FIFA’s financial losses accelerated last year as legal costs mounted at football’s "scandal-hit" governing body and new President Gianni Infantino pushed ahead with "sharp increases in development funding for member associations around the world," according to Ralph Atkins of the FINANCIAL TIMES. FIFA's annual report revealed that the organization reported a loss of $391M in '16 before taxes and the result on investments and other financial income, "up from a restated" $117M loss the previous financial year. The latest loss "partly reflected accounting changes," which influenced the timing of when costs and revenues are booked over the four-year cycles around World Cup competitions. In the past, FIFA used to "smooth them over the four-year cycle." Spending on "development and education" jumped to $428M from $186M in '15. Legal costs related to the multiple investigations FIFA faces hit $50.5M, up from $20.2M in the previous year (FT, 4/7). REUTERS' John Revill reported legal costs more than doubled, but FIFA "expects these to go down considerably" in the future. What FIFA called "ill-considered previous investments," like its "struggling" football museum and hotel in Zurich as well as a new accounting standard "were also behind the shortfall." As a result of the losses, the organization's reserves fell to $1.04B from $1.41B in '15. FIFA said that it expects a $489M loss in '17 but "should" turn a $1.07B profit in '18 when the World Cup is held in Russia, "pushing its financial result" for the '14-18 period into a $100M profit. Despite the shortfall, Infantino said that "he would stick to his plans to increase the payout" to FAs around the world to develop the sport (REUTERS, 4/7). The AP reported FIFA's confidence "will be tested" with 24 slots currently unsold in a 34-sponsor program for the 2018 World Cup. The organization said, "It goes without saying that stagnant global trade and subdued investment, combined with investigations surrounding previous FIFA officials, have put pressure on the organization's overall revenue generation" (AP, 4/7).
