Coronavirus: Can the world’s most corrupt sports organization rescue the world’s most popular sport?
Last week, the United States Department of Justice came forward with a quite extraordinary accusation: Russia and Qatar had won the rights to host men’s World Cups in 2018 and 2022 via bribes. Slimy, indefensible bribes.
Millions of dollars, prosecutors said, had been wired to bank accounts of FIFA executives in exchange for votes. The charges, results of a years-long international investigation, were filed last month in court. They were released last Monday. And perhaps the most extraordinary aspect?
Nobody seemed to care.
Such is the extent of FIFA’s rot, that it was assumed major decisions were bought illicitly. More newsworthy would have been proof that one hadn’t been. Years of improprieties have framed soccer’s international governing body as perhaps the most corrupt organization in all of sports. Insiders point to recent initiatives as evidence of reform, but a distrusting public ignores them. FIFA’s image has been drawn in permanent marker. Only something unprecedented could change it.
And, well, here we are.
COVID-19 has upended life on earth. It will kickstart a global recession. Sports are anything but immune. In their idleness, teams and leagues stare at daunting financial challenges or even extinction. The pandemic will cost soccer’s global ecosystem billions of dollars.
No organization, however, is better positioned to provide relief than FIFA. It has billions of dollars to work with, and therefore an opportunity to both save soccer and save face. The challenge is getting those dollars into responsible hands – the exact thing that FIFA, for decades, has been infamously unable to do.
Why FIFA is comparatively unaffected by coronavirus
FIFA is not soccer. It helps govern the world’s most popular sport, but the two aren’t synonymous. And while leagues, clubs, players and soccer-adjacent employees of all kinds struggle – unable to play, to entertain, to make money – FIFA sits on $2.745 billion in reserves (as of 2019), trying to figure out how it can help.
Perhaps more importantly, its cash cow almost surely won’t be interrupted by the pandemic. FIFA has no direct stake in the Champions League or any national league. Over a four-year cycle, it makes more than 80 percent of its money from the men’s World Cup. It makes a significant chunk of the rest from the Women’s World Cup. The nearest of those two tournaments is 31 months away.
“FIFA’s financial position,” according to its latest annual statement, “is particularly strong and sustainable.” That’s because the 2018 World Cup brought in $5.36 billion. That whopping revenue number not only exceeded expectations, it gave FIFA a 2015-2018 profit of more than $1 billion, which blew away the $100 million budgeted projection. Reserves soared, from $930 million after 2017 to $2.75 billion a year later.
As long as the 2022 men’s World Cup, slated for November and December in Qatar, isn’t impacted by the coronavirus, FIFA will remain on solid ground. It could be hurt long-term by a worldwide economic downturn. But most of its broadcast contracts — its chief source of revenue — are locked in for years to come. Fox, for example, has agreed to pay hundreds of millions of dollars for U.S. English-language rights to every FIFA tournament through 2026.
Soccer’s governing body, therefore, will be fine. Its many members, on the other hand, need help.
Why the coronavirus endangers soccer
To say soccer needs saving is a bit hyperbolic. The Premier League isn’t going to die. For the Real Madrids and Bayern Munichs of the world, Champions League life will go on.
But the vast majority of leagues around the world don’t have billion-dollar TV contracts. Some don’t even have million-dollar TV contracts. A lot of clubs — from the Swedish Allsvenskan to the Liga MX Femenil, from the Iraqi Premier League to the Honduran Liga Nacional — make most of their money on matchdays, thanks to tickets and concession sales and the like. For the foreseeable future, they won’t have matchdays. Instead, they have grave problems.
They have players and staff to pay, and no incoming cash with which to pay them. Thousands of clubs sustain themselves on a month-to-month, week-to-week basis, turning revenue from ticket sales one week into paychecks the next. The cash flows will resume someday, but likely at lower rates in a struggling economy, and likely not soon enough to dissuade clubs from folding. It’ll be the fiscally correct option. And the clubs that fall under this ominous umbrella are bigger than you might think.
“We are all fighting to survive,” German Bundesliga CEO Christian Seifert told the New York Times earlier this month. Half of Germany’s second-division clubs, and even a few top-flight ones, he said, are “very much in danger to file for bankruptcy.”
So how much money does it take to save soccer? The simple answer is: far more than FIFA has. If the Bundesliga, Spain’s La Liga and the English Premier League were unable to finish their seasons, the estimated combined shortfall would exceed $3 billion — and exceed the amount FIFA has in reserve.
But elsewhere, salvation requires much less. Millions of dollars — not even tens of millions — can keep some lesser leagues upright. Less than 0.1 percent of FIFA’s reserves can rescue soccer in an entire third-world country.
It can. The difficulty is ensuring it does.
What FIFA must do
Amid the dire (and worsening) circumstances, FIFA began outlining plans for what president Gianni Infantino calls an “emergency relief fund.” But what, exactly, will that look like? Who gets how much money? Where, exactly, does that money go?
These are questions that plagued FIFA long before the pandemic hit. They’re the source of its reputation as the most unethical organization in sports. Its ruthless profit-seeking attracted suspicion. FIFA always fell back on the stance that its monetary thirst was for the good of the sport, because profits flowed back into it, often at grassroots levels. And in some cases, that is true. The more than $6 million FIFA now sends to each of its 211 member associations over four years help build fields and maintain youth leagues.
In other cases, however, especially during Sepp Blatter’s presidency, the Joe Schmos in charge of tiny member associations pocketed the money for themselves. They, of course, loved the scheme, so they’d vote for Blatter in elections, and in general for the status quo. FIFA, therefore, had no incentive to police the corruption. So it didn’t, and millions upon millions of dollars went to waste.
Last decade, that corruption was exposed, and the entire Blatter regime ousted by scandal. Under Infantino, FIFA has beefed up its oversight. It has implemented systems that supposedly ensure the money goes to sporting development.
But the fundamental distribution scheme remains in place. It’s inherently exploitable. Bad actors still exist, and could prey on dire circumstances. Which is why the thought of FIFA managing a nine- or 10-figure relief fund is so troublesome.
The relief fund, however, is also FIFA’s big chance. To prove its “commitment to the game … to the people … to the planet,” as its website trumpets. To prove its competence. To erase its ugly public image, and prove that reform is real.
Turning concept into action is a gigantic undertaking. Apportioning emergency relief is impossibly complex. To start, FIFA should:
1. Concede responsibility. FIFA adores “task forces” and “committees.” Form some that comprise both soccer governors and renowned economists and other non-soccer experts. This isn’t a soccer problem. It’s a global economic problem, and soccer is one of many industries under threat. The solution requires people who understand the soccer ecosystem and people who understand what’s happening above and around it.
2. Pledge equal money to women’s soccer and men’s soccer, until the under-resourced women’s game literally does not need any more. There’s no reason one would deserve more support than the other. Because the women’s game has been under-resourced for so long, though, supporting it at this critical juncture requires significantly less funding. So do that, in full. Perhaps take some of the $500 million earmarked for (and $1 billion promised to) women’s soccer over the next four years and accelerate it. There’s a worry that the pandemic will undo all of women’s soccer’s recent progress. Extinguish that worry right off the bat.
Beyond those, there are few easy answers. There is, though, an opportunity for FIFA to find them, rescue soccer, and secure a massive PR win. Its early response has been promising. “No match, no competition, no league is worth risking a single human life,” Infantino said in a Friday statement preaching patience.
With respect to the emergency fund, he also said: “The world will know where the money goes and, equally important, why the money goes there.”
Now it’s the world’s turn to hold him to his word.
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