Tuesday , December 6 2022

How does FIFA make money from football?

19-11-2022

ZURICH: Business is rarely this simple. If you manufacture a product which everybody wants to buy, but which costs you almost nothing to make, you are going to accrue a lot of money rather quickly.

In a nutshell, this is how FIFA, football’s world governing body, makes money.

In 2018, when the World Cup was hosted in Russia, FIFA made more than $4.6bn in revenue.

FIFA pays World Cup host countries’ organising committees, prize money, travel and accommodation for teams and support staff, plus a legacy fund to help develop the sport in the host country after the World Cup circus has left town.

The winners of the Qatar World Cup will receive $44m out of a total prize pot of $440m, paid by FIFA.

FIFA organises its accounts in four-year cycles around each World Cup. For the most recently published 2015-18 cycle, FIFA brought in $6.4bn. In 2021, a single non-World Cup year, FIFA took in $766m.

TV rights

Most of FIFA’s income comes from selling TV broadcast rights for the World Cup and other international tournaments.

Of the $6.4bn generated in the last cycle, $4.6bn came from TV rights.

Marketing rights

Global brands pay FIFA for the right to advertise at the organisation’s events. The biggest brands get to partner with FIFA on its development and social responsibility plans, meaning they have a foot in the door with FIFA’s non-profit side, investing in the sport of football at international, national and grassroots levels.

The next biggest brands are permitted to advertise at the World Cup which is the single most-watched televised event on the planet. About five billion people, more than half the Earth’s population, are expected to tune into this year’s tournament. That’s a big audience for selling things to.

In the pre-2018 World Cup cycle, marketing rights deals landed FIFA $1.66bn. And even in 2021, revenue from the sale of marketing rights amounted to a heathy $131m.

Ticket sales and hospitality

Another money-spinner for FIFA is gate revenue. The entire income from ticketing rights goes to a subsidiary company wholly owned by FIFA. In the 2015-18 cycle, this brought in $712m.

In 2021, ticket sales for the Arab Cup, when about 600,000 people attended, generated an estimated $12m. About three million tickets have been sold for Qatar 2022. And with prices ranging from $100-$1,100, it is sure to be another bumper year.

Branding and licensing

FIFA also draws in cash through the licensing of its brand. The best known of these is Electronic Arts’ series of FIFA football games, which reportedly generated sales of $20bn for EA over its 20-year partnership with FIFA.

The games manufacturer is understood to have paid FIFA in the region of $150m annually for the right to use the FIFA name.

In 2021, FIFA made $180m from licensing its brand for merchandise, retail and gaming. The same year, FIFA received a $201m award from the US Department of Justice as compensation for losses due to corruption after dozens of top FIFA executives were indicted in 2015. (Int’l News Desk)

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