FIFA is the international football federation. They invest a lot of money in organizing the World’s best show and other football events. But do you know where they get lots of money to organize all these events? If you know, it’s excellent, but if you don’t know need to worry. We are here to let you know about the whole secret behind FIFA’s funds.
Television broadcasting rights
Between 2015 and 2018, television rights contributed 49% (or around 3 billion USD) of FIFA’s total revenue of $6.4 billion. Television networks and other media entities may purchase FIFA licenses to broadcast matches and other related things in certain areas. Because of the sport’s worldwide popularity, broadcasters often face fierce competition for the right to transmit games. FOX outbid Disney’s ESPN by over $400 million for World Cup broadcast rights until 2022; Facebook, Snap, and Twitter offered FOX million dollars for highlights.
Companies worldwide are eager to pay FIFA money in return for advertising space during the organization’s competitions. FIFA’s non-profit development and social responsibility programs welcome the World’s top enterprises to join, enabling them to promote football globally, nationally, and locally. The World’s best show is the most-watched television event on the planet, enabling ads from the World’s second-largest corporations. That’s a huge demographic in terms of prospective sales.
Catering and revenue from ticket sales
FIFA earns money from gate proceeds as well. Ticket sales revenue is split evenly between FIFA and a wholly-owned subsidiary. This generated $712 million between 2015 and 2018. Ticket sales for the 2021 Arab Cup, attended by 600,000 people, are expected to generate $12 million. Qatar 2022 has sold about three million tickets as of now. With costs ranging from $100 to $1,100, this year will surely be a hit.
Marketing, branding, and celebrity endorsements
FIFA also profits from trademark licensing. Most notably, Electronic Arts’ 20-year partnership with FIFA produced the FIFA video game brand, which earned EA $20 billion in sales. The game manufacturer pays FIFA an estimated $150 million yearly for the right to use the FIFA trademark. FIFA received around $180 million in revenue from merchandise, retail, and gaming licensing in 2021. After scores of high-ranking FIFA executives were jailed for corruption in 2015, the US Department of Justice granted FIFA $201 million to compensate for their financial losses. The license cycle from 2015 to 2018 was valued at $600 million. This payment is derived through the sale. They are trademark licensing agreements, royalties, and other similar sources.
FIFA’s Business Strategy
The World Cup’s best show always got the most views on television and was a significant financial bonanza for FIFA. During these events, television rights, marketing rights, licensing rights, and ticket income contribute considerably to FIFA’s bottom line. FIFA has modest overhead costs, allowing them to spend as much as possible on the sport’s expansion.
With so many bids, FIFA has significant power and can dictate most World Cup specifications. The host nation, not FIFA, is responsible for financing and constructing all World Cup infrastructure. When FIFA chooses a host country for the World’s best show, it funds the host country’s organizing committee. Costs for staff and match officials travel for players, and prize money for competing nations are also covered. In addition, the host country will have access to a FIFA World Cup legacy fund, which will be used to help expand the sport in the long term.
Planning for the Future
FIFA will continue to get profit from the World’s best show as long as football is in a great position. In reaction to the previous years’ corruption issue, future FIFA efforts include:
- Ensuring adherence to compliance measures.
- Promoting equal rights of men and women through football