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SBD Global/March 29, 2013/Finance

FA Could Take $39.5M Hit If England Fails To Qualify For 2014 World Cup In Brazil

England's Frank Lampard celebrates a goal during a World Cup qualifier vs. San Marino March 22.
The FA stands to miss out on as much as £26M ($39.5M) in income if England fails to qualify for next year’s World Cup, according to Simon Hart of the London TELEGRAPH. Additionally, the FA "could also be left in a seriously weakened position" when it comes to negotiating new sponsorship deals at the end of the '13-14 season. England's 1-1 draw in Podgorica on Tuesday has left Roy Hodgson’s men "with an uphill task" to secure its place in Brazil next summer. Aside from the "national humiliation," failure to reach the World Cup finals for the first time since '94 would have "serious implications for the FA’s bank balance." Just by making it to Brazil, the FA would be guaranteed £8M ($12.1M) in prize money. The figure rises to £16M ($24.3M) for reaching the quarter-finals, a "reasonable expectation for England based on past tournaments," and £26.5M ($40.2M) for winning the World Cup outright. It is safe to say that the FA will not be factoring the top prize into its forecasts, though it would "certainly be expecting a financial bonanza" from the dozens of licensing agreements it would sign with retailers and manufacturers. A source closely involved with the FA’s licensing deals said that the governing body "could expect to make at least" £10M ($15.2M) from the demand for merchandise, principally from the royalties it would receive on replica England shirts. The source said, “The FA will get a royalty on every shirt sold, so put that together and you get to a pretty big number." World Cup elimination would also have a knock-on effect on the wider U.K. economy, with retailers "missing out on the surge in sales in beer, food and televisions that normally accompanies England’s qualification for championship finals." The FA works in four-year World Cup cycles when it comes to signing England commercial deals, which means its current contracts with Vauxhall, Umbro, Mars, Carlsberg, Lucozade, Nivea and Marks and Spencer "all expire at the same time at the end of the World Cup" (TELEGRAPH, 3/28).
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