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World Cup 2014 to rake in US$4.28b for Fifa: Sportcal
THIS year's World Cup in Brazil - despite being beset with a host of domestic problems ranging from street protests to delays and deaths in the construction work leading up to the tournament - is set to be a financial juggernaut for Fifa, the international governing body for football.
Sports market intelligence company, Sportcal, estimates that the 2014 World Cup will bring in commercial revenue of US$4.28 billion; that's up from the US$3.66 billion earned in the 2010 competition in South Africa and the US$2.35 billion in the 2006 event in Germany.
Sportcal's estimate is also well above the US$3.8 billion that Fifa had budgeted from television and marketing rights for the full cycle of the competition from 2011 to 2014.
Fifa's secretary general, Jerome Valcke, said last year that 60 to 65 per cent of the revenue for the present cycle - a large majority of which relates to the tournament in Brazil - would derive from broadcast rights, and 35 to 40 per cent from marketing.
Fifa's event-related revenue from 2011 to 2013 totalled US$3.23 billion, of which television broadcasting rights accounted for US$1.74 billion and all other income US$1.49 billion, with one year of the cycle to run. This compares with the overall revenue of US$3.89 billion for the previous full cycle from 2007 to 2010.
"The numbers show the continuing desire of broadcasters and sponsors to be associated with soccer's biggest festival, which in an increasingly fragmented media landscape, has the almost unique power to unite a nation in front of the television and attract mass audiences across the globe," said Sportcal deputy editors Simon Ward and Martin Ross, in their article for the latest issue of the magazine Sportcal Insight.
And in what is probably of no surprise to Singaporeans, the writers added that "broadcast rights sales will once again represent the largest share of turnover for Fifa from its showpiece tournament, as was the case four years ago".
"As one of the sport's few mass audience events, the World Cup continues to offer broadcasters not only millions of eyeballs and advertising dollars, but also prestige and, for the likes of pay-television operators BelN Sports in the Middle East and North Africa, and SingTel in Singapore, valuable subscription revenues," they said.
They noted that Fifa has enjoyed considerable success selling media rights for the 2014 World Cup, largely through concluding deals in-house with broadcasters, but also via lucrative agreements with agencies in Asia and tie-ups with broadcasting unions in Europe, Latin America and sub-Saharan Africa.
The Sportcal writers said that, based on Mr Valcke's estimates 12 months ago, media rights were set to account for between US$2.4 billion and US$2.6 billion of revenues for World Cup 2014, though additional deals have been signed since. Fifa has also inked valuable media rights deals for future tournaments in important territories.
Ticket sales are also soaring. Ahead of the final ticket sales phase, 2.6 million had already been allocated. Fifa has also revamped its sponsorship structure for the 2018 and 2022 tournaments, with the six "national supporters" to be replaced by up to 20 "regional supporters" from different territories - which Fifa expects will lift its income by as much as 30 per cent.
But what of Brazil itself, which has invested some US$11 billion - US$4 billion for new and renovated stadia and US$7 billion for related infrastructure - into hosting the World Cup?
Doubts remain over how much the country can recoup. Recent surveys of the population have shown that many believe the tournament will do more harm than good to Brazil.
Fifa, for its part, has denied that it is taking money away from Brazil in staging the tournament there.
"Fifa is not asking for any financial support from the Brazilian authorities and whatever is spent by the cities and by the government will remain within the country," Mr Valcke said. "It is in the infrastructure (and other) things which will be used by the country and will not be taken away by Fifa when we fly away from Brazil on the 14th of July, after the final."