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Troubled times at FIFA

FIFA vice presidents
FIFA Vice Presidents Issa Hayatou (L) of Cameroon, and Chung Mong-joon of South Korea (R)  

By Andrew Demaria

SEOUL, South Korea (CNN) -- FIFA, world football's governing body, is not well.

For delegates in Seoul for FIFA's Congress, which concluded two days ahead of the 2002 World Cup in Japan and South Korea, it should be a happy time.

Terms like "crisis point", "corruption" and "precarious financial situation" have been bantered around by delegates and have kept football barely on the agenda.

Instead, the 202 members attending the FIFA meet have been bogged down by heavy financial concerns, political powerplays and a presidential vote that has been nothing short of spectacularly acrimonious.

Strange, given also that football has never been so big, so popular or so wealthy.

Much of the heat has been firmly directed at FIFA head, Sepp Blatter, who on Wednesday won another four years as president.

After his win, Blatter called on FIFA members to unite to restore harmony and rebuild FIFA's tarnished reputation.

But whether his reelection would be enough to close the books on allegations of financial mismanagement, bribery and corruption during his four-year term as chief remains to be seen.

Blatter has been under intense pressure to reveal the state of FIFA's finances, and has been accused of bringing the head of the world's most populous sport to the brink of financial ruin.

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The most hard-hitting allegations have come from Blatter's right-hand man, FIFA general secretary Michel Zen-Ruffinen.

In May, Zen-Ruffinen delivered a 30-page document to FIFA's executive committee which accused Blatter of financial mismanagement, of manipulating FIFA to benefit third parties or other personal interests, and of charges that "may constitute criminal offenses."

That report -- whose contents have been strongly denied by Blatter -- sparked legal action against the FIFA president by 11 executive committee members.

In his defense, Blatter says the allegations were part of a "smear campaign" designed to thwart his re-election bid.

Blatter also disputes a claim in Zen-Ruffinen's report that FIFA was being run like a dictatorship, saying that positive aspects of his time in office have been ignored, particularly his efforts in spreading football and increasing infrastructure throughout the world.

"The game is now universal. Twenty-five years ago it was only for two continents, now it is universal. We have spoken such a lot about problems, why have we not spoken about the realizations under my presidency," Blatter said in Seoul prior to his re-election.

Yet, simply that there are problems is problem enough and not reflective of the image of fair-play that football's governing body is so desperate to present.

Financial worries

More troubling perhaps is FIFA's financial health, which has been the source of fiery debate during the congress.

It seems that no one has been able to provide an accurate picture of FIFA's financial situation.

Though there have been a number of audits, a recent internal investigation to look into FIFA's finances in the wake of a $300 million collapse of its long-time marketing partner was canned by Blatter who claimed there had been a breach of confidentiality clauses.

The demise of the company, International Sport and Leisure, last year left what Blatter says is a $32 million hole in FIFA's finances, but Zen-Ruffinen claims the figure is more like $112 million.

Regardless, what is clear is that FIFA is operating in the red and has been since 1999. But this is not that unusual as it often relies on the quadrennial World Cup to boost its coffers.

Speaking at the congress on Wednesday Blatter critic, David Will, a vice-president who heads FIFA's internal audit committee, told delegates that FIFA was experiencing a "precarious financial situation" and it was "lucky" FIFA was listed in Zurich as an association.

"It is only because of this that we haven't gone before court in Switzerland and declared ourselves insolvent," he said.

Hill said that an audit by KMPG predicted that FIFA would remain in negative equity until 2006. The current figure is minus $300 million.

FIFA has even borrowed more than $400 million against target revenue of the 2006 World Cup to assist with a current cash shortfall.

As Blatter put it on Wednesday, "We have borrowed money from 2006 to keep us alive to the end of 2002."


Joseph S. Blatter
Joseph S. Blatter of Switzerland was re-elected as FIFA president Wednesday  

Which leads some, like Adam Crozier, England's Football Association chief executive, to be wary about FIFA's financial future.

He told the congress on Wednesday that budget spending cuts of $635 million is unlikely to be met, making "future budget cuts unrealistic."

Crozier also questioned the target revenue from television rights, saying that there are indications that broadcasters may not be as willing to fork out the same sorts of amounts as they have in the past.

Television and sponsorship rights have soared since the 1998 World Cup. FIFA says it received $79 million for those rights in 1998 and believes it will increase almost ten fold to $761 for the 2002 tournament.

FIFA also estimates that the sale of licensed merchandise will bring in more than the $1.2 billion in 1998.

These sorts of figures show how fat FIFA has grown and how reliant it is on the World Cup.

But observers say FIFA may have become too large and is being run too much like a gentleman's club.

They also add that the wrangling within FIFA is far from over despite Blatter's re-election.

The fissures within the football body seem much too deep to be smoothed over immediately.

Add to this, criminal charges against Blatter may also be pending soon, while the internal audit committee reports on its findings at the end of this year.

All of which could create major headaches for Blatter.

Sensing tough times ahead, the FIFA boss has already begun to ring in the changes. The budget will be presented and approved on an annual, not quadrennial basis.

Elections would be held on year's other than the World Cup and the internal audit committee will have a functional viable role, Blatter said on Wednesday.

But is it enough to buff up FIFA's public image?

All the politicking around the election has done little to impress the football-going public.

Unless FIFA can clean up its act soon, it risks losing its greatest asset, the fans.



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