FIFA reports $631M profit during last 4 years

Published Mar. 3, 2011 4:46 p.m. ET

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FIFA made a $631 million profit in the four years leading up to the 2010 World Cup in South Africa, registering $202 million of that in last year alone.

The four-year financial cycle showed income of $4.19 billion from broadcast and commercial deals, with 87 percent tied directly to its marquee event, FIFA reported Thursday.

''The World Cup in South Africa was a huge, huge financial success, for Africa, for South Africa and for FIFA,'' FIFA President Sepp Blatter said, describing himself as ''the happiest man today'' in announcing the results.

Revenue for soccer's governing body rose 59 percent compared to the four years before the 2006 World Cup in Germany, although that tournament generated a bigger profit of $663 million.

The income easily covered rapidly rising spending of $3.56 billion on administrative costs and development projects from 2007-2010.

FIFA's $202 million profit in 2010 was keyed by broadcast deals that outstripped expectations. Total European TV sales for the World Cup were $1.29 billion, and North America contributed $211 million.

The 2010 World Cup helped raise FIFA's reserves to $1.28 billion and 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 soccer 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 nonprofit that invests its money in soccer development.

Swiss-based FIFA subsidiaries, including operations to monitor betting and player transfers, had $893,000 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, for an average of $168,700. Two years ago, FIFA paid $42.4 million in wages to 315 staff, for 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 $4.4 million was added to a fund that pays pensions to retired executive committee members and it now stands at $16.8 million. Only members who serve at least eight years on the panel are eligible for payments.