How FIFA Makes (And Spends) Its Money

How does the Zurich-based multi-million-pound organisation make its money and what does it spend it on?

The US-led part of the twin investigations is looking at corruption among members of the Concacaf and Conmebol, the confederations that represent national associations across the Americas and the Caribbean, but the entire structure is considerably more broad...

Any uncertainty around the World Cup is a major concern to the organisation. Fifa's own financial reports give a clear indication of how reliant the organisation is on the income each tournament generates.

The World Cup is the most lucrative sporting event in the world, eclipsing even the Olympics. The 2014 qualifying rounds and final tournament brought in $4.8bn (£3.1bn) over four years and, after costs are taken into account, Fifa made a profit of more than $2bn.

Profit from the 2014 World Cup

How much money does Fifa hold on to?

Fifa re-invests the majority of its revenue but it does hold on to a proportion of any profit to create a cash reserve. Fifa says that the reserve is important as it is extremely difficult to find insurance to cover the possible last-minute cancellation of a World Cup.

The value of this reserve has grown sharply in the last decade from $350m (£228.6m) in 2005 to more than $1.5bn (£1bn) in 2014.

The US indictment alleges over $150m (£97m) in corruption during a period of over 20 years. That currently equates to around 10% of the money Fifa has on hand for emergencies.

A further worry for FIFA is that its sponsors and "partners" (extra-privileged sponsors) seem displeased by the latest bout of scandals. Coca-Cola are concerned that such accusations have “tarnished” the World Cup. Visa has warned that it may reassess its FIFA sponsorship unless the organisation can come to grips with its internal problems.

That is money FIFA will not want to lose. Marketing is a cornerstone of FIFA’s swelling balance sheet, accounting for about a third of its $2 billion in yearly revenues.

 

Increased interest in football from Asia and Africa has swelled the flow of money from television-broadcasting rights. A favourable tax status in Switzerland helps too: FIFA only pays around 1% of its income to state coffers. With cash rolling in, the organisation has built up healthy reserves of $1.5 billion, ostensibly for a rainy day.

At long last the storm clouds appear to be gathering.

Source: The BBC and The Economist

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However, the most importantchart for FIFA is the following... Spot The Odd One Out...