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Tuesday, June 30, 2020
Coronavirus Heavy Toll on FIFA 2020 Revenues

FIFA is now budgeting for this yearís revenues to come in at little more than half of its original projections, as a consequence of coronavirus.

A revised budget published last week puts total revenue for the current year at just $250 million.

This is 48.3 per cent down on the $484 million originally forecast in a detailed budget for 2020 published as part of the world governing bodyís 2018 financial report.

The COVID-19 pandemic has forced the postponement of several competitions originally scheduled for this year.

These include the menís and womenís Olympic football tournaments in Japan, as well as the under-17 and under-20 Womenís World Cups in India and Costa Rica-Panama respectively, plus the 2020 Futsal World Cup in Lithuania.

Expected revenues - and expenses - associated with these tournaments have broadly been pushed out into 2021.

Provided they can ultimately take place, the main financial impact on FIFA will be on originally projected cash flows, with associated revenues materializing later than originally expected, rather than being lost altogether.

For example, FIFA would normally have expected to receive the bulk of the approximately $25 million it can expect from Tokyo 2020 this coming September or thereabouts.

Now, even if the Games take place, the money will not appear until September 2021.

One other tournament, the 2020 FIFA Club World Cup in Qatar, probably the last in the present format, is currently still planned for this coming December.

It looks possible that licensing rights may now be the biggest single revenue source for FIFA this year.

Licensing revenue for 2020 was originally forecast at $112 million and, since much of this is thought to be linked to esports, there seems the scant reason why it should be much - if at all - reduced.

Surging licensing revenue was already instrumental in helping FIFA out in its previous 2015-18 financial cycle, as it battled to counter the impact on its business of the reputational issues that engulfed it as the Sepp Blatter era drew to a tumultuous close.

In 2018 alone, the $185 million contributions to revenue from licensing rights was said to be "206 per cent higher than budgeted", mainly driven by the FIFA eWorld Cup 2018 Grand Final.

Budgeted costs for 2020 are now put at $1.04 billion - down just $64 million, or 5.8 per cent, from just under $1.11 billion originally stipulated.

Budgeted spending on competitions and events has been cut by $78 million to $122 million.

As well as the tournament costs that have been pushed into 2021, FIFA has shaved $5 million off the original $31 million projected costs of the club protection programme.

By contrast, the budgeted development and education spend has been lifted to $620 million from $578 million.

Projected FIFA governance and administration costs have come down by $28 million to $211 million, with nearly half the saving accruing from an expected $13 million reduction in the cost of the annual Congress and committee meetings.

The overall picture is that this yearís deficit before taxes and any financial result is now projected to be a hefty $794 million, up from $624 million originally budgeted.

The FIFA World Cup, next scheduled for Qatar in 2022, generates the vast bulk of the body's well over $6 billion quadrennial revenues.
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