ZURICH: FIFA has reported a loss of $369m for its 2016 financial year and is projecting an even bigger loss for 2017 writes KEIR RADNEDGE.
However the true state of the world football federation’s accounts will not become clear for another two years until after the four-year cycle which includes the 2018 World Cup from which the bulk of TV and rights revenue will accrue.
FIFA has not only updated and changed its accountancy reporting method but is still paying in both revenue and costs terms for the the corruption scandal which led to the mass clear-out of directors and senior staff.
The organisation has switched to the new IFRS 15 revenue recognition standard in a bid to more accurately reflect the organisation’s business model over a four-year cycle.
But accounts for 2016 due to be approved by congress in Bahrain in May include legal bills of more than $50m, up from $20.2m in 2015 as the cost of pr0tecting FIFA against tje risk of direct action by the Swiss and United States authorities which are still carrying out their investigations.
FIFA reported $502m in income last year while reporting expenditure of $893m. The rise in spending was partly caused by president Gianni Infantino’s campaign pledge to increase grants to national, regional and continental bodies. The 211 member federations are now entitled to $5m from each World Cup.
An even bigger loss is expected next year but FIFA has said the new reporting method is expected to see $1bn of profit in the accounts for 2018. FIFA is also maintaining its revenue target of $5.56bn in place for the four-year cycle connected to next year’s World Cup.
Infantino said: “[The year] 2016 was the turning point when the first and vital steps to restore trust in the organisation were taken. 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. The FIFA Forward Development Programme is an embodiment of this commitment.”
Tomaž Vesel, the chairperson of the audit and compliance committee, added: “By adopting an unyielding compliance attitude, FIFA has given a much-needed signal of intent to evolve and never again face the problems of the all-too-recent past. Clear rules and principles of good governance have led to unwavering action.”
Many of those ‘rules and clear principles’ were laid down by Vesel’s predecessor, Domenico Scala, who resigned the audit chair last year in protest at Infantino’s removal of an independence guarantee for FIFA’s judicial committees.