FIFA expects widening losses in 2017, world soccer’s ruling body said yesterday, as costs linked to its biggest ever corruption scandal and failed investments contributed to a $391 million pretax shortfall in 2016.
The 2016 loss, up from a restated $117 million shortfall for 2015, was blamed on increased legal costs and the extraordinary general congress called to elect a new president after Sepp Blatter resigned after graft allegations emerged in 2015.
Legal costs more than doubled to $50 million during 2015, but FIFA expects these to go down considerably in future.
What FIFA called “ill-considered previous investments,” like its struggling football museum and hotel in Zurich as well as a new accounting standard were also behind the shortfall.
It also increased its spending on what it calls education and development to $428 million during 2016 from $187 million a year earlier.
As a result of the losses, disclosed in FIFA’s annual financial report, the organisation’s reserves fell to $1.048 billion from $1.41 billion in 2015.
FIFA said it expects a $489 million loss in 2017 but should turn a $1.07 billion profit in 2018 when the World Cup is held in Russia, pushing its financial result for the 2014 to 2018 period into a $100 million profit.