FIFA gained record profits thanks to the World Cup in Russia

Thanks to the 2018 World Cup, FIFA received record revenues of $ 6.1 billion. At the same time, the Russian Organizing Committee and the Russian budget took the main costs for the World Cup - more than $ 14 billion.
Origin source
What does FIFA earn?

On May 13, before the start of the 2018 FIFA World Cup in Moscow, the organization presented a report on its incomes and expenditures for the current budget period and approved the targets for the next four-year period. According to the head of the financial service of FIFA Thomas Peyer, in 2015-2018, FIFA earned a record $ 6.1 billion for itself - 8% more than the planned amount fixed in the current budget and 6.7% more than for the period 2011-2014 years.

For the previous four-year cycle, which ended with the 2014 World Cup in Brazil, FIFA's revenue was $ 5.718 billion, according to the federation. At the same time, revenues directly from the World Cup 2014 amounted to $ 4.8 billion, or 84% of the total revenue for four years. From financial documents of FIFA for 2016 and 2017 it followed that in 2015-2018 the organization expected to reduce its revenues relative to the previous period to $ 5.656 billion, but helped by new investors, which helped to achieve record revenues. FIFA's revenues have been growing for several years - in 2007-2010, for example, they amounted to $ 4.189 billion (of which $ 3.6 billion - from the 2010 World Cup in South Africa).

FIFA earns 82% of its revenue thanks to the sale of media rights to broadcast games of its tournaments (53% of budget revenues) and marketing rights to sponsors and partners (29%). The rest of the money is brought by the sale of license rights (7%), tickets and "hospitality packages" (super-expensive tickets for VIP and VVIP lodge) (8%) and other income (3%).

What is FIFA?

Founded in 1904, FIFA (Fédération Internationale de Football Association, FIFA) today is one of the largest commercial structures in world sports with billions of turns. The main function of the organization, whose members are 211 national football associations (more than members of the UN), is holding international football competitions, including beach, women's, youth and cyber football. In total, FIFA organizes 16 international tournaments, the largest of which is the World Cup among men's teams. Since it is the FM that generates FIFA's main profit, the organization lives in a four-year cycle of budget planning from the championship to the championship.

According to The New York Times, referring to the internal documents of FIFA, in the current budget cycle, the organization was able to receive $ 450 million more than planned in the budget, thanks to several large contracts made with new partners not long before the 2018 World Cup. The main contribution to the additional income of FIFA was made by Chinese companies. In 2016, Wanda Group became a global partner of FIFA (specializes in development, retail, logistics, etc.), which signed the contract until 2030.

Sponsors of FIFA in the status of "partner of the World Cup on football" were also the company Hisense (electronics manufacturer), Mengniu (producer of dairy products) and Vivo (manufacturer of smartphones). The contracts with them were concluded in 2017 and are valid until the end of the 2018 World Cup.

At the same time, since the selection of Russia as host country for the World Cup 2018 in 2011, no new company representing Western Europe or North America has signed a sponsorship contract with FIFA. The current Western sponsors: Coca-Cola, Adidas, Bud, Visa, McDonalds - had long-term contracts with FIFA. In 2015, these companies threatened with a break in contracts with FIFA, demanding the resignation of the head of the association, Joseph Blatter, who was in the middle of a corruption scandal. In the same year, Blatter was dismissed and dismissed from any football activity for eight years.

Another major budget item that has increased FIFA's revenues over the past four years has been the sale of license rights. Revenues from the sale of the FIFA license rose from $ 50 million in the previous period to $ 160 million due to the signing of a contract with EA Sports, a developer of popular e-sports. As part of the contract, EA Sports has organized FIFA eWorld Cup 2018 - the world championship on cyber football, the final of which will be held in August 2018.

How much does FIFA spend

About one third of the money earned in four years, FIFA traditionally spends directly to host the World Cup. The expenses of the organization at the World Cup 2018 are $ 1.948 billion. A substantial part of this amount, $ 627 million (32%), will be paid to the Russian organizing committee as a partial compensation for the costs incurred. The second major expense item - $ 400 million - will be awarded to the participating teams, which will be distributed depending on the results achieved. So, the world champion will receive $ 38 million from FIFA. The Russian team, which reached the quarter-finals, will receive $ 16 million in prize money. The remaining expenses of FIFA include payment of television production, payments to judges, development of IT solutions, payment of championship insurance, etc.

The contribution of FIFA to the organization of the remaining 15 competitions, which are held under the auspices of FIFA in four years (children's, women's, e-sports, etc.), is only $ 600 million for the budget cycle.

Among FIFA's spending, not directly related to the organization of competitions, is investment in educational programs and the development of football around the world. According to this article, annual target payments are made to the national football federations, training seminars for coaches and referees, construction of the World Football Museum, etc. In 2015-2018, FIFA spent $ 1.65 billion for these purposes. Almost $ 1 billion ($ 891 million) goes to pay office, salaries, trips around the world for football officials, etc.

In total for the period of 2015-2018, FIFA spent a total of $ 5.556 billion, which allowed it to record a profit for a four-year period of $ 544 million - a record in the history of the organization.

How much Russia spent on organizing the 2018 World Cup

Russia spent much more FIFA on organizing the World Cup. The total amount for the preparation for the World Cup, indicated in the government's federal program to prepare for the 2018 World Cup in Russia, amounted to 679 billion rubles, or almost $ 11 billion at the current rate. At the same time, an additional 850 million rubles. were singled out after the start of the world championship. According to the source of RBC in the organizing committee of the World Cup, this money was allocated at the last moment because of FIFA's additional wishes for the infrastructure of new stadiums, including equipment for VIP lodges.

The main expenses - 551.93 billion rubles. (81.4%) - were associated with the construction of stadiums and training fields, as well as transport infrastructure for the World Cup. Seven of the 12 stadiums hosting the 2018 World Cup games were built from scratch on the federal budget. Also, 92 training fields were built. In total, their construction cost the budget of 150 billion rubles.

352.5 billion rubles were invested in the construction of the transport infrastructure, of which 170.3 billion rubles were allocated from the federal budget. In this part, the most was spent on the construction and reconstruction of airport complexes. So, in Rostov was built a new airport Platov. The cost of construction amounted to 37 billion rubles, of which 19 billion was invested by the company Airports of the Regions Viktor Vekselberg. In other cities of the World Championship, new terminals of operating airports have appeared and the runways have been updated.

Part of the cost of preparing for the World Cup took on the regions. In general, their expenses were related to the repair of facades, roads, pedestrian areas, sewage systems, the purchase of new buses, ambulances, etc. In addition, the funds were used to "increase the tourist attractiveness of the region." The most large-scale regional programs for the 2018 World Cup were implemented in Moscow and St. Petersburg, where to the World Cup 2018 were built junctions, bridges and new metro stations.

According to RBC, the aggregate contribution of the regions in excess of the registered in the federal program amounted to 205 billion rubles. The total expenditure of Russia on the World Cup 2018 in Russia amounted to 884 billion rubles. ($ 14.2 billion).

Championships only for large

The general policy of FIFA is to expand the geography of the world championships, and taking into account the upcoming increase in the number of participants in the final stage to 48 teams (from 32), the tournament becomes "only valid for very serious countries economically, or it will be the collaboration of several countries such as the USA, Mexico, Canada "(selected hostess FM-2026), recalls the former Secretary General of the Russian Football Union, Doctor of Economics Anatoly Vorobyov. After Qatar, who intends to spend $ 200 billion to prepare for the next World Cup in 2022, only countries such as China will be able to draw the organization of the World Cup, Vorobyov said.

The question of whether it is profitable to hold a world championship is very difficult: you need to take into account not only the monetary costs incurred, but also intangible benefits - goodwill, including image dividends, but it is almost impossible to measure them strictly, Vorobyov argues. The main beneficiary will be the tourism industry: "After the fans saw Moscow and other cities so attractive, a word of mouth will work, many South Americans and Europeans will want to come and see Russia." "As for the sports component, of course, there are risks that stadiums in a number of cities will become unclaimed, like in South Korea or South Africa, especially where there are no Premier League teams (Saransk, Volgograd, Nizhny Novgorod). There are already known costs for maintaining these stadiums, and it is not yet clear, due to what they will pay off, "- adds Vorobyov.

In 2019, the projected costs for the maintenance of seven regional arenas will be from 276 million to 338 million rubles, or 2.2 billion rubles. in the aggregate, follows from the draft concept of the legacy of the World Cup, published by the Ministry of Sport in April 2018.

Professor of the University of Chicago economist Konstantin Sonin believes that the main benefit of the World Cup in Russia is the increase in the involvement of fans and the prospect of a long-term increase in interest in football from a wide audience; $ 10-15 billion spent on the championship is "a small amount for the economy as a whole," and "the huge involvement of fans, disproportionate to spending, is in some ways even more important for the development of football than the construction of stadiums and infrastructure," says Sonin. The big role of the championship is that it sets the standards for organizing sports events, and the championship in Russia demonstrated that "it is possible to organize everything in such a way that people would come [to stadiums] not only in Moscow and St. Petersburg, but also in Saransk, Saratov and other cities, "so that football began to attend the middle class and families with children, etc., said the economist.

And this, in turn, gives hope for an increase in the revenues of football clubs from tele-rights and stadium visits, the expert concluded.