By David Owen
I can well imagine how much FIFA boss Gianni Infantino looks forward to my words of advice, dispensed periodically via this website. So let me dredge up another pearl: Mr president, perhaps you should consider focusing a little less on developing grandiose new revenue surges geared to ever bigger and more frequent competitions, and a little more on nurturing the revenue streams FIFA already has.
The thought is prompted by this week’s statement by Cam Weber, group general manager at EA Sports, the people behind the FIFA video games. This included the disclosure that the company is “reviewing” its naming rights agreement with FIFA.
In a sense, it is not surprising: in the adrenalin-fueled, high-octane world of video gamers, it does seem a bit odd that such a successful product is named after an organisation mainly populated by men in suits and founded as long ago as 1904. You could be forgiven for thinking that something along the lines of, I don’t know, ‘Smackdown in the Maracanā’ would be more in keeping with the ethos of the genre.
But I am more mindful of what a nice little earner this appears to have become for FIFA – the governing body FIFA, that is.
Cast your mind back to March and the appearance of the organisation’s 2020 financial statements. In a pandemic-blighted period, these showed a hefty $778 million loss before taxes and financial income. This was nevertheless better than a revised forecast of $794 million published in June 2020.
What I found more interesting, though, was the revenue breakdown. As I put it at the time, “In what is potentially a landmark moment for sport, FIFA appears last year to have generated more revenue from video gaming than from football.”
Specifically, $158.9 million of the governing body’s $266.5 million in total revenue for the year came from licensing rights. FIFA further explained: “A key source of revenue in the licensing rights area was brand licensing for video games. In contrast to the many economic sectors that were drastically affected by COVID-19, the video game industry proved far more resilient to the pandemic.”
I concluded: “This might very well be the first instance in history of a traditional sports governing body generating more in a year from video games than the underlying physical activity that is its raison d’être.”
Seen in this light, Weber’s cheery sign-off to EA Sports customers – “We look forward to creating the future of football with you” – is perhaps less hubristic than it initially appears.
This is not, then, a trifling matter for Infantino and his lieutenants. Yes, revenue from the men’s World Cup still dwarfs everything else in FIFA’s four-year business cycle. In non-World Cup years, however – currently three out of four – licensing rights represent a significant inflow of cold, hard cash.
Plus, there is the intangible benefit of having the governing body’s brand perpetually on the lips of hard-gaming teens, and younger, an integral part, seemingly, of sport’s screen-based future.
Who knows, perhaps Electronic Arts is simply manoeuvring for a more advantageous deal. Perhaps FIFA 23 will duly appear around this time next year with the regularity of the seasons.
But if it does not, I for one will not be underestimating the blow it may be for FIFA’s expansionist agenda.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938. Contact him at firstname.lastname@example.org