Now we know. The 2010 World Cup can be shown in Singapore if Fifa is paid six and a half times as much as SingTel's five senior executives and board of directors were paid in the last financial year.
That's right. Fifa is asking for nearly 100 million Singapore dollars (about $72 million), reports the Straits Times.
Five senior SingTel executives were paid a total of more than 10 million Singapore dollars in the financial year ended March 31, 2009.
SingTel also paid more than 5.2 million Singapore dollars in directors' remunerations, according to its annual report.
That's a total of more than 15 million Singapore dollars paid to 17 people for the whole year.
Fifa wants nearly 100 million Singapore dollars for the month-long World Cup starting in June.
"Fifa has been asking for an unreasonable amount," said SingTel CEO Allen Lew.
"SingTel is financially responsible to its shareholders. And we have doubts whether Singaporeans are willing to pay so much."
True, if SingTel wants to pass the entire cost to subscribers, they might baulk.
But is Fifa being unreasonable?
It must have an idea of what SingTel can and cannot afford.
SingTel group's (SingTel and Optus) operating revenue rose 5.4 per cent to 4.1 billion Singapore dollars in the second quarter ended September 30, 2009.
Underlying net profit was up 19 per cent to 952 million Singapore dollars, adds the SingTel report.
So can SingTel afford to pay 100 million Singapore dollars for the World Cup?
That's more than 10 per cent of its second quarter profit.
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Doesn’t it depend on whether the marginal profit of showing the world cup is positive? If so, then pay and show it ( and in so doing recoup the money from advertising if possible.) If not, Singtel would not be meeting its fiduciary obligations by intentionally losing money.
You are right. But, as I mentioned in my post, 100 million Singapore dollars is just over 10 per cent of SingTel’s second quarter profit.