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The Fédération Internationale de Football Association, or FIFA, is the international governing body of soccer, the world’s most popular game. FIFA has been under massive scrutiny from the fans, media, and government officials in the past month over the re-election, and subsequent resignation, of their embattled president and corruption charges leveled against nine current and former top FIFA officials. These charges culminated in the arrest of seven FIFA officials in Zurich, Switzerland on May 27th. These officials are now facing extradition to the United States on broad corruption charges, which include racketeering, wire fraud, money laundering, and tax evasion.
This indictment by U.S. Attorney General Loretta Lynch, who referred to the corruption as “rampant, systemic, and deep-rooted”, was a polarizing move internationally. While there was a lot of support behind the U.S., especially in Europe, there was also an outspoken conglomerate of nations against the indictment. This opposition is led by Russia, the nation slotted to host the controversial 2018 world cup. Russian President Vladimir Putin called the indictment “another blatant attempt to extend [U.S.] jurisdiction to other states”, and proceeded to accuse the U.S. of employing the same unlawful “methods for achieving their selfish goals” that were used in pursuing high profile fugitive Edward Snowden.
Why is it that the indictment of leaders at an organization that is blatantly unethical, if not corrupt, is causing such a stir on an international scale? The short answer is that, aside from the high emotions that historically run with international soccer, it’s all about the money.
Global soccer is a multi-billion dollar industry and FIFA presides over it all. FIFA’s primary tournament, The World Cup, has grown over the past few decades, becoming a “quadrennial cash cow” for the organization. During the four year World Cup cycle from 2011-2014, FIFA generated a record $5.72 billion of revenue, 70% of which came from the sale of marketing and television rights to the 2014 World Cup in Brazil. FIFA currently holds cash reserves of approximately $1.52 billion.
This massive amount of money is accompanied by the ability to make powerful decisions; the most powerful of all being the location of future world cups. Not only does the World Cup draw in large revenue for FIFA, but also for the host country. The World Cup can have a significant positive impact on the host nation’s economy. According to the Getulio Vargas Foundation, 14 million jobs were created because of the World Cup from 2011-2014, most of these in the host nation of Brazil. The 2014 World Cup had a total attendance of 3,429,873 from all over the world. These millions of fans had to pay for hotel, food, and travel accommodations, which injected billions into the Brazilian economy. Ernst & Young reported that “Tax revenue for the host country as a result of investments in the FIFA World Cup shall amount to as much as USD 7.2 billion.” Given these statistics, it is clear why many nations, especially Russia, the planned host of the 2018 World Cup, are outraged by the indictment. Russia could stand to lose billions of dollars if the indictment leads to the revocation of their right to host the 2018 World Cup.
It is clear to see how FIFA has the power to impact the economies of a small number of nations by granting them the right to host the World Cup, but FIFA’s monetary influence is felt all across the globe in each of its 209 members. Similar to the United Nations or to a national government, FIFA distributes funds to its members via grants. Each member nation receives an annual grant, through the Financial Assistance Program (FAP), of $250,000, and this year all 209 members are receiving an additional $500,000 bonus stemming from profits linked to the 2014 World Cup. Over the past 4 years, 90% of FIFA member nations have received between $1.8 million and $2.1 million from FAP. In addition to FAP, FIFA’s Goal Program allows nations to apply for up to $500,000 (soon to be $600,000) to fund specific soccer related projects. This few million dollars in aid can create jobs and have an impact on a nation’s economy, especially in many of the smaller nations that belong to FIFA.
Overall, FIFA is a multi-billion dollar corporation with the power to create millions of jobs and inject billions of dollars into a nation’s economy. With all this power, it should come as no surprise that almost all of its decisions are polarizing and can cause tensions to run high on a global scale.
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