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FIFA pitches money spinning World Club championship

Representatives of seven of the world’s richest soccer teams, including Manchester United, Barcelona and Real Madrid, visited FIFA recently for a private meeting aimed at winning the clubs in the increasingly fractious battle to set up a new multibillion-dollar world club championship.
The group also included the English champion Manchester City, Italy’s Juventus, France’s Paris Saint-Germain and the perennial German champion Bayern Munich.
The seven clubs invited to the meeting had combined revenues of more than $4 billion in 2017, and they command a massive global fan base that would be critical to making FIFA’s secretive discussions about the new tournament, code-named “Project Trophy,” a success.
They met one day after the president of UEFA, AleksanderCeferin, wrote to FIFA’s president, Gianni Infantino, questioning the wisdom of selling an expanded version of FIFA’s annual Club World Cup to a consortium led by Japan’s SoftBank, which runs the world’s largest technology investment fund. Saudi Arabia and the United Arab Emirates are among the fund’s biggest backers.
Infantino and FIFA have been guarded over key aspects of the negotiations. Citing a nondisclosure agreement, Infantino has yet to disclose the identity of the bidders to even FIFA’s governing board. He has revealed little beyond describing the group as among the “most solid” in the world. The consortium has told Infantino it is willing to invest up to $25 billion for the rights to co-own the proposed 24-team club tournament and a separate world league for national teams.
Details of SoftBank’s involvement have not been confirmed by FIFA, and the company has not commented on whether it is involved. But the mere proposal of a new competition involving the world’s top clubs has exacerbated long simmering acrimony between FIFA and UEFA, the European soccer governing body, over primacy in soccer.
While FIFA owns the World Cup, the sport’s most-watched event, UEFA is considerably richer thanks to its control over the hugely popular Champions League. The annual competition for clubs allows UEFA to collect $15 billion in revenue over a four-year cycle, or almost three times more than FIFA brings in during the same time.
FIFA’s talks with a handful of elite clubs could threaten the harmony among members of the European Club Association, which has a membership of more than 200 teams. Liverpool, a Champions League finalist this year; Roma, the team Liverpool vanquished in the semifinals; and Arsenal, whose chairman, Ivan Gazidis, sits on the E.C.A.’s board, were among the powerful teams not involved in Wednesday’s discussions.
FIFA said in a statement that the E.C.A. remains a part of the consultation process, though FIFA acknowledged that it also is meeting with different groups, including individual clubs, leagues and players, to “gather the different viewpoints and extend the debate.”
“Today’s meeting allowed us to observe a real interest for a complete reform of the Club World Cup and the development of a new model of competition that would benefit the entire football community around the world,” FIFA said.
The finances underpinning the project, though, may not produce the headline grabbing $25 billion windfall to FIFA that has been widely circulated.
In initial talks, the consortium that made the offer, which also includes the London-based investment firm Centricus Partners, said it would invest the maximum amount of money only if it hits its revenue targets over a series of four-year periods between 2021 and 2033. The investors would have the right to walk away at the end of each period if returns failed to match expectations.
On the other hand, the consortium, in which FIFA would hold a 51 percent stake, would have the right to renew its agreements in perpetuity at a rate of 120 percent of the previous agreements should the tournaments prove to be successful.
In the current proposal, the investors would guarantee FIFA $3 billion for each quadrennial Club World Cup. It will pay $2 billion for each edition of the biennial world league, with the exception of the first competition, which will produce a payment of only $1 billion.
In his letter sent to Infantino on behalf of UEFA, and copied to other European soccer officials, Ceferin raised several concerns about the concept, including the continued secrecy about the identities of those backing the fund. He also questioned the impact of the changes on soccer’s increasingly busy global calendar and the economics behind the offer. Significantly, Ceferin’s letter also warned FIFA against losing control of the sport to a commercial entity.
When Infantino first revealed the proposal at a FIFA board meeting in March, he said the deal had to be concluded in 60 days. But members refused to give him their backing, citing the mysterious nature of the offer and other concerns. The opposition has grown in the months since.
On Tuesday, an umbrella organization called the World Leagues Forum, which is led by the Premier League’s executive chairman, Richard Scudamore, issued a warning to FIFA, saying that the Forum’s steering committee “agreed that plans for extending any competitions which impact negatively upon the already congested match calendar will be vigorously opposed.”
The group also said it would resist any change that affected competitive balance in domestic competitions. Under the proposals for the expanded Club World Cup, 75 percent of the total revenue, more than $2 billion per tournament, would be distributed to the competing clubs. Critics say that would make already wealthy teams even more powerful in the player acquisition market and solidify their dominance over domestic rivals.
The post FIFA pitches money spinning World Club championship appeared first on BusinessDay : News you can trust .

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