European countries still expect to lose money at World Cup despite prize fund increase

European countries still expect to lose money at World Cup despite prize fund increase

A number of leading European countries still expect to lose money at the World Cup despite Fifa increasing the prize and participation fund by $112m (£82m) this week.

The main host federation, US Soccer, is also understood to be forecasting an operational loss on the tournament, although that will be more than offset by a projected $100m windfall from a revenue-sharing agreement from ticket sales with Fifa that will also benefit the two other co-hosts, Canada and Mexico.

The other big national associations will not have that advantage and sources at several say their costs this summer will still exceed Fifa’s payments.

Uefa had led the lobbying for increased funding, with the Fifa council responding by confirming it would increase the budget by 15% to $871m.

All 48 participating countries are guaranteed a minimum of $12.5m, up from $10.5m, but the round-by-round prize money has not increased and the remaining additional money will go to the teams in the form of extra subsidies for delegation costs and increased ticketing allocations.

Fifa opted to split the increased payouts equally rather than pegging them to performance, whereas the leading European nations had wanted a change in the distribution system to make it more merit-based.

An additional $2m is paid for reaching the last 32, then $4m more for getting to the last 16 and a further $4m for qualifying for the quarter-finals, with the biggest leap reserved for teams who finish fourth (another $8m), third ($10m), as runners-up ($14m) and as champions ($31m).

Under Fifa’s system, the larger FAs, such as England, France and Germany, will rack up bigger losses the further they progress owing to the high costs of travel, accommodation and varying tax rates in the United States, with even the significant prize money available for reaching the semi-finals, for example, offset by bonus liabilities to players.

The bigger European FAs will also travel with a far bigger entourage and backroom staff than Fifa is willing to subsidise, with its per-diem expense payments capped at 50 people, which includes each country’s 26-man playing squad.

Although at least one European FA is still unhappy with its lot, the overall mood among national associations at the Fifa congress in Vancouver was more sanguine and sympathetic towards Fifa.

“The payments are a fairly generous contribution towards operating expenses that should be able to fund a medium-sized association,” one executive told the Guardian. “If others chose to spend more then that’s up to them, and the cost of doing business. We were projecting to lose around $200 a day on each staff member under the initial allocation, but it has now been increased by $250 a day so we have some headroom. Others will be in a similar position.”

In the deal announced this week, Fifa also increased solidarity fees to the member associations who did not qualify, saying the enhanced payments reflect its financial strength.