Gianni Infantino FIFA (Insidefoto)

In their latest annual report, FIFA revealed that they lost $369 million in 2016 and are expecting to post further losses in 2017.

The net loss of -$369 million was partly the result of the new IFRS 15 revenue recognition standard that FIFA adopted, which affected the timing of when costs and revenues are booked to give a more accurate reflection of their financial business model over a four year World Cup cycle. As a result, FIFA confirmed that “a negative result is also expected in 2017”.

“2016 was the turning point when the first and vital steps to restore trust in the organisation were taken,” FIFA president Gianni Infantino explained. “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 organisation does: after all, we need to ensure that every bit of revenue is well invested in the game.”

In addition to the IFRS 15 revenue recognition, there was “increased investment in football development and one-off extraordinary expenses”. FIFA provided further details of these increased expenses, revealing that they had tripled their direct investment in “continental, regional and local football development through the Forward Programme”.

The “significant” extraordinary expenses included legal costs (up to $50.2 million from $20.2 million in 2015), the Extraordinary FIFA Congress, and “ill-considered” previous investments in the FIFA World Football Museum and Hotel Ascot. The museum project 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. Further cost-cutting measures were made 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 was further positive news for FIFA as well. World football’s governing body confirmed that they had achieved their revenue targets “despite stagnant global trade and investigations surrounding previous FIFA officials”, and indeed were beating their targets, with 76% of the total forecast revenue for the four year period 2015-2018 already contracted. Positive cash flow for 2016 alone totalled $149 million.

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. An exact figure is impossible to estimate at this point, as they are still searching for new World Cup sponsors. Major sponsorship deals with the likes of Sony and Emirates ended after the last World Cup in Brazil, and although a sponsorship deal was recently signed with electronics group Hisense, further partnerships are envisaged.