FIFA flags $280m loss for 2019 and will raid reserves to fund $1.5bn Covid relief plan

By David Owen

June 26 – FIFA will raid its well-stocked reserves to finance a COVID-19 relief plan that will make up to $1.5 billion available to the wider “football community”.

A 12-page document circulated in the wake of Thursday’s Council meeting includes projections showing a drawdown of well over $1 billion from reserves over the present cycle, sending them plunging from $2.745 billion at end-December 2018 to approximately $1.6 billion four years later.

A revised budget for 2019-22, by contrast, shows relatively little change from the original budget for the cycle, which was published in the governing body’s 2017 financial report.

The revenue forecast has been revised down from $6.56 billion to $6.44 billion, with FIFA making the point that a large proportion of rights have already been contracted.

For example, looking at its biggest revenue stream, TV broadcasting rights, 94% of the budgeted $3.3 billion of receipts are said to have been contracted.

Assuming that Qatar 2022 can actually take place, therefore, FIFA, as one might expect, looks reasonably-placed to weather the coronavirus storm with something to spare, notwithstanding the high cost attached to its relief plan.

Even so, the cycle now looks very different from the expansionist vision mapped out by President Gianni Infantino before the pandemic hit, with the expanded Club World Cup, originally set for China next year, still not rescheduled.

FIFA said that as soon as a new date for the competition had been set, it would “revise its revenue budget upwards accordingly”.

The body still seems to be taking a conservative view about hospitality rights and ticket sales in the present cycle, which would come overwhelmingly from the 2022 World Cup.

These are put at $508 million in the revised budget, compared with a combined $689 million in 2015-18 and $711 million in 2011-14.

The new figures indicate that FIFA made a loss before taxes and financial result of $280 million in 2019, with further losses of $794 million and $518 million anticipated in 2020 and 2021 respectively.

These are projected to be balanced out by a bumper $1.69 billion profit in 2022, when the bulk of the body’s quadrennial revenues would be recognised.

This would leave a small surplus for the cycle as a whole, just as with the original budget.

FIFA said its planned investment in football would “continue unchanged” for the revised full 2019-2022 cycle.

The modest decline, from $6.46 billion to $6.34 billion in projected investment/expenses would come from a reduction in the expense budget, explained partly by a “reduction in costs relating to the legal investigations due to the release of provisions that had been created for them”.

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