David Owen

FIFA’s Finance Committee chair Alejandro Domínguez assures us that the world football body is "well on track" to exceed its revenue target of $6.44 billion (£4.9 billion/€5.87 billion) for the 2018-2022 World Cup cycle.

And with 95 per cent of this sum contracted and Qatar 2022 having apparently dribbled around the worst of the pandemic, I can see little reason to doubt him - even if the tournament’s timing, at the very end of said four-year cycle, will keep management on tenterhooks deep into stoppage time.

Viewed in this context, an analysis of how FIFA was able to exceed its 2021 revenue budget of $742 million (£566 million/€677 million) is not of capital importance.

Nevertheless, the small mystery I think I have uncovered in attempting to analyse this is of more than passing interest – especially if it turns out to be linked to the organisation’s booming licensing/video games business

At first glance, FIFA’s achievement of generating not $742 million, but $766.5 million (£585 million/€699 million) of revenue last year might be thought worthy of a small pat on the back prior to moving on.

However, if you probe into it more deeply, the whole thing begins to look much more intriguing.

Take broadcasting revenue, the body’s biggest earner. That was supposed to come in at $365 million (£278.5 million/€333 million) according to a revised budget published in June 2020.

FIFA held its latest Congress in Doha last week ©Getty Images
FIFA held its latest Congress in Doha last week ©Getty Images

So how did it make out? $400 million maybe? Or $380 million perhaps?

Oops: $123.1 million (£94 million/€112.3 million). What on earth went wrong?

Ah well, marketing revenue, ie sponsorship, must have overperformed, after all it has been going gangbusters for the International Olympic Committee (IOC).

Wrong. It was budgeted at $174 million (£132.8 million/€158.7 million), but actually came in at $131.4 million (£100.3 million/€119.8 million).

This is not really all that surprising: FIFA’s sponsorship income has been essentially flat-lining for a while, with the current leadership seemingly powerless to reignite this aspect of FIFA’s business in the wake of the tumultuous and reputation-shredding end of the Sepp Blatter era.

Marketing generated $1.66 billion (£1.27 billion/€1.51 billion) of revenue in 2015-2018, the last completed World Cup cycle, barely changed from the $1.63 billion (£1.24 billion/€1.49 billion) earned in 2011-2014.

Even if it hits budget for 2019-2022, that would see it edge up only to $1.77 billion (£1.35 billion/€1.61 billion), which would scarcely constitute an explosive advance.

Okay, so that accounts for what are usually FIFA’s two biggest revenue sources, and we find ourselves not above budget, but nearly $285 million (£217.5 million/€260 million) below it. What is going on here?

Our old friend licensing reduces the arrears slightly. It brought in $180.2 million (£137.5 million/€164.3 million) in 2021, rather than the $145 million (£110.6 million/€132.2 million) budgeted.

But that still leaves us almost $250 million (£190.75 million/€228 million) behind the curve, and only the catch-all "other revenue" to make good the deficit.

Well, the old boy did what he could, generating $85.6 million (£65.3 million/€78 million) rather than the $58 million (£44.25 million/€52.9 million) budgeted, thanks to a range of items, including FIFA’s contribution to Tokyo 2020.

FIFA is "well on track" to exceed its revenue target of $6.44 billion for the 2018-2022 World Cup cycle, says Finance Committee chair Alejandro Domínguez ©Getty Images

However, it turns out that the real secret behind FIFA’s ability to report higher revenue than expected is a whole new category not even included in that June 2020 budget: step out into the limelight the very lovely "other income".

The hitherto neglected "other income" it turns out was FIFA’s biggest single revenue category of all in 2021, weighing in at a meaty $234 million (£178.5 million/€213.4 million), up from less than $2.5 million (£1.91 million/€2.28 million) a year earlier.

And what did this consist of? Well, rather oddly, when you turn to the relevant Notes in the financial statements, you find that, whereas other revenue sources are itemised with commendable transparency, Note 6 "other income" includes no itemisation at all.

What we are told is: "Other operating income includes host country contributions for the event operational costs of hosting and staging the FIFA Arab Cup 2021, the remission proceeds awarded to FIFA by the United States Department of Justice as well as other sources of income, such as rent income, termination fees relating to contract cancellations, and a gain on sale of property and equipment."

Happily, there are a few other nuggets around and about for those of us prepared to chisel them out.

Another Note tells us that hosts Qatar chipped in the little matter of $77.5 million (£59.1 million/€70.7 million) towards the cost of the Arab Cup.

There were also $12.2 million (£9.3 million/€11.1 million) of Arab Cup-related ticket sales, but this was included under a different heading.

That leaves $156.5 million (£119.4 million/€142.7 million) of "other income" still to account for.

The remission proceeds referred to above totalled $60.4 million (£46 million/€55 million) as far as FIFA is concerned.

I suppose if you were being picky you might argue that this is money actually earned in a previous financial cycle that has now been passed along to its rightful owner.

Be that as it may, that now leaves $96.1 million (£73.3 million/€87.6 million) of "other income" still to itemise.

And this is where things get very hazy.

The mysterious
The mysterious "other income" accounts for $234 million of FIFA revenue in 2021 ©Getty Images

The accounts appear to indicate that FIFA disposed of $15.6 million (£11.9 million/€14.2 million) of operational buildings, assets under construction and land in 2021.

I think $15.6 million would equate to the offloaded assets' book value, rather than the gain arising on their sale. Nonetheless, it would seem a little odd if a sale of property valued in the books at $15.6 million yielded a gain of anywhere near $96.1 million.

So I think that probably still leaves several tens of millions of dollars of revenue to be explained, and only "rent income" and "termination fees relating to contract cancellations" among the stipulated sources left unaccounted for.

I do not remember rental income being especially significant for FIFA in previous years, which leaves me wondering - and this is the mystery - whether the football body has received a really substantial termination fee, conceivably measured in the tens of millions of dollars, for cancellation of a contract or contracts.

What deal could possibly have been big enough to account for that scale of payment?

Two thoughts: I suppose it could be linked to the $200 million-plus (£152.2 million/€182.1 million) undershoot in broadcast revenue.

Alternatively, might it conceivably be EA Sports-related? It emerged last autumn that the business behind the FIFA video games was "reviewing" its naming rights agreement with FIFA, thought to expire at the end of this year. 

These suggestions might be miles wide of the mark, but if the termination fee really is in the tens of millions of dollars, the implication would be that the terminated contract is itself, well, big.

In the meantime, dare I suggest it would have been preferable if FIFA had broken down the $234 million itself so that outsiders like me did not have to try and do so.