simply boasted about how good we are.

    70% is a significant amount to put re invest in the game, but they also have other areas to invest in so that they can make more money each year and so that 70% figure can rise.

  • Comment number 19.

    @czechmate

    England's bid wasn't good enough? Really? Perhaps you mean 'England's bid wasn't the best on the table'. There are only a few countries in the world that currently have the infrastructure, accessability, stadia and know-how to stage a WC. We could stage the WC tomorrow, Russia can't...

  • Comment number 20.

    I'm new to this, how come my comment that the FIFA board should be elected by the fans broke house rules?

  • Comment number 21.

    Czechmate

    I see that our bid wasn't good enough, and that with most of the world not really liking the english for various reasons.

    But with this notion that it must leave a legacy then that must now preclude england, france, germany, spain and italy from ever holding a world cup ever again. Therefore, the world cup will have to be held in more 3rd world countries and military dictatorships

  • Comment number 22.

    Fifa are going to need this money in the bank in the medium term.

    Sooner or later the big clubs will stop their star players from doing internationals unless they are properly compensated. These figures indicate that they are currently not.

    It wouldn't be that daft to imagine by the time Russia holds the world cup there is a European Super League with all the top players none of which are playing in the WC and has no control by FIFA / UEFA. But instead directly by the clubs and/or media corps. I wonder if FIFA will then hypocritically want some government intervention to protect their business model?

  • Comment number 23.

    Our bid wasn't good enough because we don't have oil. Russia and Qutar, hmm what do they have in common, i wonder. Qatar is a terrible place to hold a world cup, any one with 2 brain cell can see that. But they do happen to be rich...

  • Comment number 24.

    I would like to quote from an article written by Martin Samuel.

    "FIFA requested, as a condition if England had mounted a successful bid, exclusion from a range of UK laws including one governing Banks and Foreign Exchange Operations. FIFA had asked for 'the unrestricted import and export of all foreign currencies to and from the UK' and, worse, they got it.

    So, had England hosted the World Cup, FIFA executives were free to move around with sacks of unexplained cash, exempt from the inquisition of customs officers. Is it only me that is beginning to feel the need for a shower?"

    I would love the ³ÉÈË¿ìÊÖ to look in to this further - what reason does FIFA give for requesting exemption from this financial regulation? Why does it feel it should be allowed exemption from the laws of a host country? Does exemption from this law really allow, in theory at least, FIFA executives "to move around with sacks of unexplained cash, exempt from the inquisition of customs officers"?

    Mr Samuel also points out in the same article that Russia and Qatar were the two countries in the respective bidding processes that were ranked lowest in the Press Freedom Index.

    "FIFA have given their two World Cups to the countries in which the press is most muzzled, most powerless, most murdered - certainly in Russia - and least able to question their masters."

    Something stinks.

  • Comment number 25.

    @Your Own Cow
    What is also worth mentioning is that FIFA made similar demands on the African World Cup, so that they pay no tax on any profits made from any form of operation during the world cup, which were duly accepted.

    How much money did FIFA potentially remove from a 3rd world country? And if the business model is to contiune to trudge round the globe taking money from countries and paying no tax, how much more money will be removed from the 3rd world countries that host tournaments.

    I would say to anyone who says there is bitterness from the English that we lost the bid - you're quite right it would have been great, but the bare facts suggest we would have had to compromise a lot of moral foundations in order to stage it and turn a blind eye to some extremely dubious practices.

  • Comment number 26.

    #11

    You're totally correct, well said.

    I'm not sure who could / would want to stop this behemoth - I guess it would fall to the clubs and FAs to splinter away, because no government would want the hassle.

    I don't mind that they've made money for their reserves (limos) as such, it's just the way it's a totally closed system and I would question their long term vision of the game's development. Much like the Olympic body, I find the way that they impose their rules on the World Cup host nation arrogant.

  • Comment number 27.

    @czechmate

    You were the first to mention the failed world cup bid ...

  • Comment number 28.

    FIFA make a profit? But ³ÉÈË¿ìÊÖ reported something like a loss but that aside.

    How come all the Clubs are either bankrupt or serious debt-traps?

    Of course FIFA must make a profit; THIRD WORLD COUNTRIES don't finance their own people. But still we must find the money to finance the lives of CORRUPT FOOTBALL 'officials' and play 'world cup qualifiers'which make no financial sense or any sense at all. And collectively we still stand less than 5% of a chance of qualifying for a World Cup Final!

    That is FIFA economics! Not surprising they make a 'profit'.

  • Comment number 29.

    To SwissColony (#15)

    I think you may be confusing profit and revenue.
    FIFA spent $1bn on the world cup
    Then then received $1bn in revenues (slightly under to account for the operating loss of $31m)

    Therefore the $1bn in revenue from the world cup is 25% of the total revenues of $4bn revenue taken over the 4year period

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