Business | Head in the turf

One year before the World Cup, FIFA is shunned by sponsors

It recently replaced officials serving on its ethics committee

|ZURICH

AT THE World Football Museum in Zurich, run by FIFA, football’s global governing body, visitors take their photo with the World Cup trophy, try their hand at match commentary and gawk at artefacts ranging from the original handwritten set of the rules of the game to the yellow card famously shown to Paul Gascoigne, a lachrymose English footballer, in 1990. Those wanting a glimpse of the luxurious bedsheets that were used to shield FIFA officials as they were hustled out of a ritzy Swiss hotel in 2015 having been arrested on corruption charges may feel cheated—they are not on display.

If FIFA’s shrine to itself ignores this squalid period of its history, its balance-sheet bears the traces. FIFA lost $369m in 2016, triple the losses of the year before, and forecasts a loss of $489m in 2017. Reserves, which have been above $1bn since 2008, are predicted to fall to $605m next year.

The latest loss is partly because of higher development funding for member football associations, and partly because of accounting changes on how costs and revenue are booked. But the probes into alleged bribery and corruption launched by American and Swiss law-enforcement officials have not helped. FIFA’s legal bills rose from $20m in 2015 to $50m in 2016. Its financial statements also bemoan a series of “ill-considered” investments, including the museum, which cost $190m and has failed to attract many visitors.

FIFA still thinks it will meet its revenue target of $5.6bn over the 2015-18 cycle, thanks to a steep rise in revenue from the 2018 World Cup in Russia. But that depends on money from television and sponsorship. Several sponsors, including Sony, Emirates and Castrol, have not renewed their contracts. With less than a year to go before the tournament, FIFA has lined up only 12 sponsors out of the 34 slots on offer. It has attracted one local backer, the Moscow-based Alfa-Bank, and is without a broadcaster to carry the games in the host country. At the same stage before the 2014 World Cup in Brazil, most sponsorship slots were filled, with many deals agreed to years in advance. “With one year to go, this situation is unheard of,” says Michael Payne, a former marketing chief for the International Olympic Committee.

FIFA’s latest sponsorship deal is with China’s Vivo, a smartphone-maker. It is the third Chinese firm to back FIFA; the country is believed to be considering a World Cup bid of its own. Chinese firms’ stance appears to be that FIFA is changing after its scandal. But questions remain. In May FIFA replaced a judge and a prosecutor serving on its ethics committee with new people. The outgoing officials were responsible for the investigations that led to the suspension of Sepp Blatter, a former FIFA president, and other top officials. They claimed that their dismissal, with hundreds of investigations in progress, would mean the “de facto end to the reform efforts”. Gianni Infantino, FIFA’s new boss, described it as a “storm in a teacup”. That message, like FIFA’s broadcast rights, may prove a tough sell.

This article appeared in the Business section of the print edition under the headline "Head in the turf"

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