FIFA Posts A $369 Million Loss In 2016 As Scandals & Legal Probes Take Their Toll

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FIFA Posts A $369 Million Loss In 2016 As Scandals & Legal Probes Take Their Toll

If there was ever any hope that FIFA would eventually take its corruption problem seriously, it was rooted in the fact that it would cost football’s governing body too much money not to address it. Today we got an idea of how much money we’re talking about.

FIFA published their financial reports for 2016 today and the top-line figure is eye-popping— a loss of $369 million.

The red ink is seen as a direct result of corruption and bribery investigations from Swiss and American law enforcement authorities. In addition to being on the hook for extensive legal fees as the probes grind on, FIFA was also hit by a shortfall in commercial revenue as corporate sponsors bolted for the exits.

The official report (PDF), the first under the organization’s new reporting guidelines, lists the $369 million loss under the heading “Solid Financial Results 2016,” which is… interesting. The report also noted that FIFA had a positive operating cash flow of $149 million. So they’ve got that going for them. Which is nice.

In the report, the losses are blamed in part on global financial conditions and a trade slow-down.

”... it goes without saying that stagnant global trade and subdued investment, combined with investigations surrounding previous FIFA officials, have put pressure on the organisation’s overall revenue generation.”

FIFA’s losses in 2017 are expected to be even larger as legal fees stack up and sponsors balk at coming back into the fold. Conventional wisdom would anticipate these losses being made up in 2018, when FIFA is expected to clean up with the World Cup to the tune of over $1 billion. Yet even that is a source of worry— of the 34 slots available for in the organization’s World Cup sponsorship program, only 10 have been filled. So unless FIFA are willing to dramatically lower their prices (and their expectations), the organization may yet struggle to make their nut for the World Cup.

For the moment, FIFA is still committed to a revenue target of $5.5 billion in the four-year World Cup cycle. And maybe they’ll hit that target, or at least get close. But if they don’t, you can expect that the fallout will be very ugly.

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