Dubai: Postponement of several competitions as a result of the coronavirus pandemic during the course of 2020 has forced an automatic cut in revenues of FIFA for this year.
Consequently, the world governing body for football is now budgeting for this year’s revenues to come in at little more than half of its original projections, mainly due to the cancellations as a result of the existing coronavirus pandemic.
FIFA’s revised budget that was made public last week has put the total revenue for the current year at just $250 million (Dhs 917.5 million) – at least 48.3 per cent down on the $484 million that had been originally forecast in a detailed budget for 2020 published as part of the world governing body’s 2018 financial report.
The men’s and women’s Olympic football tournaments in Tokyo, the under-17 and under-20 Women’s World Cups in India and Costa Rica-Panama respectively and the 2020 Futsal World Cup in Lithuania are among the main competitions during 2020 that have been postponed due to the coronavirus.
Expected revenues and expenses associated with these tournaments have broadly been pushed out into 2021, and provided they can ultimately take place, the main financial impact on FIFA will be on originally projected cash flows, with associated revenues materialising later than originally expected, rather than being lost altogether.
For example, FIFA would normally have expected to receive the bulk of the approximately $25 million it can expect from Tokyo 2020 this coming September or thereabouts. Now, even if the Games do take place, the money will not appear until September next year.
Another tournament, the 2020 FIFA Club World Cup in Qatar that will probably be the last in the present format, is currently still being planned to be held in December.
With such a grim situation continuing for some more time, it now looks possible that the $112 million licensing rights fees may be the single biggest revenue source for FIFA this year.
During the previous 2015-’18 financial cycle, it had been surging licensing revenue that was instrumental in helping FIFA out as the football body battled to counter the impact on its business following the sport suffering a low point after the ouster of Sepp Blatter and his supporters.
In 2018 alone, the $185 million contribution to revenue from licensing rights was said to be 206 per cent higher than budgeted, mainly driven by the FIFA eWorld Cup 2018 grand final.
The budgeted costs for 2020 have now been put at $1.04 billion – that’s only $64 million down from the just under $1.11 billion originally stipulated.
The overall picture is that this year’s deficit before taxes and any financial result has now been projected to be a hefty $794 million, up from $624 million that had been originally budgeted.
The world governing body has carried out a series of cuts during the course of the year with budgeted spending on competitions and events being cut by $78 million to its current $122 million.
And while the tournament costs have been pushed into 2021, FIFA has further shaved $5 million off the original $31 million (£25 million/€27 million) projected cost of the club protection programme.
The budgeted development and education spend has been lifted to $620 million from $578 million and projected FIFA governance and administration costs have come down by $28 million to $211 million, with nearly half the saving coming from an expected $13 million reduction in the cost of the annual Congress and committee meetings.