Russia's expenses on the World Cup exceed revenues by 10 times

Russia's revenues from the World Cup 2018 will be more than 10 times lower than the cost of its organization. The revenue to be received by the FIFA, will be a record $6.4 billion, Swiss Appraisal analysts estimate.
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Analysts Swiss Appraisal, which specializes in business valuation and investment projects, estimated potential revenues from FIFA on the FIFA World Cup in Russia in 2018. "By analyzing the growth rates of revenue and the main items of its structure in the previous World Championships, we anticipate that revenues from FIFA Cup of Confederations in 2017 and the World Cup in 2018 will be $ 6.4 billion", - stated in the study (see chart.) . The authors admit the possible deviation of total revenue to 10% in both directions.

The main revenue of the organization of the World Cup is made up of the sale of television broadcasting rights GOVERNMENTAL matches, the proceeds of the main sponsors, sale of license rights to use the symbols of the world championship, the sale of tickets for the matches directly and licensing of hotels that will take fans to be from the financial statements of FIFA 2014, which reflects revenues federation for four-year cycle, prior to the world Cup in Brazil in 2014. At the same time it hosts the national championship, which carries all the costs of preparing the championship - pagestruction and reconstruction of stadiums, infrastructure - receives only a portion of the proceeds from ticket sales. The rest of the money goes to the budget of the International Football Federation (FIFA).

According to the forecast Swiss Appraisal, total revenue from the sale of tickets for the World Cup in Russia in the 64 matches of the championship will be $ 782 million - much of this money as in previous championships, it is likely to remain in Russia. For example, the organizers of the World Cup in Brazil the FIFA received $ 453 million from $ 523 million, the proceeds from the sale of tickets for the matches.

The total cost of Brazil to host the championship were $ 13.6 billion, it was noted Standard & Poors. Carrying out a major international competition has led to an improvement in Brazil's image on the international level, an increase in the number of jobs in small and medium business, but the economic effect for the country was not too impressive - Brazil's GDP grew by 1.07% in 2014, it was noted Moody's. Revenue from the FIFA of the Brazilian Championship of $ 5.14 billion, the federation reported back.

The price of tickets defines FIFA, it is the same with the RFU Budedeal with their sales. Ticket prices will be announced in 2017. Model, calculated Swiss Appraisal, suggests that the matches of the World Cup in Russia will be visited by 3.35 million people, of which 1.5 million - foreigners (Brazil attracts about 1 million fans in South Africa - only 310 thousand.). The average ticket price, excluding preferential categories, will be higher than in Brazil and South Africa - from $ 140 at the cheapest places in the group stage games up to $ 1890 on top of the game. In Brazil, the minimum cost of tickets for the championship game was $ 90, in South Africa - $ 20.

"The outlook for ticket prices and attendance of games based on several inputs, including the convenient geographical position of Russia, which will attract more fans from Europe than distant Brazil and South Africa, the pricing policy analysis at the previous championships, the declared capacity of Russian stadiums and dollar inflation" - explains a representative of Swiss Appraisal Asil Al-Daher.

Sponsors and broadcast

Sales of television rights and revenue from sponsors bring to the organizers more than the sale of tickets for the matches. But these revenues,according to the rules FIFA, go past the cashier of the host country. These two articles will bring FIFA in 2018 of more than $ 5 billion, predicts Swiss Appraisal. According to company forecasts, the total TV audience of the championship will be 3.3-3.6 billion people from more than 200 countries worldwide.

TV rights for all competitions, the FIFA-owned, including world championships, has been based in Zurich, FIFA TV division. Rights sold directly by the FIFA, and through licensed companies, including the world's largest associations of broadcasters. For example, European Broadcasting Union (EBU) includes 72 member companies from 56 countries in Europe, the Middle East and North Africa, including the Russian "First Channel" and VGTRK. Today, FIFA had already sold the TV rights for the World Cup 2018 FIFA World Cup Russia ™ channels Fox, Al-Jazeera, the SBS Australian, Canadian Bell Media and several other channels. According to Bloomberg, Fox | (owned by NewsCorp Rupert Murdoch) has paid collectively for the TV rights to the show in the United States World Cup to Russia and Qatar (held in 2022) from $ 450 million to $ 500 million. For example, ESPN channel has bought from FIFA the right to translyatsii FIFA World Cup in Brazil, paid $ 100 million.

According to estimates of Swiss Appraisal for the four-year cycle, before the World Cup in Russia will bring sponsors FIFA just over $ 2 billion (before the World Cup Brazil FIFA has received from sponsors $ 1.629 billion). But theoretically FIFA may for once have problems with obtaining money from sponsors, predicts Swiss Appraisal. In October 2015 Coca-Cola, McDonald's, Visa and Budweiser threatened to break sponsorship deals with the FIFA, if the president Sepp Blatter Federation, whose name is associated with a loud corruption scandal, in which senior members of the executive committee of the organization were involved, will not resign. In October 2015 the Ethics Committee of FIFA dismissed Blatter and the head of the European Federation of UEFA Michel Platini from their posts for 90 days in connection with the ongoing investigation against the officials.

In six major sponsors of FIFA (in particular, Adidas, Cosa-Cola, Sony, Visa) and eight minor (Budweiser Johnson & Johnson, McDonald's and others.). acts "Gazprom" From 2015 to 2018, the official partner of FIFA. The cost of sponsorship packages FIFA is not a mystery: according to Forbes, "the main sponsors' annualpay $ 25 million to $ 50 million. Sponsors of the "second tier" pay per year from $ 10 million to $ 25 million.

The cost of selling a license to use the logo of the world championship is directly related to the cost of the brand "World Cup 2018". The higher the value of the brand, the higher the percentage of revenue from the sale of goods with the logo will have to pay a licensee who wishes to place this logo on your product. Despite all the scandals surrounding the FIFA, the championship brand value increased in comparison with previous championships, according to the Swiss Appraisal. Company experts have estimated brand at $ 249.8 million. The brand of the world championship in Brazil was estimated at $ 217 million. It is estimated Swiss Appraisal, 2018 FIFA World Cup Russia ™ has the highest AAA rating, the value of royalty rates for the use of the brand accounts for 5% of revenues. Total revenue from the sale of licenses for use of the brand will be $ 146 million, the company predicts.