World Cup deals a hard sell
The 2018 World Cup has cost Russia billions of dollars to stage and will make Fifa hundreds of millions in profit.
Russia’s official budget of US$11.6 billion ($16.5b) spent on projects for the tournament is less than the estimated US$15b spent by Brazil on the 2014 World Cup.
The budget to meet President Vladimir Putin’s pledge to showcase a warmer, more open Russia excludes some transport projects the tournament relies on. It also looks a bargain compared to the US$51b bill for the 2014 Winter Olympics that extended from Sochi into nearby mountains.
Fifa will top US$6b for the four-year commercial cycle tied to this World Cup, beating its US$5.656b target. The marquee tournament is overwhelmingly the main source of Fifa income.
That target, however, was conservative compared to US$5.72b of overall income booked by Fifa in the Brazilian World Cup period.
Sponsors have been harder to sign since the May 2015 revelation of American and Swiss federal investigations of bribery rocked Fifa and dozens of international football leaders.
Hard times
Life was relatively good for Fifa and Russia in December 2010 when hosting rights were awarded.
The 2010 World Cup in South Africa ran smoother than many feared, and helped deliver a US$631m Fifa profit for a four-year period that included a global financial crash. The 2006 World Cup in Germany earned Fifa around US$700m.
Oil prices started a surge beyond US$100 per barrel, fuelling Russia for its Olympic and World Cup hosting.
By May 2015, oil prices had slumped. Russian banks and businessmen were hit by international sanctions following the annexation of Crimea and the rouble value fell.
Fifa’s attempts to sell twotournament sponsorship packages with the 2022 World Cup in Qatar stalled.
2018 sales
Fifa wanted 14 deals in its toptier “Partner” category — including long-term backers adidas and Coca-Cola — and second-tier “Sponsor” category. There are just 12.
Companies from the US, Japan, Germany and Britain did not renew after the 2014 World Cup.
Logical replacements Russian energy giant Gazprom and Qatar Airways were joined by four Chinese in the 12-sponsor lineup.
Fifa’s previous leadership revamped the third-tier programme for 20 backers — four from each of five global regions — to increase revenue. It did not work outside of Russia and China.
The total one week before kickoff: Four Russian deals, three with state-controlled firms; three Chinese sponsors; none from the Americas or Africa and the Middle East. The overall 34-sponsor programme found 19 buyers.
Howeverrights deals struck in 2011 with Qatar-owned Al Jazeera Sport, now BeIN, and US broadcasters Fox and Telemundo reaped a big raise over 2010-2014 tournament prices.
Fifa lost about US$100m of expected income when Italy was eliminated in November before a national TV deal was agreed at a discount.
Ticket sales are below the 3 million mark achieved in South Africa and Brazil.
And the scaled-back 35,000-capacity stadiums in Yekaterinburg and Kaliningrad are small by modern World Cup standards.