April 26 (Bloomberg) -- FIFA, soccer’s governing body, surpassed its revenue estimates for last year by 22 percent as it benefited from income from television and marketing rights to the 2014 World Cup.
The Zurich-based organization had sales of $873 million, after budgeting for $715 million, according to an annual financial statement posted on its website.
“I am delighted to note that, financially, FIFA stands on rock-solid foundations,” president Sepp Blatter said in a foreword to the 98-page document. FIFA’s reserves have increased to $1.3 billion as the body tries to protect itself from dangers such as the cancellation of its $5 billion World Cup.
The World Cup, which is played every four years, is FIFA’s biggest revenue-producing event. Sales beat the estimate because of “extremely successful” marketing of television and branding rights for the next tournament in Brazil, the financial statement said.
Expenditure was $37 million lower than the $703 million approved by FIFA’s Congress because of cost-cutting measures and deferred payments related to the World Cup. Julio Grondona, the chairman of FIFA’s finance committee, said contracts worth $2.3 billion have already been signed for the 2018 World Cup in Russia, while the revenue for the event in Brazil will be more than FIFA forecast.
Rising construction costs, labor disputes and a disagreement between the Brazilian government and FIFA over legislation have slowed the preparations for the tournament.
“FIFA’s economic success depends strongly on successful marketing, and above all, the smooth staging of the World Cup,” Grondona said. “Therefore, the upcoming World Cups must also be prepared financially with great care and precision, and the necessary reserves for any for any operative risks must be built up.”
FIFA said it expects revenue of $954 million next year, with $575 million coming from television and $323 million from marketing. The financial report also says FIFA will pay $50 million in 2013 to meet the cost of worldwide insurance for players appearing in national team matches after reaching an agreement with clubs.
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