FIFA put business 1st in 2018-2022 World Cup race

FIFA put business 1st in 2018-2022 World Cup race

Published Nov. 26, 2010 8:33 a.m. ET

FIFA's decision to combine the 2018 and 2022 World Cup hosting rights into one process was a largely commercial call it has come to regret.

The 24-man executive committee - now reduced to 22 after Amos Adamu and Reynald Temarii were suspended following a corruption investigation - took the decision in late 2008 at the height of the global financial crisis.

The move was intended to give FIFA clarity and stability in negotiations with broadcasters and sponsors. Instead, details of vote-trading emerged despite specially drafted rules intended to stop unethical behavior.

While recent allegations of bribery and collusion will likely have little impact on FIFA's earnings from its ''privileged'' cash-cow competition in seven and 11 years, its reputation has taken a hit.


''I am not convinced now that it was the right decision,'' FIFA President Sepp Blatter said after an Oct. 29 meeting of the executive body.

Blatter added that, as chairman of the ruling panel, he took some responsibility for choosing a strategy that later threatened to derail Thursday's secret ballots.

FIFA's top administrator acknowledged that he also backed the double-header option.

''I pushed for this idea,'' secretary general Jerome Valcke told The Associated Press in a recent interview. ''It is true when people are saying it was mainly a commercial point to say we should have the two together. We sold '10 and '14 (together), so we will sell '18 and '22.''

FIFA defied many doubters to organize a commercially successful tournament in South Africa, which earned football's governing body at least 95 percent of its income in the 2007-10 World Cup cycle. The final figure will be close to $3.5 billion (?2.6 billion), not taxed in South Africa or Switzerland.

FIFA has budgeted to earn $3.8 billion - $2.2 billion from broadcasting rights; $1.6 billion from sponsors, hospitality and licensing deals - before the 2014 World Cup is played in Brazil.

Valcke cited FIFA's ''amazing'' support from six top-tier sponsors to predict greater revenues from the World Cups being awarded.

''They are coming to us asking for extensions now for '18 and '22 - even with higher fees,'' Valcke said. ''They are saying, 'We want it and we are ready to pay for it.'''

Five sponsors - Adidas, Emirates airline, Hyundai-Kia, Sony and Visa - began negotiations soon after play ended in South Africa. On Wednesday, FIFA announced that Korean carmaker Hyundai had signed through 2022.

Valcke said none had asked for discounts depending on where the FIFA executive body takes the World Cup - even when 2022 bidders range from the United States with a domestic market of 300 million people to Qatar's 1.3 million population. The other 2022 bidders are Australia, Japan and South Korea. The 2018 all-European contest involves England, Russia and the joint bids of Belgium-Netherlands and Spain-Portugal.

''Their argument is ... 'You have succeeded with the organization of a World Cup in South Africa and so we trust you. Wherever you will go, we will know that a World Cup will be organized and it will work.' Which is a nice recognition,'' Valcke said.

FIFA's sixth main backer, Coca-Cola, likely will be rewarded for signing up through 2022 five years ago at an undisclosed but apparently below-market rate as football's commercial appeal has survived a recession.

''That was where Coca-Cola was clever,'' Valcke said. ''I am sure they have saved quite a lot of money. We can see now that people are really pushing for entering this world of football.''

FIFA, which is based in Zurich, benefits from legal status in Switzerland as a nonprofit association, which also allows deals to be struck without answering to shareholders.

''We are not a private company, we are not listed, so we don't need to maximize,'' Valcke said. ''We have to optimize what we have, but not maximize.

''The World Cup is very privileged.''