VANTAGE POINT -- The astonishing net worth of soccer
By SHEILA NORMAN-CULP - The Associated Press
Keystone
FIFA president Joseph Blatter, the man atop soccer's money machine. ZURICH, Switzerland --FIFA president Sepp Blatter paused, looked at the cameras and shrugged.
"I don't want to talk about money," he joked - this at a press conference on the subject of FIFA's booming finances for the last four years.
The fact is, money makes the soccer world go 'round. And the sport's governing body is rolling in dough, a sharp turnaround from 2001, when ISL/ISMM, FIFA's marketing partner for almost two decades, went bankrupt, plunging FIFA into a financial crisis.
In January 2003, FIFA had a loss of $10.9 million. At the end of December 2006, it reported a $617 million surplus.
FIFA defends its soccer monopoly with gusto. In the last nine months alone, FIFA has criticized officials or governments in Albania, Greece, Iran, Kenya, Macedonia and Poland for "interfering" in soccer issues.
And it wields a huge stick. FIFA can't impose economic sanctions on governments like the United Nations does, but it can suspend national soccer teams from playing international matches.
In many parts of the world, life revolves around the price of corn, the price of bread and the score of the latest soccer game. It does not take a political genius to understand that governments will fall if their soccer teams are made into pariahs.
Business students, take note: This is what a successful, independent monopoly can achieve. It's not often these days that you get to see a live one in action.
Let's pull back the curtain and see how FIFA spins soccer dreams into gold.
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AND WHAT ABOUT THOSE WORLD CUP TICKETS?
At the news conference March 23, Blatter denounced one reporter's question as a "veiled accusation" and declared that neither he nor any FIFA employee had ever accepted a bribe.
He did acknowledge, however, that the vast sums of money involved in international soccer have likely led to some of the sport's ethical problems.
"In French we say, 'Money makes people go mad.' There is some truth to that," Blatter said.
But the FIFA president was referring to corrupt referees, greedy club owners and dishonest players, not anyone connected with FIFA.
Still, there is that Jack Warner-World Cup-tickets thingy.
No scandal, says FIFA, even though thousands of World Cup tickets were sold at inflated prices through a travel agency owned by the family of Warner, the CONCACAF chief and a longtime FIFA vice president.
FIFA's disciplinary committee "expressed disapproval" of Warner's conduct and suggested he "exercise the requisite level of care in ticketing matters in the future."
Good idea.
FIFA also asked Warner's son Daryan to pay back almost $1 million, but said it was unable to sanction him because he was employed outside the FIFA family. But why would they want any money back if everything was on the up and up? One million - or more - could go a long way in, say, Trinidad and Tobago.
Warner is a very powerful figure in soccer, a good person to have on your side.
Blatter, meanwhile, will remain president of FIFA for another four years, the soccer body announced last week.
No one chose to run against him.
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AND GOOD SALARIES FOR ALL
The good news is that rising FIFA coffers mean more money for developmental programs - and no one can argue with the benefits of putting a new soccer field in Africa. FIFA plans to increase its developmental funding from $457 million over the last four years to $690 million over the next four.
But those development expenses only took up 23 percent of the money FIFA earned from 2003-2006. Operating expenses ate up 31 percent - including $235 million for personnel expenses and travel alone.
In 2006, FIFA paid $48.3 million in salary and benefits to its 265 employees. And though FIFA claims financial transparency, more than $8.3 million of that was simply labeled "other."
Try to confirm reports that Blatter makes over $1 million a year and FIFA employees will look at you with a wan smile and note that, according to the highest European accounting standards, they are not required to list individual salaries.
FIFA is so wealthy that its new glass-and-stone headquarters building in Zurich, which cost $200 million to build and opened last year, has been fully paid for. No mortgage for the king of soccer.
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IT'S MY PARTY
All this is possible, of course, because the World Cup is FIFA's golden goose.
Over 92 percent of FIFA's total revenue comes from the sale of rights relating to the World Cup - for broadcasting, marketing, hospitality and licensing. Total revenue from that was over $2.4 billion for 2003-06.
Last year's tournament in Germany was a resounding financial success. The month-long event garnered a cumulative 26.3 billion viewers and produced a $207 million profit for its organizers, of which FIFA received $60 million.
Making FIFA's grip on soccer even more ironclad, a recent court case in Switzerland upheld FIFA's right to impose sanctions and fines on its members.
That development made Blatter laugh at the news conference. Clubs that disagree with FIFA or its rulings don't have to be members, he noted. They can "go play somewhere else."
Yeah, right. For now, it's his party and you'll play if he wants you.
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asap contributor Sheila Norman-Culp is on leave from her job as an AP supervisory editor.
