FIFA revealed its latest annual report in which the football organization lost $369 million in 2016 and is expecting to post further losses in 2017.
Although the net loss of $369 million was affected by the timing of when costs and revenues are booked, FIFA’s financial situation seems to be not healthy at this time. A more accurate reflection of its financial business model is over a four year due to the World Cup cycle. In light of that, FIFA also confirmed that “a negative result is also expected in 2017”.
FIFA president Gianni Infantino further explained,
“2016 was the turning point when the first and vital steps to restore trust in the organization were taken. This includes employing a responsible and transparent way of managing revenue and expenditure. We are building a solid framework to ensure thorough oversight and proper accountability, and placing football at the heart of everything that our organization does: after all, we need to ensure that every bit of revenue is well invested in the game. In addition, due to the IFRS 15 revenue recognition, there was increased investment in football development and one-off extraordinary expenses. FIFA also tripled its direct investment in continental, regional and local football development through the Forward Programme”.
The huge loss recorded by FIFA was definitely affected by bad choices made such as the museum project that alone came to $190 million, and has been scaled back after it failed to attract the expected number of visitors after opening in Zurich last year. FIFA also implemented cost-cutting measures in a number of other areas, including the amount FIFA paid to its president: Gianni Infantino received $1.5 million in 2016, compared to the $3.7 million paid to Sepp Blatter in 2015.
There is positive news for FIFA as well. By the end of the 2015-2018 cycle, taking the lucrative revenue from the 2018 World Cup in Russia into account, FIFA expect a positive net result of around $100 million.