AP and Business Insider ZURICH (March 20) — The World Cup’s commercial power led to record revenue of $2 billion for FIFA last year, with $337 million in profits coming from the four-year cycle leading up to the 2014 soccer tournament in Brazil.
FIFA, which pocketed $140.7 million in profit in 2014 alone, added $91 million to its reserves, which now stand at $1.523 billion. The revenue of $2.096 billion in 2014 raised the four-year total to $5.718 billion.
Income should keep rising before the 2018 World Cup in Russia despite FIFA’s reputation being battered by corruption and vote-buying allegations.
“This success underscores the huge appeal of FIFA’s flagship tournament,” the governing body noted in its annual financial report published Friday.
FIFA’s expenses also soared, topping $5.38 billion in the past four years, including $1.955 billion in 2014.
Spending last year included: $261 million in World Cup bonuses to member federations and confederations; $27 million buying a four-star hotel near the world soccer museum site in Zurich; and $39.7 million in executive committee stipends and senior management bonuses.
However, FIFA didn’t contribute to the real costs of staging the World Cup — stadiums and transportation infrastructure.
The tournament cost an estimated $15 billion, a significant portion of which was public money. Brazil spent $3.6 billion building and renovating 12 stadiums for the tournament. Less than a year later, some of those are turning into white elephants. The $300 million Arena Amazonia in Manaus, for example, held just 11 events in the five months after the tournament.
Widespread protests related to World Cup spending erupted across the country in 2013.
FIFA again spent more rewarding senior officials than it committed to its signature Goal program for development projects: $36.6 million in 2014.
As usual, FIFA President Sepp Blatter’s salary and bonus package was not detailed in the accounts.
However, a FIFA-appointed remuneration panel decided that Blatter and senior managers were “within the range” of packages paid by comparable “global companies,” the report said.
FIFA also paid $36 million in tax in 2014, due on its profits plus revenue earned by subsidiary companies.
The FIFA accounts show its dependence on the World Cup — generating 84 per cent of all revenue from 2011-14 — and also the tournament’s relentless popularity.
“The content we have is unique and fantastic and 2014 was another proof of that,” FIFA finance director Markus Kattner said at a briefing.
Even though FIFA signed most broadcasters and sponsors to two-tournament deals covering 2010 and 2014, revenue still rose sharply for the second event, which was more entertaining, better organized and safer than many predicted.
“And in the end the finances were OK as well, so what do you criticize?” Kattner said.
FIFA said revenue tied directly to the tournament in Brazil was $4.826 billion, compared to $3.655 billion for the 2010 World Cup in South Africa. Much of the increase is due to an accounting change which includes ticket sales.
FIFA also banked a $61 million profit-share bonus from MATCH Hospitality for lucrative corporate seat sales in Brazil.
The 2014 World Cup was also the most expensive to stage with total FIFA costs of $2.224 billion, including $35 million to the winning Germany federation.