I have been delving further into the detail of FIFA’s new Club Protection Programme (CPP), the scheme designed to remove a longstanding bone of contention by compensating clubs when players they employ are injured on international duty.
I was concerned lest an unforeseen spate of injuries sent costs soaring to the point where they absorbed most or all of FIFA’s positive annual result. This stood at $89 million in 2012.
The world football governing body has now told me that they have moved to protect themselves against unexpectedly high costs.
As a result of this it estimates that the overall cost of CPP to FIFA between the scheme’s starting-point in 2012 until it ends on 31 December 2014 will be around $100 million.
The cost for those initial 2012 months, plus the Olympic football tournament, which was also covered, was put in FIFA’s financial report at $18.368 million.
So that suggests a cost of some $40 million a year for this year and next. FIFA says though that the $100 million overall estimate includes “a reserve for uncertainties”.
With FIFA pleading confidentiality over certain details, I still don’t feel completely confident in my understanding of how the programme will work. However, with the insurance cover, FIFA describes the risk that its costs may ultimately exceed around $100 million as “very low”.
The governing body also told me that both it and the insurance company – which it said was HDI-Gerling – had “separately estimated” what the costs associated with CPP might be by “analysing previous years’ injuries and costs related to those injuries in international matches”.
FIFA’s technical bulletin on CPP also explains that the programme has an “aggregate limit” of €70 million per annum in both 2013 and 2014, although this relates to payments that might be received by clubs rather than costs that might be incurred by FIFA.
As previously reported, the temporary total disablement of a player hurt on international duty can trigger CPP payments capped at €7.5 million per claim.
The amount insured is the player’s annual fixed salary, with a maximum daily amount of €20,548 for a maximum period of 365 days.
The first 28 days of disablement will not be covered.
A UK-based company called Broadspire is identified in the technical bulletin as the entity that will “perform the claims handling directly with football clubs”.
FIFA also told me that the programme worked “on the basis of a fee per match” and that there were different fees for different types of matches. When I asked if this meant that FIFA paid the insurance company a fee for each match included in the CPP, however, it said it was unable to provide more information.
According to figures which FIFA did supply, there was an average of just over 900 international ‘A’ matches per year played over the 2009-12 period.
If this number is similar in 2013 and 2014, and if the cost of CPP to FIFA is around $40 million a year all-in over this period, the effective cost per match would weigh in at around $45,000. This remains for the moment very much a back-of-envelope assessment, however.
Finally, asked why the present programme ended in 2014 and whether the intention was to extend it, FIFA replied that its budget was established on a four-year cycle. Furthermore, this was a “learning phase” for both FIFA and the insurance company. “We are seeing what works well and what might need to be modified in the future.”
It said if the programme was working well, “then it could be that it will again be implemented for the next cycle”.
I await with interest the next update on how the experiment is progressing, probably in FIFA’s 2013 financial report.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938