The worm turns: new 2023 financials point to long-delayed sponsorship uplift for Infantino’s FIFA

It is not every day that one surveys the annual performance of a venerable 120-year-old organisation, notes a near $400 million loss, and concludes that business is ticking along very nicely. Then again, the organisation is FIFA and the business is football – a realm which, you might often be forgiven for thinking, operates in keeping with a commercial logic that is entirely its own.

To understand why these 2023 numbers constitute such a positive, perhaps ground-breaking, showing for the governing body, you need to bear in mind two things. First, that this was the first year of a new four-year cycle that will culminate with the first supersized 48-team men’s World Cup, FIFA’s cash cow par excellence. Second, that when FIFA released its 2023 budget, tucked away in the 2021 annual report https://publications.fifa.com/en/annual-report-2021/2021-financials-and-2023-budget/2023-budget/ , it was projecting a much bigger deficit of some $900 million, before factoring in taxes and financial income.

So what changed? What aspects of the Zurich body’s business outperformed expectations so markedly? The answer is potentially hugely significant. A big chunk of the better-than-expected performance was down to marketing, aka sponsorship. This generated just under $456 million – almost exactly double what was budgeted.

This represents a massive turn for the better.

Marketing was FIFA’s second-biggest source of revenue over the 2019-2022 period, accounting for a total of $1.795 billion. But this was up only around 8% from the figure of $1.66 billion for 2015-2018; and that in turn was less than 2% higher than the $1.629 billion of 2011-2014.

If the level of performance achieved in 2023 can be sustained – and the eye-popping $11 billion overall revenue budget for the current World Cup cycle released last year included a 50% jump to $2.69bn from marketing https://publications.fifa.com/en/annual-report-2022/finances/2023-2026-cycle-budget-and-2024-detailed-budget/– it would signify that FIFA’s sponsorship worm really had at long last turned; that the long spell in the doldrums while the marketing takings of some other leading international sports bodies soared was finally over; that the organisation’s image problems were fading in the eyes of the multinational corporations and other bodies with pockets deep enough to write sponsorship cheques of this magnitude.

FIFA boss Gianni Infantino and his colleagues undoubtedly have to thank the success of the 2023 Women’s World Cup for the progress made so far. As the governing body noted: “FIFA…adapted its sales strategy for commercial partnership rights with the aim of accelerating the growth and equality of the women’s game. Thanks to the dedicated sponsorship programme for women’s football, all sponsorship packages available for the FIFA Women’s World Cup were sold. These included five global FIFA Partners, two global Women’s Football Partners, nine global FIFA Women’s World Cup Sponsors and 14 Tournament Sponsors. This makes a total of 30 Partners and Sponsors, more than twice as many as there were for the FIFA Women’s World Cup 2019.”

But there was also a clue in the new figures to suggest that the body’s sponsorship boost is likely to prove broader-based than this.

2023 saw FIFA rake in $245.7 million from its Partners, the top tier of its sponsorship hierarchy. OK, this amounts to less than a quarter of the $1.05 billion coughed up by Partners over the 2019-2022 cycle. But these payments are typically weighted heavily, as you might expect, towards men’s World Cup-year. If you compare last year’s $245.7 million with the $139.1 million handed over by Partners in 2019, the corresponding year of the prior World Cup cycle, you come up with a jump of just under 77%.

Now, with a heavily revamped Club World Cup in prospect in 2025, as well as that giant 2026 men’s World Cup, FIFA’s 2023-2026 Partners should have considerably more football product to exploit than they did in the previous cycle. Some uptick in the fees they pay was for this reason only to be expected.

But the feeble growth of recent cycles left plenty of room for doubt as to just how big an advance FIFA would be able to secure. The new 2023 financials go a long way to erasing such questions.

Suppose now that the 77% increase in the 2023 Partners payment compared with 2019 is sustained for the full cycle. That would lift the top tier’s contribution from $1.05 billion in 2019-2022 to something like $1.86 billion in 2023-2026.

Partners yielded 58.5% of FIFA’s overall marketing revenue in 2019-2022. Will this proportion be similar in 2023-2026? Who knows. But if it is and that $1.86 billion figure turns out to be on the money, then $3 billion of sponsorship revenue for 2023-2026 suddenly looks to be within reach.

The budget, included in that seemingly ambitious $11 billion projection, as already noted, is $2.69 billion. This has the look of a major turnaround.

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 moc.l1712078976labto1712078976ofdlr1712078976owedi1712078976sni@n1712078976ewo.d1712078976ivad1712078976