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Believe It or Not! FIFA is a Charity

With the FIFA World Cup 2014 in Brazil, little over a week away, FIFA seems to have reached calmer waters after a series of corruption allegations over the last two years.

jim_pearson

All be it that there is much consternation that the World Cup will be as successful as hoped given the political, social and construction difficulties that are in the news almost daily.

In addition, whilst Sepp Blatter is in his fourth and final term as FIFA president there continues to be an undercurrent of bribery and corruption allegations notwithstanding that the 2012 FIFA Congress in Budapest presented a new set of statutes aimed at making FIFA more transparent.

Many feel that even with the cosmetic changes that FIFA have sought to make over recent years, there is a need for a more robust independent investigative organization and ethics committee, while drawing up a comprehensive plan for rooting out corrupt practices at FIFA.

Also in dire need of reform is the manner in which World Cup hosts are selected. With such huge sums of money and international political ramifications at stake, such important decisions can no longer be made wholly in private by a tiny group of unaccountable individuals.

FIFA’s development and evolution has mirrored that of the wider soccer world. In its growth from amateur passion to professional excess, and transformation from small, voluntary agency into a huge, global giant.

A few years ago, the BBC highlighted six surprising facts about this secretive overlord of world soccer:

  1. It is a registered charity. FIFA pays very little tax in its home country of Switzerland. It also requires tax exemption in countries wishing to host a World Cup competition. “Any host country requires a comprehensive tax exemption to be given to FIFA and further parties involved in the hosting and staging of an event,” a spokesman told the BBC last year. The 2010 tournament – the most expensive yet – cost South Africa 33bn rand (£3bn; $4.86bn). Yet, a “tax-free bubble” was established around the event at FIFA’s request, relieving FIFA, its subsidiaries, and foreign soccer associations of any obligation to pay income tax, customs duties or VAT.
  1. This charitable status dates from its early days as a tiny voluntary organisation run on goodwill from a suburban villa in Zurich.
  1. Broadcast rights to the first televised World Cup – the 1954 tournament hosted by Switzerland and won by West Germany – were given away for nothing. With a global TV audience numbering many millions, FIFA realised this was a goldmine. By 1986, TV rights sold for 49m Swiss francs (£35m) – a fraction of the $2.4bn in broadcast earnings for the period of the last World Cup.
  1. FIFA set the template for modern sports sponsorship after an awkward scramble to secure advertising rights for its new partner, Coca-Cola, at the 1978 World Cup in Argentina. A military coup two years earlier threw up a dilemma for the organisers. With no control over the stadia, and no advertising agreements in place, how could FIFA ensure the soft drinks giant had a presence in such a strictly controlled country? It came down to money. FIFA asked Coca-Cola to advance it an extra 12m to 15m Swiss francs to buy these rights from Argentina, so it could then offer the company an exclusive relationship at its own event.
  1. Globalisation of the game came under Joao Havelange, FIFA seventh president and Sepp Blatter’s predecessor. Spain expected to host 16 nations when it bid for the 1982 tournament; FIFA decided later this would be rounded up to 24, as Mr Havelange made good on his election promises to bolster training and opportunities for teams from Asia and Africa. To subsidise this, FIFA again went cap-in-hand to Coca-Cola for an extra $40m in sponsorship. The only way to make this worthwhile was to guarantee its sponsors wide-ranging benefits from exclusive signage, licensing and merchandising. As a consequence, the package of exclusivity and global coverage that defines modern sports sponsorship was born.
  1. FIFA has more member countries than the United Nations – 208 to the UN’s 192. Only eight internationally recognized countries are not FIFA affiliates, including Vatican City, Kiribati and Monaco. How different then from its origins in 1904, when the representatives of seven European football associations banded together with the aim of improving soccer’s international reach.

 

Jim Pearson – Sports Consultant

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