KEIR RADNEDGE REPORTING —- FIFA has owned up to the massive cost of allowing its own credibility to be undermined by a culture of corruption within: $122m.
The stark lesson of recent events may even prompt the world football’s federation’s lawyers to consider whether civil action should be instigated against Sepp Blatter, executive president for the past 18 years, and Jerome Valcke, secretary-general for half of them.
The annual accounts have revealed – for the first time – that Blatter was being paid a $3.7m salary in his final year and Valcke $2.1m, all excluding significant bonuses and benefits.
The Financial Times has equated the sums as “roughly in line with the pay of key executives of top English Premier League clubs.”
This was the first time FIFA’s finances have dipped into the red since 2002, a similar year of scandal when its finances were rocked by the fall-out, among other issues, from the criminal bankruptcy of former marketing partner ISL/ISMM.
Blatter has been banned from football for six years, a verdict and sentence he is challenging at the Court of Arbitration for Sport. Valcke has also denied wrongdoing. Both are under criminal investigation by the Swiss authorities.
Exco pay rates
The pay for Blatter, Valcke, FIFA’s 24-person executive committee and the organisation’s other directors amounted to $27.9m. Annual remuneration for an exco member was revealed at $300,000 including allowances and pension payment for those who have served at least eight years.
Senior figures earned significant sums for committee leaderships. Thus Issa Hayatou, as chairman of the finance committee received $500,000 (on top of his $300,000) because of “additional responsibility.”
This may interest his colleagues and critics within the African Football Confederation of which he is also president (benefits confidential).
The accounts showed that the $122m loss was due largely to a $240m increase in costs from the previous four-year World Cup cycle (2007-2011).
FIFA said this was attributable partly to an expansion in the development budget but a significant influence had been “unforeseen costs” such as legal fees of $62m.
These clearly arose from dealing with the fall-out from the triple scandals of the 2018-2022 World Cup bid process, the FIFAGate corruption farrago and the Blatter/Platini ‘disloyal payment’ saga.
The loss contrasted with a substantial surplus in all four previous years courtesy of revenues generated by broadcasting and sponsorship revenues attached to the World Cup, FIFA’s only profitable activity.
Revenue from FIFA’s top tier partners increased from $177.1m to $180m but income from World Cup sponsors dropped from $131m to $44.5m in 2015 after the expiry at the end of 2014 of contracts with Johnson & Johnson, Castrol and Continental.
FIFA sources have conceded that the signing of new sponsors has been frozen over the past year because of the weight of image-battering scandal and uncertainty.
The report wrapped this up as a “slower pace of finalising revenue-generating contracts”. The sale of marketing rights for the 2018 World Cup in Russia remained “ongoing”.
FIFA was “confident that the reforms under way will help to restore trust with commercial partners and achieve the budget goals for the 2015-18 cycle.”
It conceded: “The unprecedented events that occurred in 2015 have impacted upon FIFA’s financial results, however the organisation’s healthy reserves have allowed it to weather the storm.”
In a series of questions and answers on its website, FIFA said that the salary packages of Blatter, Valcke and other ‘key management personnel’ had been decided by its compensation sub-committee.
The membership comprised Issa Hayatou, who has just stepped down as acting president, Domenico Scala, the Swiss business who chairs the audit and compliance committee, and indepedent executive search consultant Jean-Pierre Pedrazzini.
Since the report concerned the year and cycle up to 2015 it did not refer to the salary being paid to new president Gianni Infantino, who was elected last month to succeed Blatter.
Infantino, in an accompanying statement, said: “With the recently approved reforms, I believe that we have turned a corner and that FIFA is poised to emerge stronger than ever.
“During my presidency, I pledge to make this happen and to lead FIFA to a brighter and more sustainable future so that we can all return our full focus to football.”
The revised budget for 2015-2018 has been increased from $900m to $1.4bn to reflect an expansion of development expenditure which, coincidentally, had been one of Infantino’s campaign pledges.
Projected revenues for 2015-2018 had been revised upwards from $5bn to $5.65bn with projected investments amounting to $5.55bn.
View the full report at https://t.co/ItPod0q69U+