By all accounts, the FIFA World Cup, which recently concluded with Spain’s 1-0 Victory over Argentina, was a colossal success. Yes, we had the “hydration break” drama, reversed red cards, along with steep ticket, parking, and transportation costs. But the football was excellent, and the expanded field created opportunities for countries that had never dreamed of inclusion in this quadrennial event.
Then, with one wave of his wand, Gianni Infantino flushed all that had been gained right down the toilet with his plan to “spin off” the commercial aspects of FIFA’s showcase event, the World Cup, along with its other competitions. Three days later, with much of the damage already done, Infantino did a 180-degree turn and announced the proposed plan had been shelved.
How could someone so steeped in the politics of sport, like Infantino, make a mistake of such colossal proportions a few short weeks after sitting on top of the sporting world? Could it be the allure of a personal payoff, or a belief that this is truly the best way for FIFA to move forward?
In either case, the reaction from those within the FIFA organization and its various Federations, including the powerful UEFA and CONCACAF, was swift and damning of Infantino and those associated with the plan. UEFA’s statement encapsulates the opposition’s position: “The moment external investors acquire ownership interests in FIFA competitions, football changes forever. Commercial return becomes a permanent obligation. Investor expectations become a daily pressure.”
Let’s take a look at the planned structure of the FIFA spin-off, how it would likely have operated, and what lessons could be learned by those in the U.S. facing similar structural proposals within their organizations (think college sports).
Infantino’s plan…I’m reluctant to call it FIFA’s plan, as many within the organization supposedly had no idea the proposed plan existed…was to split off the revenue side of FIFA by creating an entity called FIFA Forward Enterprise (FFE) and sell 20% of that entity to investors at a valuation of $20 billion. This would create an immediate $800 million cash infusion to FIFA. Josh Kushner’s Thrive Capital was rumored to be a leading investor.
Post spin, you would basically have FIFA operate the competition aspect of the organization, and FFE the commercial side of the entity. FFE would be responsible for all revenue streams, including television rights, sponsorship, and ticketing. The plan was purported to generate an extra $40 million for each of FIFA’s 211 Federations over the next four years, and multiples of that amount in subsequent years.
FIFA distributions are the lifeblood of most soccer federations worldwide. Many are mostly concerned about when and how much the next check will be, rather than whether there is private investment in FIFA. But this plan seems to have, at least for now, curried widespread and very vocal opposition.
The College Sports Parallel
College Sports and FIFA are facing similar pressures. On the collegiate side, control has always been somewhat decentralized through the conference structure, with the NCAA handling certain functions from a centralized perch (think enforcement and March Madness). FIFA, on the other hand, is a very centralized organization with many federations, both large and small, spread throughout the world.
Organizations, whether the NCAA, conferences, or FIFA, want to preserve some level of control. The question becomes: will outside forces, be they judicial, legislative, or economic, allow the organizations to preserve their desired levels of control? Will they be able to move seamlessly into mandated or economically required structural changes that allow for monetization of the commercial elements needed to fund their respective members?
As the Protect College Sports Act works its way through the inevitable “sausage factory” process in Washington, D.C., those are relevant points to keep in mind.
Infantino’s Miscalculation
Understanding in advance how an operational or structural change of this magnitude is likely to be received is incumbent on the organization’s leader. In this case, Infantino failed. With the coming March FIFA leadership vote, Infantino’s reelection seems to be less of a sure thing.
Whether the FIFA plan was leaked or just being floated as a trial balloon, Infantino should have had a better handle on the folks in his “room”. Especially the responses of the most powerful of the FIFA Federations. Their response to the plan not only leaves Infantino with a huge black eye but could also spur a candidate to mount a “for the love of the game” campaign to replace him in the upcoming FIFA elections.
That’s what happens when you misread the room and score an own goal in the same game. The only question is if he will get a red card as well.
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Bob Thompson entered the television business in 1981, when he sold his first cable subscription to a nice lady in Aloha, Oregon. After eight years in cable marketing and ad sales, he moved to Liberty Sports’ RSN group as VP/GM of Prime Sports Network in Denver. Liberty Sports was later sold to Fox, where he rose to President of Fox Sports Networks and Fox Sports International. He stepped down from full-time work at Fox Sports in 2009 but remained an advisor through 2015. He continues to work in the industry through his consulting firm, Thompson Sports Group, LLC.
