FIFA has announced a loss of $369 million for the 2016 financial year.
The figure revealed by world football’s governing body can partly be put down to legal expenses caused by the ongoing corruption scandal.
Legal costs rose from £20.2 million (£16 million/€19 million) to $50 million (£40 million/€47 million) while FIFA has also adopted a new revenue recognition standard called IFRS 15.
This sees figures now reflect the organization’s business model over a four-year World Cup cycle.
FIFA claim that under the new method there will be $1 billion of profit in 2018, the year of the next World Cup in Russia, although further losses are expected this year.
The organization has also spent money on development projects and grants promised by newly elected President Gianni Infantino.
“The net result for 2016 amounted to USD minus 369 million due to IFRS 15 revenue recognition, increased investment in football development and one-off extraordinary expenses,” a statement said.
FIFA claim that their new financial reports show “transparency,” with the salary of key figures such as Infantino included.
The President took home a gross salary of $1.2 million.
“Twenty sixteen was the turning point when the first and vital steps to restore trust in the organization were taken,” Infantino said.
“This includes employing a responsible and transparent way of managing revenue and expenditure.
“We are building a solid framework to ensure thorough oversight and proper accountability, and placing football at the heart of everything that our organisation does: after all, we need to ensure that every bit of revenue is well invested in the game.
“The FIFA Forward Development Program is an embodiment of this commitment.”
Tomaž Vesel, the chairperson of FIFA’s Audit and Compliance Committee, said that 2016 was a year which will “safeguard” the organization’s principles in the future.
“One of the foremost actions in this regard was the establishment of a dedicated compliance division,” he said.
“By adopting an unyielding compliance attitude, FIFA has given a much-needed signal of intent to evolve and never again face the problems of the all-too-recent past.
“Clear rules and principles of good governance have led to unwavering action.”
The financial report can be read here.
By Dan Palmer
Republished with permission from insidethegames.biz.