If you create a product that everyone wants to buy, but the manufacturer requires almost no investment, then it is expected to make a lot of money, but is there such a business? FIFA (FIFA) demonstration for you to see.
In addition to winning the game, the winning team of the 2022 FIFA World Cup in Qatar will also receive a total of US$44 million in bonuses. These bonuses come from the US$440 million total bonus provided by FIFA for this World Football Championship.
In addition to the amount spent during the game, FIFA will also be responsible for paying the World Cup Organizing Committee including bonuses, travel expenses for all participating teams, and a fund (legacy fund) to allow the World Cup host country to promote football after the game.
According to FIFA's recently announced financial status, if a four-year revenue cycle for each World Cup is taken as a revenue cycle, FIFA's revenue in the cycle from 2015 to 2018 was US$6.4 billion. Among them, during the 2018 Russia World Cup football match, FIFA's total revenue reached more than 4.6 billion U.S. dollars. In 2021, FIFA's revenue will also be 766 million U.S. dollars.
Why is FIFA so profitable?
TV broadcast licensing fees
FIFA’s largest revenue is TV broadcasting rights fees, including large-scale international football matches such as the World Cup. In the above-mentioned revenue cycle from 2015 to 2018, of the US$6.4 billion earned by FIFA, global TV broadcasting rights revenue sold accounted for US$4.6 billion.
Advertising royalties
In addition to television broadcast royalties, the advertising fees paid by world-renowned brands in FIFA’s various competitions are also considerable.
The FIFA World Cup is the most watched TV event on earth. International brands are trying to place advertisements during the game to expose their products. In 2022, it is expected that more than 5 billion people, more than half of the earth's population, will watch the game. For international brands, this is an advertising opportunity that must be grasped.
Secondly, these international brands cooperate with FIFA, including all FIFA-affiliated non-profit organizations, to invest in football at the international, national, grassroots and other levels.
In the 2015 to 2018 World Cup cycle, advertising royalties brought FIFA 1.66 billion US dollars in revenue. Even in 2021, when no major events are held, advertising also earned FIFA 131 million US dollars.
International match ticket revenue
Another money-spinner for FIFA is match ticket revenue.
All revenue from ticket sales is managed by a subsidiary owned by FIFA, which generated $712 million in revenue during the 2015-2018 World Cup cycle.
In 2021, about 600,000 people will participate in the Arab Cup (The Arab Cup Cup) football game ticket sales are estimated to reach 12 million US dollars. About 3 million tickets for the 2022 FIFA World Cup have been sold, with prices ranging from the most affordable US$100 (to the most expensive US$1,100). It will definitely be another good year for FIFA.
Trademark licensing gold
Finally, FIFA also makes profits through trademark licensing, the most famous of which is Electronic Arts. EA)'s FIFA football video game series. It is reported that EA has generated global sales of US$20 billion during its 20-year contract relationship with FIFA, which is quite impressive.
According to public information, EA must pay FIFA at least US$150 million in royalties every year to obtain the right to use the FIFA trademark. In 2021, FIFA earned a total of US$180 million in trademark licensing revenue.
