Friday, June 5, 2009

Hey Look, Financial Windfalls

Despite the heavy debt loads of some individual clubs, soccer's governing body is swimming in cash. From the AP:

FIFA said Wednesday that it turned a $184 million profit in 2008, remaining 13 percent under its own budget and not losing any money on assets during the year. FIFA collected $957 million in revenue, mostly off additional television and marketing deals struck for the 2010 World Cup.
The sport's governing body had revenue of $957M on expenditures of $773M. The profit was summarized by FIFA president Sepp Bladder Blatter thusly: "We are in a sane, one could even say comfortable financial position."

So even as credit is hard to come by and consumer spending has been negatively impacted by the zeroing of pools of CDO's, people still pony up for football. Keep in mind that the GFM didn't really start until late in the year (circa October) and that the subsequent impact on revenues might not take full effect until this year.

Even as Blatter proclaims FIFA are in good shape, it's a bit of white lie. They are already projecting a $560.4 loss for next year as costs for the World Cup kick in. Additionally, most of the revenue (primarily from television) has already been booked.

And there are additional worries for FIFA with respect to the World Cup which could widen the budget gap next season, particularly the specter of commercial partners not meeting contractual sponsorship obligations. FIFA made no specific comments on those partners during their Bahamian getaway. In fact they were so thin on specifics about 2010 that Dutch delegate Harry Been objected to advanced material as it contained just one single page on next year's budget.

But as corporations look at their budgets and look for places to cut corners, lavish sports sponsorships are going to look pretty tempting. Bank of America has already come out and said they are considering not renewing sponsorship of US Olympic Committee.


WhiteSpeedReceiver said...

It would have been $200 million in profit, but Jack Warner needed a new business-related jet, yacht, mansion, and gold-plated toupee.

phil said...

Bud Selig scoffs at their puny $184 mil profit.

Precious Roy said...

Isn't $184M what Selig pays himself?