Billion Dollars, for a Non-Profit!

By Kevin Gandhi

Edited by Liz Maria Kuriakose, Associate Editor, The Indian Economist

A non-profit organisation is, by definition, a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. It is one that uses its surplus revenues to achieve its targets rather than distributing them as dividends. And it is in this definition precisely, where the Fédération Internationale de Football Association, or simply FIFA, finds its advantage.

FIFA as we all know is responsible for the organisation of the World Cup Football. Formed in 1904, the organisation has grown into a globally renowned brand with recognition virtually amongst all classes and age groups across the planet. Ever since its formation, FIFA has remained a controversial topic with arguments related to its transgressions on the one side, and its efforts to create a global football brotherhood sentiment on the other. Either way, not one can be oblivious to its impact on the global economy.

If you’ve watched the John Oliver show about FIFA, you’d know about the apparent grotesque inner functioning of the organisation. Let the facts-story begin. Now although FIFA works as a non-profit organization, it holds an amount exceeding a billion dollars in reserves. Yes, a non-profit with more than a billion dollars in the bank. Moreover, the 2014 world cup was hosted by Brazil, a developing economy where the sport is more than just worshipped. Now this seemed to be a brilliant news for the country, especially since this was estimated to inject billions of dollars to Brazil’s economy. However, violent protests broke out in the country with most of their fans refusing to host this World Cup. Following are few of the reasons for the same:

  • 270 million dollars was spent on building a new stadium in the isolated city of Manaus. This city was so remote, that raw materials had to be brought in by boats up the Amazon River. This seems to be more or less fair, until you get to know that the stadium would be used for just 4 matches, after which it would become absolutely futile and redundant.
  • One would think that at least the aforementioned fact would help the country earn money and boost its economy in a way. Quite the opposite, in fact. The host country usually does not stand to earn any money. It is the FIFA that gets away with the money leaving the country with barely anything to feast on.
  • As per Brazil’s estimates, approximately 270 million dollars of all kinds of taxes were avoided by FIFA. The organisation was exempted from all of it.
  • According to estimates, about 15 billion dollars will be spent on hosting the World Cup by the Brazilian government, money which could have been spent on essentials such as electricity, transportation and education instead.
  • Despite the anti-alcohol laws in Brazil, Budweiser, which is one of FIFA’s primary sponsors, was allowed to sell beer in the stadiums due to the passage of the Budweiser Bill. Yes, laws were altered to fit FIFA’s demands.
  • According to some reports, around 19,000 families residing in Rio de Janeiro have been relocated since 2009, to make way for the World Cup related projects.

All of these facts are only related to the 2014 World Cup. Apart from this, FIFA has been accused of a variety of malfeasances such as corruption, bribery, legislative interferences, sexism, etc. Either way, there is no denying that even after such stone-cold evidence of wrong doings, FIFA has in no way failed to attract hundreds of millions of people from all over the globe who have declared the organization a church to the religion of football.

All said and done, the debate still prevails over whether or not an economy receives concrete benefits by hosting the FIFA World Cup. The evidence is mixed. Pro-World Cup advocates argue that the employment rate rises which helps in boosting the economy. Moreover, the tourism industry of the host nation flourishes which again, boosts economic growth. The dismissive advocates mention factors and argue on points, most of which are mentioned above.

Now although the evidence is inclined towards having a negative effect on the host nation’s economy, the FIFA World Cup has not failed to tactfully allure majority of the world’s population. It may not add much to the economy, but the socio-cultural norms of the country are definitely electrified and exhilarated, and this is the precise reason why FIFA over its 110-year career, has grown into what it is today.

Kevin is a second year, undergraduate business student at NMIMS University, Mumbai. His hobbies include listening to bands such as Coldplay and Oasis, writing, going on nightly runs and occasionally playing the guitar. He has also participated in various Model UNs across the country. He loves to travel and is an enthusiastic supporter of the Kolkata Knight Riders.