July 29 (Reuters) – FIFA’s proposal to sell stakes in a $20 billion commercial subsidiary has drawn strong criticism from soccer’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% 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 U.S., Canada and Mexico that was the biggest in the tournament’s history, 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.
‘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 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 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 $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, it would be reduced to the $2.7 billion that was previously on offer.
Infantino added that the proposal would only be implemented 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 Wednesday 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 Wednesday, 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,” the FA said.
FIFA’s move had provoked a furious response from UEFA, which accused world soccer’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 Tuesday. Another source said virtual meetings were taking place on Wednesday to talk about the situation.
(Reporting by Aadi Nair, Rohith Nair, Elvira Pollina, Inti Landauro, Frank Pingue and Nupur Anand; Editing by Andrew Heavens, Ed Osmond and Pritha Sarkar)
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