After the World Cup final, this is how to stop Fifa from being such a parasite
Countries like Brazil deserve more support from football’s immensely profitable non-profit overseer. The tax breaks for Fifa and its partners must end today
At the opening match of this year’s World Cup, three Brazilian children walked to the center of the pitch and released three doves flapping frantically toward the São Paulo sky. Choreographed as a reminder that soccer can create peace and goodwill, the spectacle immediately backfired with inadvertent symbolism: apparently two of the birds never made it out of the stadium alive.
Anyone who’s watched the World Cup over the last month has been met with a visual cavalcade of advertisements from partners of Fifa, football’sbeyond-corrupt governing body. But not unlike that avian display gone wrong, behind the shimmering scrim of spectacular billboards remain inconvenient truths. Here’s one: Fifa enjoys tax-exempt status at the World Cup, as do its corporate partners, and Brazil’s Internal Revenue Service has claimed – in a cautious estimate – that such exemptions rob the host country of nearly $250m.
Brazil just lost out on $22m in Saturday’s consolation match, and Fifastands to amass more than $4.5bn in revenues from this World Cup alone. All for orchestrating an upbeat shakedown that stoked the hopes of another host, only to leave the public bearing the costs.
After sucking one too many countries dry, the para-state parasite that is Fifa should surrender its tax breaks in Brazil before it packs up and leaves. Indeed, this should be the last tax-exempt World Cup.
By design, Fifa’s financial landscape is a vast expanse of grey. It actuallyclaims to make no demands for “a general tax exemption for sponsors and suppliers, or for any commercial activity in the host country.” It “only requires an easing of customs procedures” for importing materials necessary for the staging of the event. This is no different, Fifa contends, than any other major sporting event – like, say, the Super Bowl or the Olympics – but to deny tax exemption, potential host countries contend, is to torpedo a bid.
Fifa has long built a massive chasm between word and deed, and corporate giants – not struggling host nations – reap the benefits. Fifa partners like Budweiser have free rein in the exclusion zones that bubble-wrap stadiums where market competitors – let alone local vendors – are not allowed. Fifa even helped overturn a law banning beer in Brazilian soccer stadiums. How convenient.
When the World Cup ends on Sunday, Fifa says it will pour the bulk of its surpluses into worldwide development: “We continue to increase the resources that we put back into the game,” wrote the chairman of its finance committee. But this immensely profitable non-profit organization could do much more with its Zürich-based cash cow to support countries like Brazil. As former Fifa media officer Guido Tognoni told one of us, “Fifa has never a problem finance-wise, it’s a monopoly enterprise.”
Relinquishing tax-exempt status would be a pittance for Fifa, whichrecently reported reserves of $1.4bn. Its beleaguered president, Sepp Blatter, doled out $100m after protests rocked Brazil during the 2013 Confederations Cup – and a comparable sum to South Africa after the 2010 World Cup. But Fifa needs to move beyond these PR-friendly, drip-feed consolations and inscribe the principle of surplus-sharing in its partnership with each host country.
The International Olympic Committee – Fifa’s comrade in the global 1% – has demonstrated that it’s entirely possible to throw a sport extravaganza and still pay taxes. At the London 2012 Olympics, activists organized an online campaign pressuring Olympic corporate partners to forgo their tax breaks and, quite remarkably, it worked: 14 Olympic sponsors agreed to waive their tax-free status, and it became a bonanza for British taxpayers.
The problem of white-elephant stadiums cannot be solved overnight. Nor can the breathtaking corruption that ripples through Fifa. But balancing the books can happen right now, and especially beyond Russia in 2018 and Qatar in 2022. Already, the Brazilians have taken enough risks, and endured enough sorrow on the pitch and off. So have the birds.
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