Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Dahmane v KRC Genk: Bosman 2.0 or Storm in a Teacup?

Mohamed Dahmane is a professional football player of French-Algerian origin, who has played for a variety of European clubs, including French club US Mauberge, Belgian club RAEC Mons and Turkish club Bucaspor. However, he will mostly be remembered as the player whose legal dispute with his former club (Belgian club KRC Genk) revived the debate on football players’ labour rights.  More...

Get Up, Stand Up at the Olympics. A review of the IOC's policy towards political statements by Athletes. By Frédérique Faut

The Olympic Games are a universal moment of celebration of sporting excellence. But, attention is also quickly drawn to their dark side, such as environmental issues, human rights breaches and poor living conditions of people living near the Olympic sites. In comparison, however, little commentary space is devoted to the views of athletes, the people making the Olympics. This article tries to remediate this, by focussing on Rule 50 of the Olympic Charter which prevents athletes from freely expressing their (political) thoughts.  More...

Final Report on the FIFA Governance Reform Project: The Past and Future of FIFA’s Good Governance Gap

Qatar’s successful bid to host the 2022 World Cup left many people thunderstruck: How can a country with a population of 2 million people and with absolutely no football tradition host the biggest football event in the world? Furthermore, how on earth can players and fans alike survive when the temperature is expected to exceed 50 °C during the month (June) the tournament is supposed to take place?

Other people were less surprised when FIFA’s President, Sepp Blatter, pulled the piece of paper with the word “Qatar” out of the envelope on 2 December 2010. This was just the latest move by a sporting body that was reinforcing a reputation of being over-conservative, corrupt, prone to conflict-of-interest and convinced of being above any Law, be it national or international.More...

Doping Paradize – How Jamaica became the Wild West of Doping

Since the landing on the sporting earth of the Übermensch, aka Usain Bolt, Jamaica has been at the centre of doping-related suspicions. Recently, it has been fueling those suspicions with its home-made scandal around the Jamaica Anti-Doping Commission (JADCO). The former executive of JADCO, Renee Anne Shirley, heavily criticized its functioning in August 2013, and Jamaica has been since then in the eye of the doping cyclone. More...

Cocaine, Doping and the Court of Arbitration for sport - “I don’t like the drugs, but the drugs like me”. By Antoine Duval

Beginning of April 2014, the Colombian Olympic Swimmer Omar Pinzón was cleared by the Court of Arbitration for Sport (CAS) of an adverse finding of Cocaine detected in a urine sample in 2013. He got lucky. Indeed, in his case the incredible mismanagement and dilettante habits of Bogotá’s anti-doping laboratory saved him from a dire fate: the two-year ban many other athletes have had the bad luck to experience. More...

The French “betting right”: a legislative Dr. Jekyll and Mr. Hyde. By Ben Van Rompuy

The European Commission has published the “Study on Sports Organisers’ Rights in the EU”, which was carried out by the ASSER International Sports Law Centre (T.M.C. Asser Institute) and the Institute for Information Law (University of Amsterdam). 

The study critically examines the legal protection of rights to sports events (sports organisers’ rights) and various issues regarding their commercial exploitation in the field of media and sports betting, both from a national and EU law perspective.  

In a number of posts, we will highlight some of the key findings of the study. 


“It was Hyde, after all, and Hyde alone, that was guilty.” 


In recent years, numerous national and European sports organisers have called for the adoption of a specific right to consent to the organisation of bets (“right to consent to bets”), by virtue of which no betting operator could offer bets on a sports event without first entering into a contractual agreement with the organiser. More...



Five Years UEFA Club Licensing Benchmarking Report – A Report on the Reports. By Frédérique Faut, Giandonato Marino and Oskar van Maren

Last week, UEFA, presented its annual Club Licensing Benchmark Report, which analyses socio-economic trends in European club football. The report is relevant in regard to the FFP rules, as it has been hailed by UEFA as a vindication of the early (positive) impact of FFP. This blog post is a report on the report. We go back in time, analysing the last 5 UEFA Benchmarking Reports, to provide a dynamic account of the reports findings. Indeed, the 2012 Benchmarking Report, can be better grasped in this context and longer-lasting trends be identified.More...

The EU State aid and Sport Saga – Setting the scene

The last years has seen the European Commission being put under increasing pressure to enforce EU State aid law in sport. For example, numerous Parliamentary questions have been asked by Members of the European Parliament[1] regarding alleged State aid to sporting clubs.  In reply to this pressure, on 21 March 2012, the European Commission, together with UEFA, issued a statement. More...

FFP for Dummies. All you need to know about UEFA’s Financial Fair Play Regulations.

Football-wise, 2014 will not only be remembered for the World Cup in Brazil. This year will also determine the credibility of UEFA’s highly controversial Financial Fair Play (FFP) Regulations. The FFP debate will soon be reaching a climax, since up to 76 European football clubs are facing sanctions by the UEFA Club Financial Control Body (CFCB). More...

Asser International Sports Law Blog | The FIFA Business – Part 1 – Where Does The Money Come From? - By Antoine Duval and Giandonato Marino

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The FIFA Business – Part 1 – Where Does The Money Come From? - By Antoine Duval and Giandonato Marino

On next Thursday the 2014 World Cup will kick off in Sao Paulo. But next week will also see the FIFA members meeting on Tuesday and Wednesday at a much awaited FIFA congress. For this special occasion we decided to review FIFA’s financial reports over the last ten years. This post is the first of two, analysing the reports and highlighting the main economic trends at play at FIFA. First, we will study the revenue streams and their evolution along the 2003-2013 time span. In order to ensure an accurate comparison, we have adjusted the revenues to inflation, in order to provide a level playing field easing the comparative analysis over the years and types of revenues. Our first two graphs gather the main revenue streams into two comparative overviews. Graph 1 brings together the different types of revenues in absolute numbers, while Graph 2 lays down the share of each type of revenues for any given year (the others category covers a bundle of minor revenue streams not directly relevant to our analysis).

 

 


Graph 1: FIFA revenues in Millions of Dollars, 2003-2013 (adjusted for inflation).

 


Graph 2: Share of each revenue stream in Total FIFA revenues 2003-2013

 

Since 2003, FIFA’s total revenues have more than doubled, from 685 Million$ to 1406 Million$. Its constant growth over the last decade turned negative only in 2011 and 2012 due to a fallout in broadcasting revenues (see below Graph 4). In terms of economic power this means that FIFA has doubled its financial capacity within ten years.  It has succeeded in developing new income streams, while also consolidating its traditional source of revenue: broadcasting rights.




Graph 3: Total FIFA revenues in Million$ 2003-2013 (adjusted for inflation)

 

Key to FIFA’s continuous enrichment were the broadcasting revenues. From 2006 to 2010 they nearly doubled from 391 Million$ to 779 Million$. A huge 100% jump! Since this peak, revenues have settled for a more modest amount of around 600 Million$, but still much higher than at the turn of the century. In any given year the broadcasting revenues represent 40 to 50% of FIFA’s total revenues. Thus, one can understand the paramount importance of broadcasting rights for the economic stability and health of FIFA. The progressive bite of the revised TV without frontier directive of the EU (revised in 1997), enabling countries to define certain World Cup games as “major events” which therefore must be broadcasted freely, might explain the recent fall in broadcasting revenues. In this context, recent decisions of the EU Courts, in cases T-68/08, C‑205/11 P and  C‑204/11 P reinforce the rights of the Member States to make use of the “major events” listing, this could, on the long run, limit the rise of the broadcasting revenues for FIFA.


 

Graph 4: FIFA Broadcasting Revenues 2003-2013 (adjusted to Inflation)

 

The marketing rights (see graph 5) constitute the second leg of FIFA’s financial income stream. They have been constantly growing since 2003. From 168 Million$ in 2003 to 419 Million$ in 2013, reaching quasi 150% growth (at constant prices). In recent years, this has been a more dynamic revenue stream than broadcasting rights, but it has remained less important in absolute terms. It seems that the FIFA Partners Programme launched by FIFA, probably inspired by the TOP Programme created by the IOC, is a tremendous success. Nowadays, marketing rights constitute 30 to 35% of FIFA’s total revenues. Together, broadcasting revenues and marketing rights amount to a staggering 75 to 85% of FIFA’s total revenues. A share which remained more or less stable over the latest years (see Graph2).


Graph 5: FIFA Revenues from Marketing rights 2003-2013

 

The rather minor revenue streams are constituted by the FIFA hospitality rights, licensing and brand licensing revenues. Hospitality rights revenues (Graph 6) are a relic from the past. They derive from the profits made by MATCH Hospitality, the sole company authorised by FIFA to offer and guarantee exclusive hospitality packages for every match of the FIFA World Cup directly or through its appointed sales agents. With the competition of internet-based travel agencies and the evolution of the ticketing system of FIFA under the pressure of the European Commission, the revenues of match hospitality have been dwindling over the last 10 years.




Graph 6: FIFA Hospitality Rights Revenues 2003-2013 (adjusted for inflation)


The FIFA licensing programme (Graph 7) derives its revenues from fixed royalty payments and variable profit shares paid for the use of the FIFA brand. FIFA’s licensing programme covers a broad range of activities, including for example numismatic and philatelic collections and the more classical retail & merchandising. After a peak at the World Cup 2006 in Germany, where FIFA licensing brought in 51 Million$, licensing revenues have remained more or less stable averaging at 10 to 20 Million$ a year.


 

Graph 7: FIFA Licensing Revenues 2003-2013 (adjusted for inflation)

 

Another closely related, but distinct for accountancy purposes, income stream, is the one generated by brand licensing (Graph 8). Five companies dispose of a specific agreement with FIFA: Adidas, Electronic Arts, Hublot, Louis Vuitton and Panini. Each of these companies holds a licence to use the FIFA Brand Marks in the advertising, marketing, promotion and sale of its licensed products or programmes. These long-term licensing agreements bring in more and more money, from 5 Million$ in 2003, to 58 Million$ in 2013. The biggest jump for a category of FIFA revenues.  Its success is exemplified by the world-wide fame of the eponym Electronic Arts video game: FIFA. However, all three revenue streams amount to less than 10% of FIFA’s total revenues in 2013, the lion share is still constituted by the broadcasting rights.



Graph 8: FIFA Brand Licensing Revenues 2003-2013 (adjusted for inflation)

 

Conclusion: Get rich and die getting richer?

Economically the last 10 years have been a phenomenal success for FIFA. Its revenues have grown substantially and it has, to some extent, managed to diversify its revenue streams. Indeed, FIFA is less and less dependent on broadcasting revenues, while relying more and more on marketing and brand licensing income streams. This diversification appears judicious as the broadcasting market seem to be losing steam, especially in light of a public will, at least at the European level, to control and tame the monopoly of FIFA over the broadcasting of the World Cup. Thus, FIFA is in a paradoxical situation. It will enter its congress engulfed in an unending governance crisis, but financially it looks as profitable as ever. In some way the big leap forward of FIFA’s recent, and highly successful, commercialization might cause the existential crisis it is now confronted with. Indeed, all this fresh money influx may have destabilized even more a governance system prone to favour nepotism. Hence, the paradox might be that FIFA got rich and might die (at least as we know it) because of it. This is also connected to the way FIFA distributes the revenues it collects, which will be the focus point of the second part of this blog series.

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