Regional football confederations blindsided by FIFA’s US$20 billion investment plan

FIFA’s proposal to sell stakes in a US$20 billion (S$25.7 billion) commercial subsidiary has drawn strong criticism from football’s regional confederations, which said they were blindsided by the world governing body’s plan to bring private investors into the sport.

The Confederations of North America, Central America and the Caribbean (CONCACAF) and Asia (AFC), as well as European body UEFA, delivered stinging rebukes on July 29, saying they learnt of FIFA’s equity sale proposal through media reports rather than official channels.

FIFA said on July 28 that it plans to create a US$20 billion subsidiary to run the World Cup and its other events, offering stakes of up to 20 per cent in it to external investors.

Under the plan, FIFA would establish the FIFA Forward Enterprise (FFE) to oversee commercial and event operations.

FIFA, which from June 11 to July 19 held a 48-team World Cup across the US, Canada and Mexico that was the biggest in the quadrennial tournament’s history, would retain control of the enterprise, but offer minority stakes to private investors to raise up to US$4.2 billion.

The Times – which broke the original story on July 28 – reported FIFA president Gianni Infantino, 56, stood to profit from the scheme by becoming commissioner of the FFE after his expected next term expires in 2031. FIFA denied that this had been discussed.

The article also said discussion had started with financial advisers and potential investors.

Those include Thrive capital, an investment company founded and led by Joshua Kushner, brother of US President Donald Trump’s son-in-law Jared, as well as an arm of JP Morgan Chase, the US bank that attempted to finance the failed breakaway European Super League.

According to a source at JPMorgan, which is working with FIFA to bring in external investors, the bank has been fielding a lot of incoming calls and that “demand is off the charts” even before an official outreach began.

According to a proposal FIFA sent around to member associations, FIFA plans to begin formally soliciting investors through its Fast Forward Programme in August, with initial expressions of interest due in September and binding commitments expected in October as it targets completing the fundraising by the end of that month.

‘Lack of due process’

“CONCACAF was only made aware of this matter through media reports and, subsequently, via a media release. We are deeply concerned by the lack of due process,” it said in a statement.

“We share the disappointment of many within our region and the game that this level of detail has been designed and shared publicly before any discussion with the relevant governance bodies and stakeholders has taken place.

“As leaders within football, we are the custodians of the game. Collectively, FIFA, the confederations and every member association have a responsibility to always act in the best interests of the sport.

“Every decision we make must be guided by good governance, robust processes and long-term stewardship.”

Former FIFA President Sepp Blatter said the World Cup should not become an investment product for private equity with investors seeking returns.

“The FIFA World Cup is not a commercial asset that belongs to a handful of executives. It is part of the cultural heritage of world football,” Blatter told Reuters. “FIFA is the guardian of the World Cup, not its owner.”

Czech Football Association President David Trunda, however, said he saw “pragmatic benefits” from working with Infantino.

“Of course, we need more details, but my personal point of view is that I can see the positive impact of FIFA’s intentions,” Trunda told Sky News.

“I was elected a little more than a year ago. For me, personally, all the projects I have experienced in cooperation with FIFA have been very positive for the development of European football.”

AFC disappointed

The AFC said it recognised the importance of “exploring innovative approaches” but was disappointed that such a significant proposal was announced before the confederation had the opportunity to examine the plan.

“Such initiatives should be founded upon the principles of good governance, transparency and meaningful consultation,” it said.

“Decisions that may reshape the commercial and financial future of the game require comprehensive prior engagement with confederations, member associations and other relevant stakeholders before any proposal is made to the appropriate decision-making body(ies),” the AFC added.

Infantino’s deadline

The Times reported that Infantino had sent a letter to all member associations saying they would receive US$40 million each if they agreed to the proposal by Sept 19.

However, if they rejected the package totalling US$10 billion, which would be available from January 1, 2027, it would be reduced to the US$2.7 billion that was previously on offer.

Infantino added that the proposal would be implemented only if more than half of FIFA’s member associations participate by the deadline and the FIFA Council formally approves the necessary changes.

“Today we have learned of FIFA’s deadline to associations to support their proposals or have the one-off payout offer withdrawn. This says everything you need to know about this plan,” UEFA said in a statement.

“FIFA cannot continue to use our sport to enrich themselves and their friends. We can grow the game correctly. It’s time to prioritise associations, clubs, leagues, players and fans.”

While the AFC has 47 member associations, CONCACAF has 41. Together with UEFA’s 55 members, that brings the total to 143 of 211 member associations whose confederations either criticised the proposal or had concerns about it.

The Confederation of African Football (CAF) said on July 29 that its executive committee will meet next week to “evaluate” FIFA’s proposal. Reuters has contacted the confederations of South America (CONMEBOL), and Oceania (OFC) for comment.

Infantino, in video remarks provided by FIFA on July 29, said the idea to create a subsidiary to run the World Cup is simply a proposal that, if approved, would unlock uncaptured commercial value.

“It’s part of a democratic process – a consultation process – and, above all, it is an opportunity but not an obligation,” said Infantino while adding that the World Cup would always remain under FIFA’s control and without external interference.

‘Raises many questions’

The backlash also extended to individual country ruling bodies with French Football Federation chief Philippe Diallo saying his organisation had not been informed either.

“Given its direction – specifically, as I understand, bringing investment funds into a commercial entity alongside FIFA – it obviously raises many questions,” he said on French Inter radio station.

England’s Football Association (FA) said it was “completely unaware” of the proposal and had no substantive details.

“Based on the limited information, we are deeply concerned about the lack of process and governance to get to this point, and the apparent substance and principles involved,” it said.

FIFA’s move had provoked a furious response from UEFA, which accused world football’s governing body of putting the game’s “soul” up for sale.

A UEFA official said the idea of holding an emergency meeting to discuss FIFA’s proposal was put forward on July 28. Another source said virtual meetings were taking place on July 29 to talk about the situation. REUTERS, AFP