FIFA has set ambitious targets for the World Cup Finals next year. However, elimination of two giants Italy and the USA has dealt a severe blow to the ambitious revenue plans.
The world governing body of football is trying the best to put a brave face in response to questions about the revenue targets for the 2018 World Cup in Russia. FIFA’s top salesman and its commercial director Philippe Le Floc’h has bravely announced that revenue targets of INR 36,700 crore for the cycle of 2015-2018 will be achieved. Though the reality completely contradicts his declaration.
The harsh reality remains that the FIFA commercial team is struggling to make up for the damage caused by the elimination of Italy and US. Both the teams have shockingly failed to qualify for the football world’s biggest showpiece event. This is resulting in a big headache for the commercial honchos of FIFA.
Italy’s loss in the playoffs wiped tens of millions of dollars off the value of an unsold broadcasting deal. One of FIFA’s most valuable markets is typically worth $200 million per World Cup.
The surprise U.S. elimination — as Panama qualified — affects finding four North American sponsors in a new, and stalled regional sales program. Just one of the 20 slots has sold worldwide, to an oligarch-owned bank in host nation Russia.
“Everybody is annoyed with the non-qualification of the U.S. which was not expected, to be honest,” said Le Floc’h, who has targeted deals with American tech firms.
FIFA is targeting $3 billion, i.e approximately INR 19,500 Crores from Media rights sales for the 2015-18 cycle, but in the wake of unforeseen eliminations at the qualifying stage, these numbers look highly unrealistic. On Sponsorship front too FIFA has still some important slots vacant. Sponsors sales were projected to drop by $100 million even before the U.S. team’s early exit. Still, the French-Swiss official insists FIFA will reach a $5.66 billion income target for the 2015-18 sales period even with gaps in the lineup of 34 potential sponsors.
“Obviously the more positions we fill the better. On the other hand, we are not going to go cheap,” Le Floc’h has told The Associated Press on Thursday in his first media interview since joining FIFA 14 months ago.
“The job we have to do is to make sure that our financial projections, our budget numbers, are delivered. And they should be delivered,” he said.
Le Floc’h inherited a sales plan that was unproven even before FIFA, and its already battered image was rocked in May 2015 when American and Swiss federal prosecutors unsealed sweeping investigations of corruption.
In the fallout, FIFA’s then-heads of marketing and broadcast sales left though neither was publicly implicated.
The backdrop to 2018 World Cup sales — typically in two-tournament deals with the 2022 edition — has included uncertainty over FIFA’s exposure to prosecution, falling oil prices, sanctions imposed on Russian businessmen, and issues with the next host in line, Qatar.
“It is complicated, especially in a market where (potential partners) see some crisis around,” Le Floc’h acknowledged.
The World Cup is the most-watched sports event. More than 1 billion viewers have seen 2014 final, and a global average audience approached 600 million.
Europe is no longer a prime FIFA target, with the American west coast, Asia and Middle East home to more desirable tech-savvy sponsors. More trade with China is also on the cards with Wanda Group, and consumer electronics firms Hisense and Vivo joining the 2018 World Cup sponsors list.
“They are leaders in their country, they have ambitions to tackle the world,” Le Floc’h said. “And football is the best vector of communications.”