FIFA plans to create a new commercial subsidiary worth $20 billion (about €17.5 billion) and sell a non-controlling minority stake to investors. World football’s governing body announced on Tuesday.
It called on its 211 member federations to support the plan, saying that if they voted in favor they would “immediately benefit from increased funding.”
As soon as the news broke, European football federation UEFA sharply criticized the plan, saying it “crosses a line that football’s governing institutions should never cross.”
The push comes soon after this summer’s World Cup, primarily held in the US, with FIFA enlisting a range of potential investors and advisors from the country. Infantino’s close relationship with US President Donald Trump had prompted criticism in some corners even before Tuesday’s announcement, which came a day after Infantino issued a fiery statement defending the tournament in the US and the controversies that have accompanied it.
What did FIFA say about the plan?
FIFA said it planned to establish “a new FIFA-owned and controlled subsidiary that will consolidate FIFA’s commercial and event operations”, which it will call FIFA Forward Enterprise, or FFE.
It said the company would be valued at $20 billion and that FFE would aim to raise up to $4.2 billion “this year” by “carefully selecting long-term investors who will purchase minority, non-controlling interests in FFE.”
FIFA claimed that “all FFE’s net profits will be invested back into football worldwide,” without clarifying what the “net profits” were, or what investors benefited from.
The statement said the FFE will be responsible for FIFA’s commercial rights such as broadcasting, sponsorship, ticketing and licensing contracts. By far the most valuable of these for FIFA are those associated with the World Cup, although other competitions such as the recently and controversially restarted FIFA Club World Cup also apply.
Ahead of this month’s World Cup final in New York, FIFA President Gianni Infantino told member associations he wanted to “highlight the commercial potential and opportunity” of the organization.
Infantino tried to portray the changes as an attempt to spread football funding more evenly and “democratize” the game, in a pitch specifically aimed at the less wealthy (and more numerous) football associations.
“As its global governing body, FIFA is responsible for ensuring that the game reaches every corner of the world, and the value it creates supports federations and communities everywhere. The next phase of our evolution requires a structure where the commercial side of the game operates as a focused, dedicated business, whose value is shared more and better around the world,” Infantino said in a FIFA press release.
“We intend to invest heavily in even the smallest or most remote parts of the football world, places that are often underserved,” Infantino said in support of the new investment plan, called the FIFA Fast Forward Programme, or FFFP.
How did UEFA react?
FIFA’s press release was published shortly after an article on the UK newspaper’s website many times – This was immediately followed by financial Times, bloomberg and others – began to attract international attention.
European football federation UEFA issued a sharp response online soon after the news broke.
“This crosses a line that football’s governing bodies should never cross,” it said. “UEFA takes this extremely seriously. So should every national football association. So should every stakeholder: leagues, clubs, players, supporters, governments and everyone who cares about the future of the game.”
UEFA stated that “the soul and governance of football are not assets to be traded – especially with zero transparency as to who gets the financial benefits.”
There have been repeated clashes between UEFA and FIFA in recent months and years under Infantino’s leadership, including over this summer’s World Cup.
UEFA argued, “None of us own football. It is not FIFA’s job to sell it.”
However, UEFA represents only a quarter of FIFA’s member associations, so its opposition is no guarantee of stopping the plan.
What do we know about the proposed investors and advisors?
FIFA said its structure would be similar to “other sports governing bodies with dedicated commercial subsidiaries” and said investors would be selected “based on clear long-term, governance and strategic criteria”.
It describes ideal investors as long-term partners who can contribute capital and commercial expertise to help FIFA achieve its goal of growing the game.
“Subject to these final agreements and the necessary approvals, Thrive Eternal, a permanent capital holding company, is expected to lead the proposed investor group for the FFE,” FIFA said, referring to the holding company set up this year by Joshua Kushner, brother of US President Donald Trump’s son-in-law and senior negotiator Jared Kushner.
Infantino’s relationship with Trump came under scrutiny more than once during the World Cup process – perhaps most notably when FIFA overturned the red card suspension of US striker Folarin Balogun before the loss against Belgium, and when Donald Trump was given the inaugural “FIFA Peace Prize” in a much-mocked event last December. This happened just weeks before the kidnapping of Venezuelan President Nicolas Maduro and then war with Iran.
FIFA also said that Greg Maffei, CEO of BANN Ventures and formerly CEO of Liberty Media during its acquisition and ownership of “Formula 1” motor racing, “has been a key commercial advisor and will continue to be involved in the establishment of FFE in this next phase.”
It said investment bank JP Morgan was engaged to work with FIFA, and Rome-based economic consulting firm OpenEconomics was also “engaging with potential long-term investors.”
FIFA said it was trying to establish a geographically diverse investor group and said it had received expressions of interest from every major region of the world.
Edited by: Jennifer Cimino Gonzalez
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