ZURICH, Switzerland - World governing body FIFA plans to restructure its finances so it would be better prepared for the potential impact of terrorist attacks.
Speaking at FIFA's annual finance conference, general
secretary Urs Linsi said on Tuesday the organisation planned to
build up enough cash reserves to cover in advance the costs of
its flagship World Cup.
In the past, FIFA has used future World Cup revenues to
finance the three years leading up to the finals. It used
insurance policies to cover the possibility of cancellation.
Since the suicide attacks on the USA of September 11, 2001,
FIFA has been unable to find an insurer willing to provide full
cover.
As a short-term solution in 2003, the organisation issued
£150million worth of so-called "catastrophe bonds", effectively
using the financial markets to cover the risk.
FIFA said on Tuesday it had accumulated a surplus of £203million by the end of 2005 after posting an annual profit of £94.2million, an increase of £24.6million over 2004.
FIFA partly attributed the increase to a rise in the value
of the dollar.
It said it planned to convert its balance sheet into dollars
for the next four-year World Cup cycle (2007-2010) because the
currency accounts for the majority of its transactions.
According to the financial report, the staging of this
year's World Cup will cost FIFA a total of £383.5million.
FIFA President Joseph Blatter said: 'Having surpassed our target of equity
totalling 450million Swiss Francs (£198million) a year ahead of schedule, FIFA
has reinforced its financial standing and independence in line with the strategy
determined by the Executive Committee and the Finance Committee.
'This means that we can continue our wide-ranging development activities
after 2006 accordingly.'
General Secretary Urs Linsi added: 'Having sufficient equity, which FIFA
intends to add to in its next financial cycle by carefully managing its income,
is now an essential requirement because it is no longer possible to secure
cancellation insurance cover of the requisite magnitude for an event the size of
the FIFA World Cup.'
