Russia cuts 2018 World Cup budget amid economic recession
MOSCOW (AP) — Russia will cut the budget for hosting the 2018 World Cup as part of plans to slash state expenditure while recession looms, Sports Minister Vitaly Mutko said on Thursday.
The Russian government is cutting its spending by 10 percent across the board after the central bank predicted last month that the economy could contract 4.5 to 4.7 percent this year, under pressure from low oil prices and international sanctions.
Mutko, also a FIFA executive committee member, said in comments reported by the Tass news agency that World Cup stadiums and associated infrastructure would be exempt from the cuts. However, "various organizational issues" and "subsidies to the organizing committee" would be cut, he said, along with spending related to the draw ceremony.
Mutko did not provide specific figures, but suggested the cuts would also apply to the non-exempt areas of World Cup spending.
This month, FIFA President Sepp Blatter said he had been assured by President Vladimir Putin that economic problems would not affect the tournament, and FIFA told The Associated Press it was not worried by Mutko's announcement of cuts.
"We are not concerned that this will have any impact on the delivery of general infrastructure required for a successful staging of the 2018 FIFA World Cup," FIFA spokesman Olegs Sokols said in emailed comments.
In a statement issued to the AP, the organizing committee said, "This rationalization of federal funding will not affect key infrastructure essential for staging the tournament, like stadiums, training sites, and team base camps, public transportation, IT infrastructure, and safety and security measures."
Russia has already cut the capacity of two of its 12 World Cup stadiums from 45,000 to 35,000, citing financial and legacy reasons, but Mutko ruled out further shrinking of stadiums to save money, saying FIFA was unwilling to lose any more ticket revenue from hosting games in front of fewer fans.
"FIFA won't give us any more concessions, and all the stadiums should be 45,000-capacity," he said. "The ticketing program has started, it's economics, it's FIFA's earnings. The fact that they lowered two of the stadiums to 35,000 people for us; according to their projections, they already lost $60 million."
Mutko said the Industry and Trade Ministry was tasked with gathering World Cup contractors for meetings at which they were encouraged to lower the price of concrete for tournament-related projects.
According to government figures before Mutko's comments on Thursday, more than half of Russia's projected $9.6 billion World Cup spending will come from the federal government budget, with much of the remaining sum paid for by Russian regional authorities and state-owned companies.
At previous World Cups, FIFA has occasionally picked up the tab when the host nation's government has been unable or unwilling to fund certain aspects of the preparation. In the run-up to last year's tournament in Brazil, for example, FIFA covered a reported fee of $20 million to provide generators to power broadcast facilities.