FIFA freeze World Cup bond fund raising plan

FIFA have frozen its World Cup bonds after the marketing rights to the finals in 2002 were hit the bankruptcy of its partner ISL.

FIFA wanted to raise nearly $200 million with the bond issue which has now been postponed until at least the end of the summer.

The bonds were intended to help with borrowing requirements needed to help finance the World Cup finals and the world governing body will now rely on funds raised by licensing its name and trademarks.

Borrowing requirements by FIFA could now be reduced.

FIFA axed the second edition of its World Club tournament last week after the bankruptcy of its marketing partner ISL. The Spanish competition had prize money of $40 million and FIFA has already promised to compensate the clubs for not taking part. That compensation though is likely to be a fraction of the prize money on offer for the title won last year by Sao Paolo club Corinthians.

FIFA under president Sepp Blatter was heavily involved with ISL whose parent company ISMM folded last week with debts of £280 million. FIFA could end up with a £40 million bill for its share of failed television and marketing contracts of which the World Club tournament was one.

FIFA may the same 12 clubs that had qualified for the 2001 event compete again in 2003, perhaps by playing the national champions that year. But such a messy and complicated system will be resisted by European clubs choking on the number of fixtures they play.

Blatter is seeking re-relection next year as FIFA president but if he loses the vote then the current World Club idea could be scrapped and revised.

The governing body have claimed that the problems that beset the World Club competition will not damage fnancing of the World Cup finals next year which are used to finance the FIFA operational costs on a four-year cycle that shadow the event.