FIFA gives $1.3 million bonus to its national federations [IWF]

FIFA gives $1.3 million bonus to its national federations [IWF]

By David Owen, Inside World Football

December 23 – FIFA has moved quickly to spell out how much in one-off financial contributions each if its 209 member associations will next year be entitled to, and the answer is $1.05 million. Adding in a first $250,000 bonus already made available, it means that each association will be eligible for $1.3 million of one-off payments over the 18 months from June this year. The overall bill for this comes to $271.7 million.

In a letter to FIFA members, Jérôme Valcke, secretary general, confirmed that FIFA members would receive an “additional bonus” of $500,000, “in connection with the final financial results of the 2014 FIFA World Cup Brazil”. This would be in addition to a $300,000 payment to those participating in 2018 World Cup qualifiers which was first alluded to following last week’s FIFA Executive Committee meeting in Marrakech.

“Consequently and in summary,” Valcke wrote, “this means that in 2015, each member association will be entitled to receive $1,050,000: $250,000 for the 2015 Financial Assistance Programme (FAP); $500,000 as a one-off financial bonus; and $300,000 as support for the preparation of and participation in the 2018FIFA World Cup qualifiers”.

He went on: “This sum is in addition to the first tranche of $250,000 of the bonus that was made available after the 2014 FIFA Congress. Therefore, the total one-off contributions made to member associations as a result of the good financial results of the 2014 FIFA World Cup amount to $1,050,000 each plus, as mentioned, the normal 2015 FAP contribution of $250,000, making a grand total of $1,300,000.

The scale of the payments, at a time when past accounts have suggested the governing body may be poised to swing into deficit, promises to make FIFA‘s 2014 and 2015 annual reports particularly interesting reading.

According to a detailed budget for 2014 (included, somewhat confusingly in the 2012 financial report) budgeted revenue for the year was put at $1.08 billion and investments at $1.41 billion. Based on what happened in the first three years of the World Cup cycle, both figures in actuality will almost certainly be higher. Yet the budgeted deficit, based on those numbers, comes out at $330 million, and that presumably was before allowance was made for bonus payments.

A further FIFA blueprint for 2015-18 indicates that deficits are possible in 2015 and 2016 as well.

With reserves of some $1.4 billion, the organisation has the capacity to afford a period in which expenses outstrip revenues. It is also possible that FIFA has generated enough extra revenue in 2014 and 2015 to allow these payments to be made while remaining in surplus. However, with a single quadrennial event – the World Cup – still accounting for the vast majority of the organisation’s income, retention of a significant reserve is plainly desirable.