Coronavirus exacts heavy toll as FIFA projects 2020 revenues down by almost 50%

By David Owen

June 30 – FIFA is now budgeting for this year’s revenues to come in at little more than half of its original projections, as a consequence of coronavirus.

A revised budget published last week puts total revenue for the current year at just $250 million. This is 48.3% down on the $484 million originally forecast in a detailed budget for 2020 published as part of the world governing body’s 2018 financial report.

The Covid-19 pandemic has forced the postponement of several competitions originally scheduled for this year. These include the under-17 and under-20 Women’s World Cups in India and Costa Rica/Panama respectively, the 2020 futsal World Cup in Lithuania and the men’s and women’s Olympic football tournaments in Japan.

Expected revenues – and expenses – associated with these tournaments have broadly been pushed out into 2021. Provided they can ultimately take place, the main financial impact on FIFA will be on originally projected cash flows, with associated revenues materialising later than originally expected, rather than lost altogether.

One other tournament, the 2020 FIFA Club World Cup in Qatar, probably the last in the present format, is currently still planned for this coming December.

It looks possible that licensing rights may now be the biggest single revenue source for FIFA this year.

Licensing revenue for 2020 was originally forecast at $112 million and, since much of this is thought to be linked to esport, there seems scant reason why it should be much – if at all – reduced.

Surging licensing revenue was already instrumental in helping FIFA out in its previous 2015-18 financial cycle, as it battled to counter the impact on its business of the reputational issues that engulfed it as the Sepp Blatter era drew to a tumultuous close.

In 2018 alone, the $185 million contribution to revenue from licensing rights was said to be “206% higher than budgeted”, mainly driven by FIFA eWorld Cup Grand Final 18.

Projected costs for 2020 are now put at $1.04 billion – down just $64 million, or 5.8%, from the just under $1.11 billion originally forecast.

Expected spending on competitions and events has been cut by $78 million to $122 million. As well as the tournament costs that have been pushed into 2021, FIFA has shaved $5 million off the original $31 million projected cost of the club protection programme.

By contrast, the projected development and education spend has been lifted to $620 million from $578 million.

Projected FIFA governance and administration costs have come down by $28 million to $211 million, with nearly half the saving accruing from an expected $13 million reduction in the cost of the annual congress and committee meetings.

The overall picture is that this year’s deficit before taxes and any financial result is now projected to be a hefty $794 million, up from $624 million originally budgeted for.

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