FIFA continues to take hits from investigations into its rampant corruption. The soccer organization reported $369 million in losses for 2016, mainly due to legal costs from the investigations and sponsors keeping their distance in the wake of a tumultuous time.
Now, it’s not uncommon for FIFA to lose money in the two years before the World Cup. But this loss is larger than usual. And the organization’s financial report said it expects even greater losses in 2017.
Of course, the other important thing to remember is that these are their own financial reports. And as a non-profit, they have no incentive to use accept accounting principles to make their revenues look strong; in fact, it’s probably the opposite. Plus, it’s FIFA, an organization that is probably attempting to hide money in a Swiss mattress as we speak.
FIFA has its eyes on a $1 billion profit in 2018, mostly from TV deals for the World Cup in Russia. That’s certainly likely, given how big a behemoth the World Cup is; only the Olympics rivals it as a global event. But it has only 14 more months to rally together more sponsors for the tournament with 24 of 34 slots still open.
From the financial report, according to the Associated Press:
“However, it goes without saying that stagnant global trade and subdued investment, combined with investigations surrounding previous FIFA officials, have put pressure on the organization’s overall revenue generation,” FIFA said in the 116-page financial report for 2016.
Legal bills reportedly accounted for more than $50 million last year, up from $20.2 million in 2015. Other losses were blamed on a new accounting policy (shocker!) and poor investments by former president Sepp Blatter (perhaps the best scapegoat in the history of scapegoats):
Using the new financial reporting standards, FIFA’s reported loss of $122 million in 2015 would have been recalibrated to a $52 million deficit. That suggests FIFA’s loss in 2016 would have easily exceeded $200 million under the old methods of booking contracted income.
The document also blamed Blatter’s regime for “ill-considered” investments on a soccer museum and adjoining four-star hotel in downtown Zurich. The World Football Museum lost FIFA $50 million in 2016, including some one-off costs, the soccer body said.
FIFA also spent $7.9 million on the February meeting in Zurich to elect (Gianni) Infantino, and paid $2.44 million in tax, mostly due to its subsidiaries.
There was a $5.6 million increase in payments to FIFA Council members, who received a combined $13.8 million — though $3 million was saved by not paying pension entitlements to former officials who were banned for unethical conduct.