FIFA has reportedly earmarked $440million for 2022 World Cup prize money for national teams, with the winner expected to go home with $44million.
How does FIFA raise money to finance and doll out prizes for national teams in the World Cup?
Just like any other business, FIFA follow strict business principles in raising money to finance the World Cup and also doll out prices to participating national teams.
It has been revealed that FIFA has earmarked $440million as cash prizes for teams, with the winner of the tournament is expected to go home with $44million out of the prize money.
FIFA uses basic business processes and principles to raise the money and there are various means they use to achieve this. Some of which will be explored in this article.
Meanwhile, FIFA made $4.6billion in revenue from the 2018 World Cup in Russia. They also pay World Cup host countries’ organizing committees, prize money, travel and accommodation for teams and support staff, plus a legacy fund to help develop the sport in the host country after the World Cup circus has left town.
FIFA organizes its accounts in four-year cycles around each World Cup. For the most recently published 2015-18 cycle, FIFA brought in $6.4bn. In 2021, a single non-World Cup year, FIFA took in $766m.
World Cup prize money: Below are ways FIFA Generates its World Cup revenue:
TV rights
Most of FIFA’s income comes from selling TV broadcast rights for the World Cup and other international tournaments.
Of the $6.4bn generated in the last cycle, $4.6bn came from TV rights.
Marketing rights
There are some top brands that partner with FIFA as sponsors. FIFA’s sponsorship deals form a huge part of the body’s total World Cup revenues.
These global partners and sponsors advertise their products during World Cup campaigns as part of the deal and pays FIFA for the advertisement in agreed terms and conditions.
The brands have an advantage during advertisements, with the World Cup being the second most watched global event, with over five billion viewers expected to tune in to this year’s tournament.
In the pre-2018 tournament cycle, marketing rights deals landed FIFA $1.66bn. And even in 2021, revenue from the sale of marketing rights amounted to a heathy $131m.
Ticket sales and hospitality
Another money-spinner for FIFA is gate revenue. The entire income from ticketing rights goes to a subsidiary company wholly owned by FIFA. In the 2015-18 cycle, this brought in $712m.
In 2021, ticket sales for the Arab Cup, when about 600,000 people attended, generated an estimated $12m. About three million tickets have been sold for Qatar 2022. And with prices ranging from $100-$1,100, it is sure to be another bumper year.
Branding and licensing
FIFA also draws in cash through the licensing of its brand. The best known of these is Electronic Arts’ series of FIFA football games, which reportedly generated sales of $20bn for EA over its 20-year partnership with FIFA.
The games manufacturer is understood to have paid FIFA in the region of $150m annually for the right to use the FIFA name.
In 2021, FIFA made $180m from licensing its brand for merchandise, retail and gaming. The same year, FIFA received a $201m award from the US Department of Justice as compensation for losses after a failed corruption case after dozens of top FIFA executives were indicted in 2015.
