econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 07 August 2015

FIFA's Loss Of Faith From Sponsors Could Be Very Costly

Written by

Recently FIFA (Federation Internationale de Football Association) has dealt with repeated occurrences of scandal and fraud. While corruption has been somewhat rampant within the organization for some time, now the certainty and magnitude of it is alarming. In spite of this the organization has still been very beneficial to certain parts of the world, namely Asia and Africa.

According to FIFA's financial statements, between 2011 and 2014, 72% of all revenue was directly invested into soccer development and FIFA sponsored events.

Source: http://www.fifa.com/mm/document/affederation/administration/02/56/80/39/fr2014weben_neutral.pdf

Of this, 20% was spent on development in individual countries, meaning programs designed to build stadiums and promote growth through soccer mostly in less developed regions. This includes training for referees, classes to teach people how to build revenue and develop impoverished areas, how to manage teams, and the like.

Looking at the benefits FIFA can produce, when run correctly, there is promise for the organization. The problems started with FIFA's vague accounting procedures, which are commonly criticized as unusual and opaque. This includes incidents such as 1998, a year before the company KPMG became the main auditor, when FIFA destroyed financial documents. (http://www.nytimes.com/2015/06/06/sports/soccer/as-fifa-scandal-grows-focus-turns-to-its-auditors.html?_r=0) These sorts of instances have gone back as far as two decades. Due to the clear evidence of the corruption, however, FIFA has had issues retaining and finding new sponsors for their bigger events (http://www.bbc.com/news/business-33649448). Some of the largest sponsors, such as VISA and Coca Cola, claimed they hold little belief in FIFA's ability to reform under their current administration and called for a third party to effect changes.

Instances where failures by auditors and poor accounting standards have caused great companies to go under are not hard to find, such as Enron. So this is a make-or-break moment for FIFA, though much of this could be fixed through a stronger executive board and tighter regulations through accounting. If FIFA does not comply with their sponsors' requests they could face some big monetary setbacks. Top sponsors for FIFA give around $25-50 million a year with the mid and lower tier sponsors giving around $10-25 million. (http://www.forbes.com/sites/chrissmith/2014/06/12/the-biggest-sponsors-of-brazils-2014-world-cup/) Marketing rights make up the second largest source of income according to FIFA's financial statements, totaling up to $1,629 million between 2011-2014. If FIFA fails up meet sponsors' standards and loses this income is could cause huge issues for the organization, especially with their difficulty in finding new sponsors to replace those lost. These problems could be fixed though it will require swift action in their accounting practices as well as their executive board.

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Problem With Obamacare Is That It Did Little To Reduce Overall Healthcare Spending
Joan Robinson’s Critique of Marginal Utility Theory
News Blog
Early Headlines: Russia Hacked GOP, Trump To Drain Energy 'Swamp'?, New Sec'y Of State Candidate, India IP Shrinks, India Has World's New Largest Solar Plant , China GDP Hides Volatility And More
Most Coup Attempts In Recent Years Have Failed
The Global Cost Of Diabetes
The Universities Churning Out The Most Billionaires
Five Amazing Ways Plants Have Created New Technologies
Where U.S. Weekly Wages Go The Furthest
What We Read Today 09 December 2016
How To Stop Using Filler Words Like Um And Uh
02 December 2016: ECRI's WLI Growth Index Improvement Continues
Preliminary December 2016 Michigan Consumer Sentiment Highest Since Early 2015
October 2016 Wholesale Sales Improved
Rail Week Ending 03 December 2016: Finally A Positive Month
November 2016 CBO Monthly Budget Review: Total Receipts Up by 1 Percent in the First Two Months of Fiscal Year 2017
Investing Blog
The New Art Of Utility Investing
Investing,com Weekly Wrap-up 09 December 2016
Opinion Blog
Trickle-down Economics, Trump Edition
Looking At Everything: Trump's $1 Trillion Infrastructure Plan
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
09Dec2016 Market Close: Wall Street Closes On A New High, Trump Sugar High, Crude Prices Testing Resistance, US Dollar Melts Higher
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved