Fifa’s 2017 Financial Report, published back in December, took many people by surprise.
Revenue was up on budget, 98 per cent of budgeted revenue for 2015-2018 was already contracted, the net deficit was much smaller than expected, and Fifa ended the year with assets of $4.4bn of which 65 per cent were cash or cash equivalents.
Hence the headline of the financial highlights summary: ‘Solid financial results and a promising outlook.’
Fair enough. But as ever, it’s all about context.
The context in this case being, of course, an organisation still reeling from its global disgrace, and still living with the consequences.
And nowhere are the consequences more evident than in Fifa’s sponsorship programme.
Prior to the 2015-18 period (Fifa, like the IOC, plans its finances in four-year cycles book-ended by its biggest event) Fifa had operated a simple sponsorship model, which had evolved over time into three tiers: one of of six to eight global ‘Fifa Partners’; a second of six to eight international ‘World Cup Sponsors’; and a third tier of exclusively local brands from the World Cup host country.
For the 2014 World Cup in Brazil, this model generated $1.6bn of sponsorship revenue from twenty brands – six in tier one, eight in tier two and six in the third, host country tier.
But for 2015-18, Fifa introduced its biggest sponsorship innovation in years, by internationalising and expanding the third tier to 20 ‘Regional Supporters’, in five groups of four, equally split across the five continents.
Or at least, that was the idea.
Then came that infamous day in May 2015: the raids in Zurich and Miami, and US Attorney General Loretta Lynch’s damning statement in New York.
The rest was history – and Fifa’s brave new international third tier was toast.
Only six brands to date have bought into the third tier, three of them Russian – clearly attracted only by the host country opportunity.
The second tier has gone backwards too. Whereas in Brazil there were eight sponsors at this level, there are only five for Russia to date.
Tier one has actually grown, from six in Brazil to seven in Russia. But the churn is telling. Out have gone Emirates and Sony, to be replaced by Qatar Airways, Gazprom and Wanda. As it stands, Fifa has three sponsors fewer than it had in Brazil.
Most telling of all are the numbers. Fifa is now forecasting that its sponsorship revenue for 2015-18 will be £179m down on 2011-14.
Fifa’s sponsorship revenue has gone south, and its sponsorship allure has gone east.
But if you want to put a price, in sponsorship terms, on the cost of Fifa’s disgrace, a much better comparison is with the IOC – Fifa’s major competitor for global sports sponsors.
Back in December 2014, when the IOC published its Agenda 2020 roadmap for innovation and a sustainable future, I wrote that one of IOC president Thomas Bach’s motives was to make the IOC and the Olympics far more buyable for sponsors than Fifa and the World Cup.
It was a smart move given the controversy already surrounding the IOC’s major competitor, and when Fifa unravelled only a few months later it looked like a masterstroke.
Fast forward to the IOC’s financial report for 2017. Revenue from the IOC’s global sponsorship programme – which has recently signed up an array of high quality global brands from East and West alike – grew 20 per cent year on year and over 200 per cent compared to the same stage in the previous Olympic cycle.
By 2020 it could be generating twice as much revenue as Fifa’s equivalent, despite having been a similar size not long ago.
And the Tokyo 2020 local sponsorship programme – the Olympics equivalent to Fifa’s third tier – has been the most successful in Olympics history, attracting almost fifty brands and generating $3bn – sponsorship growth Fifa can only dream about.
And I don’t see this changing anytime soon.
Yes, Fifa can innovate its sponsorship offering, which is an increasingly blunt, impressions-led tool in an engagement-driven world.
Yes, the United USA-Canada-Mexico 2026 World Cup bid is promising $3.6bn in sponsorship, but 2026 is a long way away, there’s no guarantee that the United bid will win, and even if it does, LA 2028 will be serious competition for the same dollar.
But whatever Fifa does, it is still totally dependent on the men’s World Cup, and once Russia 2018 is over, all roads lead to Qatar 2022 and everything that signifies about the malign legacies of Fifa 1.0.
Hence the only other option, the red thread running through all the biggest moments in modern sports marketing: if your product’s no good, re-imagine it or create a new one.
Like the Premier League and the Champions League. And now, apparently, the Club World Cup and the Nations League. Thomas Bach had Agenda 2020. Gianni Infantino has Agenda $25bn.
Tim Crow has been at the forefront of sports marketing for thirty years and advises a range of companies at the intersection of sport, marketing, media and tech. Follow him on Twitter @shaymantim.