FIFA Loss Triples to $369 Million on Mounting Costs of Scandal

(Bloomberg) -- FIFA, the governing body of global soccer, lost $369 million in 2016, triple the losses in the year before, according to financial statements released Friday.

The organization blamed the ballooning loss on a new accounting policy, increased investment in soccer and "one-off extraordinary expenses," which are likely to mean legal fees related to the 2015 international corruption scandal that nearly destroyed FIFA. In the last two years, FIFA has spent nearly $130 million on lawyers and court costs.

The financial declaration comes a year before FIFA stages the next World Cup, the most-watched event in global sports and a cash cow that generates almost all of its income. FIFA said it had booked 76 percent of the $5.5 billion in revenue it expects to make in this current four-year cycle.

It's not clear whether it can make up the difference. Twenty-four sponsorship slots are still open with less than 14 months before the tournament. Since the last World Cup, FIFA has added just three sponsors: Chinese companies Wanda and Hisense, and Russia's Alfa-Bank. In Russia, which will host the 2018 World Cup, it's struggling to secure a targeted $120 million from broadcasters, with a trio of state-owned networks unwilling to pay three times more than they to air the 2014 tournament.

Finding the money is critical to new FIFA president Gianni Infantino, who was elected to replace Joseph “Sepp” Blatter on a campaign that pledged to vastly increase handouts to FIFA's 211 national federations. FIFA blamed some of the 2016 loss on what it described as “ill-considered previous investments” by the former regime, including a new soccer museum in Zurich.

Infantino said that the last year was devoted to “the first and vital steps to restore trust ... This includes employing a responsible and transparent way of managing revenue and expenditure.”

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net.

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Rob Golum