FIFA wants to sell share of World Cup to private investors: UEFA is not happy and here’s why
FIFA announced a controversial plan to sell shares in the World Cup to private investors on Tuesday, which UEFA quickly slammed as “a line football governing bodies should not cross.”
FIFA manager Gianni Infantino launched FIFA Forward Enterprise (FFE), a new entity that will oversee the commercial rights and delivery of operations for the $20 billion company with private investors including the Kushner family.
Here’s what you need to know.
The controversial FIFA system
FIFA announced the plan in a statement saying the immediate financial benefits around the world “will increase the development of football,” but the main point was the creation of a company that “combines FIFA’s commercial rights – including broadcasting, sponsorship, ticketing, and licensing – to deliver the performance of FIFA tournaments.” FIFA added that a consultation process has begun.
The proposal would require significant private sector investment, making it one of the most controversial aspects of the plan. The Times reported that Infantino is expected to be the commissioner of this new division, possibly after receiving what is expected to be a long term as FIFA president next year.
FIFA is seeking to raise up to $4.2 billion and has approached Josh Kushner’s Thrive Capital as one of the potential cornerstone investors, while JP Morgan is working with FIFA as a strategic partner in the project.
Josh Kushner is the brother of Jared Kushner, who is married to US president Donald Trump’s daughter Ivanka. All this comes after the president of the country United States agreed his involvement in the red tape of the overthrow of US men’s national team striker Folarin Balogun during the FIFA World Cup this summer..
FIFA says it will retain sole control of the organization, with “exclusive authority over the administration of football, competitions, the calendar of matches, and all regulatory and sporting decisions.”
According to FIFA, the goal is to increase and fund the development of football to more than ten billion dollars.
The proposal will be approved by FIFA’s 211 member associations, who will carry out a consultation process before any decision is taken. Alongside the FFE, FIFA also plans to launch the FIFA Fast Forward Program (FFFP), where all 211 members will be able to receive up to $20 million in one-off capital funding.
FIFA statement
In the same way as other sports governing bodies with dedicated commercial subsidiaries, FIFA will invite third parties to make small, non-controlling investments in the FFE.
Any such investors will be selected against a clear long-term process, governance, and strategic process. They will represent a geographically distributed group that reflects the global nature of the game, acting as a minority, long-term partner who can contribute capital and commercial expertise to support FIFA’s mission to grow the global game. FIFA will retain sole control of the FFE through multi-board representation and exclusive authority over football management, competitions, the calendar of international matches and all regulatory and sporting decisions.
Although FIFA has always created independent business subsidiaries, FIFA is now negotiating with MAs and the FIFA Council in this regard given its importance. In line with FIFA’s democratic processes, FIFA’s management will introduce a new structure only if a majority of MAs decide to support it, and approval of the necessary regulatory revisions by the FIFA Council.
Subject to these final agreements and necessary approvals, Thrive Eternal, a permanent capital management company, is expected to lead the proposed FFE investor group. Greg Maffei, CEO of BANN Ventures and former President and CEO of Liberty Media when it acquired ownership of Formula One, has been a key commercial advisor and will continue to be involved in the creation of FFE in this next phase.
As part of this initiative, JP Morgan is engaged to work with FIFA, while other consultants such as OpenEconomics are negotiating with potential long-term investors. The process focuses on bringing together a geographically diverse group of investors that reflect the global nature of FIFA and the game; Expressions of interest so far include investors from all major regions of the world: Europe, America, Asia and Africa.
The President of FIFA and the FIFA management have the responsibility to control the development of this project. Foreign investors will only have a small stake in the FFE and will not play an operational role. Equally, they invest in a FIFA subsidiary, not FIFA itself. For FIFA, nothing has changed.
UEFA statement
European football’s governing body reacted quickly to the news and wrote a strong statement against FIFA and Gianni Infantino:
This crosses a line that football governing bodies must never cross. UEFA takes it very seriously. So should the entire National Football Association. So should all stakeholders: leagues, clubs, players, fans, governments and everyone who cares about the future of the game. The soul and management of football are not commercial items — especially when there is no transparency as to who benefits financially.
None of us owns the ball. Not for FIFA to sell.
CBS Sports will have more on this story soon.
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