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

FIFA’s proposal to sell stakes in a $20 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) delivered stinging rebukes on Wednesday, saying they learned of FIFA’s equity sale proposal through media reports rather than official channels.

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

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

FIFA, which this year held a 48-team World Cup across the United States, Canada and Mexico, would retain control of the enterprise but offer minority stakes to private investors to raise up to $4.2 billion.

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 to member associations, the governing body 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,” the confederation 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 also criticised the proposal, saying the World Cup should not become an investment product for private equity firms 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” in working with FIFA president Gianni 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 it.

“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 written to all member associations, saying they would receive $40 million each if they agreed to the proposal by September 19.

However, if they rejected the package totalling $10 billion, which would be available from January 1 next year, the amount would revert to the previously announced $2.7 billion.

Infantino added that the proposal would only be implemented if more than half of FIFA’s member associations supported it by the deadline and the FIFA Council formally approved 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 and CONCACAF has 41, together with UEFA’s 55 members, the three confederations account for 143 of FIFA’s 211 member associations.

The Confederation of African Football (CAF) said on Wednesday that its Executive Committee would meet next week to evaluate FIFA’s proposal. Reuters has contacted the South American confederation (CONMEBOL) and the Oceania Football Confederation (OFC) for comment.

Infantino, in video remarks provided by FIFA, said the idea to create a subsidiary to run the World Cup was simply a proposal that, if approved, would unlock previously untapped commercial value.

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

‘Raises many questions’

The backlash also extended to national football associations.

French Football Federation president Philippe Diallo said his organisation had not been informed of the proposal.

“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.

England’s Football Association said it was “completely unaware” of the proposal and had received 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,” the FA said.

FIFA’s proposal had already provoked a strong response from UEFA, which accused the 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 Tuesday, while another source said virtual meetings were taking place on Wednesday to discuss the situation.

Credit: Reuters