FIFA reports $631-m profit on 2010 World Cup

Saturday, March 05, 2011

ZURICH, Switzerland (AP) — FIFA made a $631 million (euro 452 million) profit from the 2010 World Cup in South Africa, according to accounts published Thursday.

FIFA's results for its four-year financial cycle showed income of $4.19 billion (euro 3 billion) from broadcast and commercial deals, with 87 per cent tied directly to its marquee event.

Revenue rose 59 per cent compared to the four years prior to the 2006 World Cup in Germany, although that tournament generated a bigger profit of $663 million.

The income easily covered rapidly rising spending by football's governing body of $3.56 billion (euro 2.55 billion) on running costs and development projects from 2007-2010.

FIFA President Sepp Blatter described himself as "the happiest man today" announcing the results.

"The World Cup in South Africa was a huge, huge financial success, for Africa, for South Africa and for FIFA," Blatter said.

FIFA's profit in 2010 alone was $202 million (euro 145 million), keyed by broadcast deals that outstripped expectations.

Total European TV sales for the 2010 World Cup were $1.29 billion, and North America contributed $211 million.

The 2010 World Cup has helped raised FIFA's reserves to $1.28 billion (euro 0.92 billion).

The 2014 World Cup in Brazil is likely to be equally lucrative. FIFA already has completed most contracts after signing nearly all broadcasters and sponsors to two-tournament packages.

In the report, FIFA vice-president and finance committee chairman Julio Grondona pledged to spend $800 million on development projects through 2014.

"Plans have been put in place to ensure that a significant proportion of FIFA's revenue is reinvested in football, which will generally lead to lower annual results," Grondona wrote.

FIFA also has paid $100 million into a legacy fund supporting football in South Africa.

FIFA paid no tax on World Cup earnings because of exemption agreements with South Africa's government, and its status in Swiss law as a non-profit association which invests its money in football development.

Swiss-based FIFA subsidiaries, including operations to monitor betting and player transfers, had $893,000 (euro 640,600) in combined income tax expenses.

Finance director Markus Kattner defended FIFA from suggestions that its spending was excessive.

"Standards that are imposed on FIFA are so high that fulfilling these requirements, which come from all over, puts us in a position where we have to deliver on a high level," he said.

The report revealed that FIFA's salary bill in 2010 had grown to $65.3 million paid to 387 employees, at an average of $168,700. Two years ago, FIFA paid $42.4 million in wages to 315 staff, at an average of $134,600 -- although the dollar has since reached historic lows against the Swiss franc. Blatter's financial package was not detailed.

FIFA said a fund that pays pensions to retired executive committee members was topped up with $4.4 million and stands at $16.8 million. Only members who served at least eight years on the ruling panel are eligible for payments.