FIFA makes $184 million profit in 2008

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FIFA president Sepp Blatter accepts football will eventually be hit by the global financial crisis despite the world governing body announcing a profit of $184 million (135 million EUROS) for 2008 on Friday.

FIFA's annual financial report said it had an income of $957 million (703 million EUROS) last year. A total of 95 per cent was generated by television, marketing and sponsorship money raised from the World Cup.

"We are in a rather comfortable situation," Blatter said at a news conference. "But let us not forget that the economic crisis which is rampant can be compared to a tsunami in its first wave. Football will also be affected."

FIFA even made a profit of $16 million (11.8 million EUROS) in managing its assets last year. Its equity now stands at $902 million (662 million EUROS), boosted by a successful policy of hedging foreign currency.

Financial director Markus Kuttner sounded a cautious note, saying FIFA was only halfway through a four-year financial cycle leading up to the 2010 World Cup in South Africa. The tournament will generate $3.2 billion (2.36 billion EUROS) for FIFA.

"We should not forget that 95 per cent of revenue is from the World Cup," Kuttner said. "Almost all our eggs are in the same basket. We have a high exposure here."

Kuttner said the financial cycle could only be declared a success once the World Cup was completed in July next year and all commercial partners had fulfilled their contractual obligations.

At least 28 of the 64 matches being played at the monthlong tournament have already sold out.

"We have sold close to 800,000 tickets in a month," FIFA secretary-general Jerome Valcke said. "Two-thirds to the international market, one-third to the domestic market.

"The two countries buying the most are the USA and England," he added. "Definitely, the demand is huge."

However, slow ticket sales for the Confederations Cup - an eight-nation test event being played in South Africa in June - have been a concern, Valcke said.

Valcke said none of FIFA's sponsors had asked to reassess contracts or payment schedules, including troubled Indian software giant Satyam.

Blatter and Satyam's founder and former chairman, B. Ramalinga Raju, signed a deal in November 2007 for the company to provide FIFA's computer services at the next two World Cups and Confederations Cups. The value of the contract was not disclosed.

The company has been struggling to survive since Jan. 7, when Raju confessed to filling the company's balance sheets with $1 billion (0.74 billion EUROS) in "fictitious" assets and "nonexistent" cash.

"We have no fear about what will happen in the future with Satyam," Valcke said. "It is not a huge financial contractor, but they do have to deliver a lot of services. We have been in touch with the new CEO quite often."

A total of 40 Satyam staff are working exclusively on the FIFA project.

Blatter and Valcke will fly to South Africa next week to attend the opening of the new stadium being built in Rustenberg, one of the World Cup and Confederations Cup venues.

Valcke said nine of the World Cup stadiums would be delivered by December, with the 10th and final stadium in Cape Town scheduled for completion next February.

(Source: msn.foxsports.com)