Insta-FootPol. Is FIFA Selling the World Cup?

On Tuesday 28 July, FIFA posted plans to create a $20 billion commercial subsidiary, opening the door to outside investors taking minority stakes in the organisation's most valuable commercial assets, including the FIFA World Cup. In our latest Insta-FootPol Podcast episode, we unpack what the proposal actually involves, why UEFA and other critics are sounding the alarm, how it compares with the failed European Super League, and what it could mean for football governance, national associations, fans and the future commercialisation of the global game. Is this a once-in-a-generation opportunity to invest in football or the beginning of a fundamental shift in who the world's most popular sport ultimately serves? 

Transcript

SPEAKER_00 0:09

Hello and welcome to the latest edition of the Football Podcast. The podcast we're full of myths politics. I'm one of your co-hosts, Francesco Belcastro, and here with me is my other co-host, Guy Burton. Hello guy, how are you?

SPEAKER_01 0:21

I'm good, Francesco. How are you doing?

SPEAKER_00 0:23

I'm good. I'm good. So this is a special episode, isn't it? It's a it's an Insta football, as we call it. I called them.

SPEAKER_01 0:30

As you called it, you came up with the I came up with the idea. And I'm sorry to have dragged you off the beach from your your summer holiday already, Francesco, because we had already told the listeners that we were going off, didn't we? Last week we said let's do a recap of what happened with the World Cup and then we'll just reconvene in September. But then stuff happened, didn't it?

SPEAKER_00 0:49

Yeah, what happened? Like what um is so important that listeners should really be aware of?

SPEAKER_01 0:54

Well, yeah, I mean I thought we couldn't leave us. We I mean we are, as you mentioned at the outset, we are the podcast that where football meets politics. So when a story about FIFA wanting to sell part of its stake in the World Cup comes up, we have to talk about it. Just to sort of recap for people, um, just if they if they haven't already known, it came out sort of late on Monday evening that FIFA was talking about uh introducing a subsidiary uh that it wants to set up to enable um investors to buy a stake in future events uh related to various commercial um activities, whether it's broadcasting rights, sponsorship, ticketing, licensing, all of this to help uh it with the organization of it of events like the World Cup, but it would also be other ones. Um, FIFA has said had put this out in a statement uh late on Monday evening, as I said, um, outside investors would be welcome to buy minority non-controlling stakes, and that purportedly the whole value of this subsidiary, if it goes ahead, would be worth $20 billion with innit with initial uh capital raising of around 4.2 billion. Now, the interesting thing here is this that FIFA doesn't own a lot of, you know, it most of its revenue generation comes from events like the World Cup and really the Men's World Cup. That's where it gets its money. And because the World Cup is on a four-year cycle, it means that that money that it generates through that competition and the other associated ones has to get it through the four years for the next four years.

SPEAKER_00 2:29

Um just to give listeners an idea, uh the World Cup, the men's world cup on its own is about over 80% of the revenues of FIFA, isn't it? That that kind of scale of event compared to everything else that FIFA does is massive.

SPEAKER_01 2:42

And I think around and and and I think it was for the last for this World Cup that's just gone, they were to they were they thought that they they actually went beyond, they got over what they were expecting. I think they're estimating around 15 billion for the for this year. Now, what's interesting, what's interesting is as I said, they want to set up the subsidiary that's going to be worth 20, that could be worth 20 billion. Uh, what they think is that they can generate additional revenue through bringing in private actors, investors, uh into the mix. And so they've got um an idea that in the next cycle, basically between next year and 2030, with the next World Cup, they would generate $20 million. Sorry, I should explain this, that when you break down the value of the total amount, that what they can do is they can generate individual amounts for individual member associations. There's 211 member associations that make up FIFA. Right now, under the current uh uh cycle, uh those members are get basically an equal share of around $8 million a year from uh the generated generated revenue that through FIFA. What FIFA is saying is that with this new subsidiary, that they can increase the amount of revenue that goes to individual member associations from 8 million to 20 million uh from for the for the current site for the next cycle. And if it happens now, there's also like a bonus signing on of an additional 20 million. So think about it. You are a small, I don't know, islands nation, a small developing uh country with a developing football association, and you are offered an increase from 8 million to 20 million and plus another 20 million, this is going to be very, very attractive.

SPEAKER_00 4:18

Just for the listeners, guy, could you confirm that the people who are going to be managing this money at national federation level are exactly the same that in a short period of time will vote for the next FIFA president?

SPEAKER_01 4:34

Yes, exactly. Uh Giannu Infantino, the FIFA president, is due to stand for election again in March next year. So you can well, and and much of the way that FIFA operates and has operated, especially since Jean Havalange became president back in 1974, and then subsequently with the under the leadership of Seth Blatter and who who was resigned in disgrace back in 2015, the format, the model has always existed, which is effectively FIFA has tried to expand the World Cup to increase its commercial revenue, and through that money it generates for itself, it also generates for its member associations. So that money just gets funneled into member associations. And so here's another example of trying to increase the revenue of the very base that's going to vote for you.

SPEAKER_00 5:21

So why are people mentioning President Trump guy? Because I've heard a lot about uh, you know, whatever President Trump touches, he ruins. What why is he what does he have to do with that?

SPEAKER_01 5:32

Yeah, you're absolutely right to ask what is this connection with with Trump uh that's that's been talked about a little bit. Well, one of the one of the things that's been appearing is that, of course, as I've said, the the proposal is to invite private investment in. One of those potential investors is Thrive Capital, um, or Thrive Venture, which is owned by Joshua Kushner, who is the brother of Jared Kushner, who is Trump's son-in-law. Um, and so there's this link between it's it's just an additional link uh between Infantino and the Trump family. And one of the things that you have talked about over the over over the course of our uh of us doing this podcast is that relationship between Infantino and Trump. Um, there seems to be a mutual attraction, a sort of a sense of, you know, uh Infantino can in a way operates as a bit of a strong man within FIFA, and I think Trump quite likes that. Trump also sees himself as a bit of an of a strong man. There's there's mutual bromance going on in there, isn't there?

SPEAKER_00 6:30

Yeah. I think this is a one couple that uh we we think that football is about a lot, but this isn't this is the one couple we don't really condone on on the podcast. It is the one partnership that we're not really uh convinced about, isn't it?

SPEAKER_01 6:44

And I think it's also worth saying, I mean, because you bring up the sort of the the sort of the Trump connection here, I mean, uh there's obviously a lot of um in the in the in the press release that FIFA put out, there's not a lot I mean, there's talk about it's very upfront with the amount of money that's going to be created and then uh made available to member associations. But the details of what this subsidiary would actually look like in practice is very thin. Part of that is because uh FIFA is saying there is a consultation period, but you have to let us know by the 19th of September. So they want to move quickly on this to the member associations. But really, there's also a question here as to what would Infantino's role be within this, because way they what the way that they have set it, they've set it up, they're talking about it being investors having non-minority stakes, non-minor, non-minority rep involvement in this organization, which is set apart from what is actually a not for profit organization. FIFA is effectively a charity. And here we're talking about bringing private organizations into a separate organization that's connected to this charity. What would FIFA what would Infantino's relationship be? I mean, they have said that in their statement that FIFA would retain control of this, but you can well imagine that if Infantino was not to be re-elected or he eventually ends his presidential term, you know, if he gets elected next year and then uh uh ends it in in about four years' time, he could then move into this organ into this subsidiary, into this business as the CEO. And there would be very little accountability uh or means to control you know to put any kind of constraints on him. And of course, within that, it would be a private cut, it would be a private organization. Can you imagine? I mean, it's they've talked an awful lot about how much money can go to the member associations, they're not talking about how much money is going to go to the CEO and the people that work with for this organization.

SPEAKER_00 8:31

Yeah, yeah. And I mean, in fairness, not everyone has been happy, right? I think two things we could discuss. The first one it's uh who has opposed it, um, and for what reasons, and then perhaps we can talk a bit about the the sort of broader political impact. Yeah. So it seems to me that WEFA, so the European Confederation, listeners might be aware of the structure of FIFA or not. It's divided into uh regional confederations. They have a certain degree of autonomy, they they organize um regional tournaments, they they organize qualifications for for uh international tournaments. And crucially, UEFA, that is the European one, is seen as kind of almost as a counterpower to FIFA because it's the one that organizes the most prestigious tournaments and and where most of the where many of the most um prestigious national teams and and clubs are based. So UEFA has not been very happy with this, have they?

SPEAKER_01 9:28

No, and UEFA and FIFA have have history as well, going back a bit. I mean, you've pointed out to that they have the prestigious events like the Euros, but also the um most money-spinning ones in world football, like the Champions League. Yeah now, UEFA, because it's the European um confederation, it has 55 members. That's only that makes it only about a quarter of FIFA's 211 members uh associations. But even though it has only a quarter, as you've pointed out, it has significant economic weight, commercial weight. I mean, obviously they're not happy about this. They've been very annoyed in the last, if you recall the European suit the proposed European Super League that was that came out a few years ago uh by about 12 different clubs from England, Spain, Italy. Um, you know, there was some discussion as to whether FIFA was involved in those conversations with those clubs, and UEFA was very pissed off because it saw um, you know, FIFA meddling, but also trying to get a stake into uh the European game. Because as I've pointed out earlier on, FIFA doesn't have anything to generate revenue beyond the World Cups and its youth events and the women's World Cup. So it very much and so what so what you saw FIFA trying to do.

SPEAKER_00 10:40

Let's not forget this old discussion about the clubs World Cup, right?

SPEAKER_01 10:44

Yeah, the club World Cup, which was organized by FIFA, is FIFA's way to try and make an entry into the club game to generate more revenue. And that's obviously put the hackles up on UEFA, and then of course you've got the recent World Cup as well, where you know the uh the the sending off of Balugan, uh, you know, the American player, uh whose red card was then rescinded by FIFA with in a very opaque way just before the Belgium game. Uh UEFA was very, very stinging in that and sort of and was very critical about that. Um, you also recall as well that um the uh the the Americans had made it very difficult for a Somali referee to be able to come in and play and referee uh despite having been invited by FIFA. Um UEFA has actually taken that referee and invited him to uh referee their super cup competition. So, you know, a point a very subtle pointed dig at FIFA. Um but yeah, I mean in effect, you know, sort of as we said, so UEFA are not happy about this. So UEFA met on Wednesday to talk about what's what are the next steps. I think at this point, they're we we they're they're probably not gonna push the nuclear button yet. The nuclear button would have effectively be a boycott of FIFA, of uh not take of European country know member associations not taking part in FIFA events like the World Cup not taking part in the Club World Cup, um, you know, in effect pulling its economic weight out from under under under FIFA. I mean, I don't think we're at that point yet, but certainly it's interesting to see that UEFA is quite you know sort of agitated about this. And I think also, you know, the way that commentators are talking about this, this does seem to be sort of FIFA's uh European Super League moment, if you recall. Do you remember that from about four or five years ago when that was when that first happened? Uh do you remember how that actually sort of came about and how it ended?

SPEAKER_00 12:33

No, I don't exactly. Can you can you remind us and listeners what happened then?

SPEAKER_01 12:36

Yeah, so as I said, that the European Super League was was pitched, um, well, at least the most recent iteration, because it's been talked about in in various forms over the over the years. The last 30 years, yeah. Yeah, and we've even done an episode on it, so go go do check that one out. Um, but the most recent iteration of the European Super League had around 12 clubs um talking, you know, proposing to break away uh from the Champions League and set up their own Super League. Um at the time there was immediate reaction. I mean, UEFA obviously were opposed to this, uh, FIFA were a little bit more ambivalent, but then what we saw was uh criticism and rejection from fans, clubs, um, players, managers, and in a way that helped defeat the idea. It hasn't completely gone away, but it's it's but it and it also certainly it never and not only did it not go away because the company and the idea is still there, but UEFA even made concessions by reforming the model of the Champions League, yeah, so the one that we currently have now to encourage uh greater opportunities for the bigger clubs.

SPEAKER_00 13:42

It looks a bit guy like FIFA sort of testing the boundaries of how much fans can uh take in terms of uh um unpleasant changes, and this is relevant as well because football is incredibly popular, so there is pressure on governments um in several countries to do and say something about this. We have seen cases already in European countries of of high-profile politicians taking a quite significant stance.

SPEAKER_01 14:11

Well, the most yes, I'd say probably the most most visible one so far has been Andy Burnham, the new Prime Minister in the UK, who's talked about foot he's echoed very much what UEFA has said that football is not for sale, it's put it's for the fans. You know, um we are you know foot FIFA, UEFA organizations like this, they're the governing bodies, they should be the custodians of the game. But in terms of what um governments can do, I mean they can pretty pretty much just provide only moral authority at this point. Um you could, I suppose, further down the track, you know, if there was a question of competition, maybe the European Commissioner and the European courts could get involved. Um but I don't at this point, I don't think we're seeing very much beyond, you know, sort of just moral outrage from UEFA. And if we look at the other confederations as well, because you know, the African Federation Um and the Asian Football Confederation and CONCORCAF, which covers the Caribbean and North America, they have made statements, but this it's interesting that some commentators seem to see this as kind of the other confederations ganging up uh with UEFA. I don't see it as this. What's been interesting is if you read the statements, they say we're concerned about the lack of discussion, um, the lack of due process that's taken place. They haven't condemned it outright. And I think they also recognize that they can't because it's the member associations that make up the confederations that also make up FIFA that will have the final say.

SPEAKER_00 15:36

Yeah, and obviously for some of these um national federations, these, as you said, like that potential money makes uh makes a massive difference in terms of investments and in terms of what they will be able to do uh in the next few years to if one wants to be optimistic to grow their game in the in the game in their country, and if one wants to be a bit more cynical to distribute the money for their own purposes. So it does make a massive difference. So, guy, what are we gonna see next? What's gonna happen? What what should listeners look for at least?

SPEAKER_01 16:06

Yeah, I mean, before I aren't come to that point, can I also make a make a con this is why there is a concern about the the bringing in private uh interests into this, right? Because you're quite right to say that this could mean more money for the development of the game at the national level, amongst these national associations, if they were to use it genuinely and not you know sort of funnel it for corrupt purposes. But the question then becomes about these private investors. If you're gonna put money into this organization, you're not gonna do it for charitable reasons. You want to make money back. Yeah, you know, the nature of business is to make a profit. So that is going to mean you know they're going to want to have some kind of say in it. It's all very well FIFA saying, you know, we will retain control of this organization, but it's going to be very hard to see them do that without at least reflecting some of the interests of those private investors. And so those investors want to see more you know more money, more revenue, potentially more matches, more games, more commercial opportunities. Um, and so you could very well see um them putting pressure on FIFA to you know do things like we've seen with the hydration breaks. I mean, although that came from from the broadcast.

SPEAKER_00 17:14

Or potential further expansions of the of the of the side the size of the tournament. That could be another yeah. I mean, yeah, just one thing to note. I I think it's um it is interesting that Infantil himself was elected uh and his back when he was elected, his background was very much as a sort of manager within the sort of Europe UEFA uh uh path, and then uh obviously his basis of power has kind of shifted gradually. Um so there's obviously um there are obviously concern related to the fact that um listeners will remember that FIFA is just for 15 years out of uh not even 15 years out of a major scandal. Uh and infantino was in many ways elected as as the man that should have sort of cleaned the mess up and made made FIFA more transparent. That was his his own self-stated mission, so to speak, and and it seems like he's going uh uh far away from these um from this mission more and more every day. So I think there is a lot of distrust which is um even before looking at what is happening now, and and people are right to be to be concerned. I think whether WEFA's intentions are really whether Wefa wants to save the game or wants to have just a bigger piece of the cake, then I mean I'm I'm not really I don't know how you see it, but it seems to me that I I don't have too much hope into the structure altogether. Um FIFA might be slightly worse, but uh WEFA has got his own problems.

SPEAKER_01 18:41

So I think exactly. I think you know UEFA has its own interests with when it comes to commercialization of of the game as well. I mean it's it does help, of course, you know, who you're fighting against, right? And so you know if the if the image if the image of the person of the organization, in this case FIFA, uh just smells of opacity and tr lack of transparency and cozying up to authoritarians, it makes it makes you look good by comparison.

SPEAKER_00 19:07

Yeah, people are gonna be really angry about these. What can we do as football fans? Should we just stop watching football? Is there hope? What can people do?

SPEAKER_01 19:15

That's a good question. Well, I mean, well, first thing you could probably do is go and listen to our episode that we just did about two weeks or so ago, last week, actually, with Gabi Bracamonte, who was talking about reforming FIFA. There's a question as to whether you can actually reform FIFA. Um, but I think you asked me uh a little bit earlier as well as to what, so what happens what next? So this so currently this proposal apparently is under consultation until the 19th of September, which is when FIFA wants to hear from member associations whether to move forward with it or not. I think what what you know it maybe we should sort of propose a call for action here to to our listeners and please send this out to your friends, your neighbors, your associates, anyone that you know, if they care about football. For me, it's all very well to talk about you know just the moral uh turpitude here, that the you know, the sort of the the sort of the lack of moral consideration, but I don't think it's going to come to that. I think you need to very you know acknowledge that there is a very hard economic element to this question. Um, that it's going to that that the key players in this are the national associations. So you, as a listener who cares about football, contact your national association, contact the football association, contact the Scottish Football Association, contact the Football Association of Italy, contact whichever football association it is and tell them that you don't like this and you don't want this. Also, contact your club, contact your, you know, also there is a there is actually a campaign currently going on at the moment uh called Reboot FIFA, where they have a petition.

SPEAKER_00 20:45

Can I add another thing, guys? There are also several campaigns at national level. So listeners could check out online what is happening in their country and and join that particular campaign because you said national level is fundamental because that's the level at which so obviously international campaigns are very important. See what is happening at national level as well. That's uh that's another thing to do. Uh and then the other thing is let's select Guy Burton for fifth fifth the next FIFA president.

SPEAKER_01 21:10

Well, as you know, I am looking for a job, so I am available.

SPEAKER_00 21:14

Yeah, no, yeah, yeah, yeah.

SPEAKER_01 21:15

Remember your fr who your friends are, Guy, if you if we elect you as a you know that if I if if I was elected, then I wouldn't be able to do this anymore.

SPEAKER_00 21:22

So Yeah, then no, I'm sorry, I take that back. Priorities. Exactly.

SPEAKER_01 21:26

Anyway, listen, Francesco, sorry for interrupting you on your summer break and and dragging you, dragging you off the beach to discuss this.

SPEAKER_00 21:34

But I'm still not on holiday yet. I wouldn't answer after tomorrow afternoon. I'm I'm closing everything, closing my laptop tomorrow for a few days. So you are still on time. So let's let's wish listeners a good break if they're taking one. Um remind them that you know the good episodes they could listen, a lot of them relevant to this conversation, they could listen to in our uh catalogue. And we're gonna be back in uh September.

SPEAKER_01 21:58

Yeah, but for those who are in the in in Europe, don't forget the football season starts next week. I'll be off attending my first game.

SPEAKER_00 22:07

Okay, alright, yeah, forgot that. Yeah, starting very early in the UK.

SPEAKER_01 22:12

Well, Scotland has already started at non-league level, but yeah, correct. Difference between the World Cup ending and the next season starting is getting closer and closer.

SPEAKER_00 22:21

Yeah, yeah, yeah. It's gonna overlap eventually. All right, guys, thank you very much.

SPEAKER_01 22:25

No problem, take care, we'll speak again soon.

SPEAKER_00 22:27

Speak to you later, bye bye, bye, bye.

SPEAKER_01 22:28

Bye.