The Value Of FIFA - Will It Hold?

The sports world was rocked a couple weeks ago when the FIFA scandal broke out as the U.S. Department of Justice accused the international soccer governing organization of 47 counts of corruption charges, including racketeering, wire fraud, money laundering, and bribery. Much like valuing a person’s right of publicity, a serious scandal can negatively impact a celebrity’s brand value. FIFA’s reputation has suffered a similar blow, also resulting in a reduction of the value of the FIFA brand’s persona.

Gamers playing FIFA 14 on their xBox consoles may continue to play despite the scandal, but others will take notice – primarily corporate sponsors. Luckily for the brand, FIFA President Sepp Blatter resigned. However, what FIFA decides to do from this point on will determine if it can maintain its value. FIFA is at the inflection point of its value graph, with the sponsors holding the bag of factors. The scandal has damaged the brand value significantly and it has billions to lose. 

How much is FIFA worth? CNN recently published an article looking at FIFA’s numbers, and here’s a recap:

  • FIFA made $5.7 billion in revenue in the four years leading up to the 2014 World Cup
  • The 2014 World Cup earned FIFA a $2.6 billion profit
  • Total marketing rights for the 2014 World Cup amounted to $4 billion
  • FIFA collected $1.6 billion in sponsorships during the 2011-2014 period

Projections for the 2018 World Cup may drop 40% if major sponsors turn their backs on FIFA. Even prior to the filing of the corruption indictments, some sponsors had already backed away from renewing agreements after the 2014 World Cup. Those who didn’t renew agreements included Sony, Emirates Airline, Castrol (BP), Johnson & Johnson, and Continental AG. If those sponsorships can’t be replaced, FIFA will immediately lose significant brand value.

Current and future sponsors won’t be satisfied with anything short of substantial reform. Much like a company that files for a reorganization plan, FIFA should form a panel within made up of administrators, sponsors, broadcasters and players. And FIFA should especially include the players, as they are the face of soccer. Soccer fans will relate to the players. And while some fans say they don’t care, eventually they will, once they put on their consumer caps. 

Not all of soccer has lost its value. Manchester United was recently named the first $1 billion soccer brand, according to a recent report by Brand Finance. The club continues to sign up sponsors such as Adidas and Chevrolet regardless of the team barely making qualifications to the Champion League Play-Off Round. Plus its $14 billion deal for global broadcast rights to the English Premier League is a whopping 70% increase on the current deal.

There is value in the sport of soccer. But can FIFA continue to hold its own value? Like a disgraced celebrity, the soccer world will need to see if FIFA’s character can rebuild. Once FIFA’s reputation takes a positive upswing, they can regain those lost billions.

1 comment about "The Value Of FIFA - Will It Hold?".
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  1. Elisabeth Gleckler from Tulane University, June 19, 2015 at 7:18 p.m.

    Sepp had better step down or the value will really drop.

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