FIFA Looks to Double Down on Its World Cup Profit Machine: Data Viz

The exact infrastructure cost of the 2022 FIFA World Cup in Qatar has eluded public knowledge; outlets have reported numbers ranging from $10 billion to $300 billion, depending on whether certain national construction projects such as roads and airports are included.

What is known is that FIFA won’t pay for any of it. That responsibility (in Qatar’s case, building at least seven new stadiums) always falls on the host nation. Brazil and Russia spent more than $10 billion apiece on preparations for the 2014 and 2018 events, respectively.

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The international football governing body does incur other costs related to the tournament. It pays for a local organizing committee to manage the event and covers the prize money given to the participating countries, as well as their travel and accommodations.

Those expenses pale in comparison to the money FIFA takes in, however. The 2014 World Cup generated $4.8 billion in revenue for the organization compared to $2.2 billion in expenses, for a $2.6 billion profit. The 2018 World Cup was an even bigger financial success: $5.36 billion in revenue versus $1.82 billion in expenses. The 2022 event is projected to earn a similar profit in the range of $3 billion.

2018 FIFA World Cup Revenue
2018 FIFA World Cup Revenue

Those numbers make it easy to understand why FIFA is pushing for a biennial World Cup. It invited its members to an online summit on Sept. 30 to discuss the proposal, which the Union of European Football Associations (UEFA) and the European Club Association (ECA) have officially criticized, as well as Europe’s top women’s soccer leagues. Fans in countries with the most talented local leagues have also raised concerns about a disruption to the soccer calendar.

UEFA brings in revenue from Champions League, Euros and other club competitions, all of which could be affected by more frequent World Cups. On the flip side, FIFA is dependent on one event for its revenue. According to financial statements, 83% of its revenue during the four-year cycle from 2015 to 2018 was attributed directly to the 2018 FIFA World Cup.

Nearly half of that full-cycle revenue came from TV broadcasting rights deals, 95% of which were for the 2018 World Cup, although that could be an overestimate given that several deals include both the men’s and women’s tournaments. In 2011, for instance, FOX bid $400 million and beat ESPN for the rights to broadcast both the 2018 and 2022 World Cups, along with the 2015 and 2019 women’s events.

FOX accounted for just a fraction of the 2018 World Cup’s global TV revenue, though. The combination of Asia and North Africa delivered $974 million in media rights income, exceeding Europe ($920 million) for the first time, according to FIFA. The organization’s TV contracts are set through the 2026 World Cup.

Marketing was the second biggest revenue category over the 2015-2018 cycle, totaling $1.66 billion. It’s “hard to know” how much this category would grow in the scenario of a biennial World Cup, according to Holy Cross professor of economics Victor Matheson.

Ticketing and hospitality packages from the 2018 tournament combined to bring in $689 million, in line with the $711 million from 2014. This revenue stream could be expected to double by doubling the frequency of the World Cup. “Having one of these events every decade or 15 years in a continent, it’s hard to believe that’s a huge decline in ticket sales as opposed to one every 30 years,” Matheson said. “That's still a long time to get some pent-up demand.”

Twice the number of matches does not mean twice the value of the TV rights, however. World Cup fatigue or competition with other events, such as the Olympics, could eat into the cost of deals with broadcasters. “It’s harder to get people invested in something every two years than every four years,” Matheson said. “My guess is we’d see a fall in ratings.”

Still, reliable ticketing revenue puts FIFA in a good spot. A beefed-up rights package, including an additional World Cup every four years, would only need to sell for about 50% more than the current price to guarantee a profitable tournament for FIFA, and that’s before accounting for any additional income from sponsors.

But as Michael Scott learned in an episode of The Office, when you have a surplus, you have to spend it. FIFA’s expenses shed light on what the nonprofit would do with the hypothetical extra money it would earn from a biennial World Cup.

Since 2016, FIFA has significantly increased its investment in the area of “development and education.” This category accounted for only 20% of expenses during the 2011-2014 cycle, but jumped to 31% during the following cycle with the introduction of the FIFA Forward program. In its own words, FIFA “shares the success of the FIFA World Cup with its 211 member associations, as well as with the six confederations and the zonal/regional associations” and claims that it “helps every football-loving girl and boy, woman and man in the world play football in the best possible conditions” through the initiative.

FIFA Expenses
FIFA Expenses

Based on 2020 figures, each country is entitled to receive up to $1 million per year to fund general operational costs, as well as up to $2 million during the entire 2019-2022 cycle for special projects, which FIFA approves via an application process. Member associations with lower revenues may also receive up to an additional $400,000 per year for travel and equipment. Lastly, each of the six confederations is given $12 million per year.

Even after a pandemic year in which FIFA ran a deficit of $778 million, the nonprofit is still financially healthy, with $1.88 billion in reserves, down from the $2.58 billion it had at the end of the previous fiscal year. One World Cup every four years is more than enough to make up for the organization’s operating at a loss in the other three.

FIFA itself doesn’t need more money, but it argues that more frequent World Cups will raise funds that can then be distributed to the 211 member nations, more than half of which have never been to a World Cup. In addition to having a better shot at the big show, those countries would gain revenue from more frequent qualifying tournaments and any additional cash that FIFA could send their way.

Some revenues may be diverted elsewhere, though. For a biennial World Cup to be feasible, the clubs that sign the paychecks of the world’s top players may require more compensation to let their athletes risk injury playing for national teams. USMNT star Christian Pulisic has missed the past month of matches for Chelsea due to an injury sustained during a U.S. World Cup Qualifying contest versus Honduras.

“[FIFA is] fairly good at promoting grassroots soccer by making sure that some of the money from these World Cups trickles down,” Matheson said. “But my guess is that if you generate more money from more World Cups, that the vast majority of that additional revenue won’t go to Saint Kitts and Nevis.... It’s going to go to the owners of big clubs that are being asked to release players more often.”

Along with European clubs, potential host nations may also find themselves disadvantaged by the proposed change. “If you have a more frequent World Cup, it is likely that you have significantly less international tourism,” Matheson said. “If I’m an American fan, I might be able to save up enough money to go to Brazil or Paris if it’s every four years, but I won’t be able to go every two years.” Those fans would be replaced by domestic tourists, who generate far less economic impact.

Furthermore, prominent figures in women’s soccer have opposed more frequent World Cups, citing potential calendar upheaval and diminished visibility for women’s international competitions. In effect, women’s soccer already has a major tournament every two years because the Olympics features the world’s top players, which is not the case for the men.

That said, women’s teams could stand to gain financially if FIFA addresses the prize money disparity between the men’s and women’s World Cups, for which it's been repeatedly criticized.