Fifa in the money after ‘greatest ever’ World Cup

Brazil 2014 likely to earn football’s governing body in region of £2.55bn

Russian president Vladimir Putin speaks to FIfa president Sepp Blatter during the World Cup final between Germany and Argentina. Photograph: Dylan Martinez/Reuters

Russian president Vladimir Putin speaks to FIfa president Sepp Blatter during the World Cup final between Germany and Argentina. Photograph: Dylan Martinez/Reuters

 

During a match between Brazil and Uruguay at Confederations Cup in 2013 in Brazil, a warm-up event for the World Cup, there were riots outside the stadium in Belo Horizonte as protesters expressed their disgust at government corruption and what they saw as the folly of hosting such a hugely expensive football tournament in a country where so many of its people live in poverty. The government told police and the BOPE – Brazil’s special forces unit – to use tear gas and rubber bullets to put down the unrest.

That day, as the burnt-out cars still smouldered, Fifa issued a press release: Taittinger had signed up to be the official champagne of World Cup 2014.

The crass timing of the announcement reinforced the view that Fifa and the real world are not natural bedfellows, playing to the image of an arrogant and bloated organisation led by a hierarchy who were oblivious to criticism.

The World Cup has now come and gone. A five-week festival of football ended with Germany beating Argentina in the final as some respected observers were happy to label the tournament the “greatest ever”.

The fire hose of bad news that preceded Brazil 2014 was pushed to the margins as the game reminded everyone what the fuss should be all about: football. Against the expectations of many, the crowds came in their thousands to sit in finished stadia and the event passed off peacefully for the most part.

Commercial rights

Sepp Blatter

Blatter sat with Vladimir Putin with a near permanent smile on his face, due perhaps to the 78-year-old Swiss’ intimate knowledge of Fifa’s finances, which are in very rude health indeed.

The governing body owns all commercial rights to the World Cup, the value of which have escalated rapidly over the the past three decades, driven by structural changes in the way we consume media. In a world where we can download anything to watch later, the value of the live moment has skyrocketed. Sports that can deliver a live global audience at a set time and place have been the main beneficiaries.

According to Sportcal, an industry journal, Brazil 2014 is likely to earn Fifa in the region of £2.55 billion. This is expected to increase to beyond £3 billion by the time the event visits Russia in 2018. If these estimates are correct, Fifa will have doubled its income between the 2006 and 2018 events. Most of this money is distributed to football associations around the world, helping to fund the game’s grassroots and pay for development programmes.

Television rights drive the bulk of the income, accounting for around £1.5billion, with the UK’s broadcasters BBC and ITV contributing a joint £120 million for the right to share the 64 games of the tournament.

Companies such as Adidas, Coca Cola, Emirates and Sony are among Fifa’s highest paying sponsors, helping to boost marketing income to around £733 million. This money is spent by companies seeking to associate their brands with football and the World Cup. But what happens if consumers link them not to football, but to Fifa?

This fear was palpable during the run-up to Brazil 2014 as the governing body was stung by allegations of corruption and bribery in The Sunday Times.

The vote to award the 2022 World Cup to the tiny gulf state of Qatar was previously seen as foolhardy – playing and watching football in a desert summer was not everyone’s idea of a beautiful game – and was now plunged in to a full scale crisis.

Reputation

Michael Garcia

This report will be pored over by sponsors, the media and Blatter himself, who will hope that it helps to repair Fifa’s reputation by establishing once and for all the truth about the Qatar bid.

But anyone fooled in to thinking that Qatar will bring Blatter down are underestimating the political genius of the man who was first elected to football’s top job in 1998.

Blatter’s powerbase remains strong among the national associations he has supported since he joined Fifa in the mid-1970s and the organisation’s continued financial success cushions him against any attempts at defenestration.

More likely is that Blatter uses the Qatar scandal to his own advantage, jumping ahead of story to reposition himself as the agent of change, the white knight who brings in the reforms needed to modernise Fifa’s unwieldy decision making process.

This point was made by Michael Payne, who was head of Olympic marketing during the IOC’s Salt Lake bribery scandal in 2002. In the Financial Times, Payne wrote: “In the Machiavellian world of international sports politics, it is not beyond imagination that Fifa’s leadership even encouraged the sponsors to speak out – knowing that, as with the IOC, their actions could help drive through necessary reforms that would be otherwise impossible”.

After 16 years at the head of world football, the reign of Sepp Blatter shows few signs of ending anytime soon.

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