Insider reports suggest that FIFA is now readying concrete plans of action to create an emergency fund package worth hundreds of millions of dollars to assist the floundering global soccer scene, as the COVID-19 pandemic continues to wreak havoc on major sports leagues across the globe.
If the emergency fund package is approved, FIFA would be the first major sports authority to stage such a massive assistance effort toward alleviating the financial crunch felt by its members.
The widespread travel restrictions brought about by the coronavirus crisis has effectively stopped all cash flow in the soccer industry.
Many clubs shy away from long-term financial planning due to much of their income being tied up in player salaries and trading on the transfer market. The sudden onslaught of COVID-19 has strained the finances of many soccer leagues, clubs, and federations, many of whom have enacted drastic measures to stay afloat.
The suddenness of the pandemic has forced many to enact stopgap measures to quell the negative impact of a sudden stop to all major sports.
The seven-time Slovak champion MSK Zilina has already declared bankruptcy this week. Over 400 employees have been let go by the soccer federation of Uruguay, as no games are being played. Even some of the largest and richest clubs have not been immune. Juventus and Barcelona have resorted to cutting the salaries of their players and other teams are following their cue.
FIFA Fund to be Independent from FIFA Leadership
FIFA confirmed that its leaders are drawing up plans to help the struggling soccer community around the globe. Because of their strong finances, FIFA stated that it is their duty to help the soccer industry survive the COVID-19 pandemic.
FIFA’s last annual report in 2019 revealed that they have a $2.74 billion cash reserve. FIFA may choose to utilize some of these funds toward their emergency package, or borrow money with their future sponsorship and media income as collateral.
Final approval lies in the hands of the FIFA Council, a group comprised of 36 members: soccer officials drawn from six regional confederations. The fund could be used to offer bridging loans or emergency grants to ailing soccer clubs, federations, and leagues. The fund is slated to be managed by an independent body to insulate it from possible scandals or political intrigue.