- Fifa appears set to earn $300m media-rights bonus if 2026 World Cup is hosted in North America
- Bonuses would create clear conflict of interest for Fifa in 2026 hosting decision
- Questions remain over why Fifa sold World Cup rights in South and Central America so early
On April 10, at New York’s One World Trade Center, the US, Mexico and Canada unveiled a joint bid to host the 2026 Fifa World Cup.
With Europe and Asia ineligible due to their more recent hosting of the tournament, the North American trio were quickly installed as favourites.
Chile is looking at leading a rival bid from Latin America. Fifa will make a final decision in May 2020, at the latest.
A successful North American bid would be welcomed by the media companies in those three territories, and neighbouring countries, which hold the rights.
Their ratings – and advertising revenues – would go through the roof because of increased local interest and a favourable time zone.
The windfall for broadcasters will be boosted further by Fifa’s expansion of the competition from 32 to 48 teams, increasing the number of matches from 64 to 80.
Rights-holders for 2026 include Fox and Telemundo in the US, Globo in Brazil, Bell Media in Canada, Televisa in Mexico and Torneos in Argentina, Uruguay and Paraguay.
It is still unclear how many markets the 2026 rights have been sold in across the Americas, but it may be as many as 17.
According to the Bloomberg news agency, three of those companies – Fox, Telemundo and Bell – will be required to pay bonuses totalling $300m (€269m) if the North American bid gets the nod.
This would create an evident conflict of interest for Fifa. Given the controversy which has surrounded the way in which the 2022 World Cup was awarded to Qatar, it is astonishing that the governing body should have put itself in such a situation.
As a senior official at one European football federation put it this week: “The conflict of interest is pretty clear, especially if the contracts for broadcasters across other regions, such as Latin America, don’t contain similar bonus clauses.”
The deals agreed across Latin America don’t contain any such bonuses for Fifa. The way in which Fifa sold the rights across the two continents was very different, driven by very different sets of circumstances.
Why did Fifa sell rights 20 years before the World Cup?
In December 2016, the US Department of Justice (DoJ) published the terms of its settlement with Torneos for the latter’s involvement in the corruption scandal which erupted with the FBI-ordered arrests of senior football officials in Zurich in May 2015.
As part of the settlement, Torneos paid the US authorities $112.8m, of which $89m was a forfeit of profits and $23.76m a penalty.
The DoJ document revealed details about Fifa’s media-rights sales which had not been known until that moment.
At some point between 2010 and 2013, Fifa sold its rights for the World Cups of 2018, 2022, 2026 and 2030 in multiple territories across the Americas in what appear to have been three or four separate deals.
Image: The US last hosted the World Cup in 1994 (Getty Images)
The amount Fifa earned is not stated by the DoJ but in its Financial Report for 2016, published in May this year, Fifa says it has “revenue from unsatisfied performance obligations at 31 December 2016, which are expected to be recognised in the cycles ending in 2022, 2026 and 2030”, amounting to $5.208bn.
In Brazil, media group Globo acquired rights to all four tournaments in a deal worth about $1.2bn. It is thought the deal breaks down as follows: 2018 – $250m; 2022 – $280m; 2026 – $320m; 2030 – $360m.
The rights in Argentina, Mexico and possibly 14 other Latin American markets were acquired by Mountrigi Management, a Swiss-based subsidiary of Mexican media group Televisa.
It is not known what they paid for 2026 and 2030. For 2018 and 2022, Mountrigi paid about $190m for rights across Latin America, excluding Brazil. Mountrigi sold on the rights for the 2018 and 2022 World Cups to broadcasters in each of those markets.
Pan-regional pay-television operator DirecTV – the US-based company with a 40-per-cent stake in Torneos – acquired pay-television rights across the region from Mountrigi for $100m. Torneos, which has rebranded from its original name Torneos y Competencias, acquired the rights in Argentina, Paraguay and Uruguay.
The DoJ said that during proceedings the following had been accepted as fact by Torneos: “In or about and between 2010 and 2013, Torneos’ wholly-owned subsidiary Torneos International B.V. obtained the rights to broadcast the 2018, 2022, 2026, and 2030 editions of the World Cup to audiences in Argentina, Uruguay, and Paraguay through a series of contracts with the Off-the-Books Companies and Broadcasting Company Affiliate A, which had secured the rights to broadcast the tournaments in these and other territories directly from Fifa.
“Torneos, through [former chief executive] Alejandro Burzaco and others, and at times with the assistance of one or more representatives of Broadcasting Company Affiliate A, including Broadcasting Company Executive #1, agreed to pay and did pay millions of dollars in bribe and kickback payments to Soccer Official #l – a high-ranking Fifa official who exercised enormous influence within the association – in order to secure his support for Broadcasting Company Affiliate A’s acquisition of rights to broadcast the 2018, 2022, 2026, and 2030 editions of the World Cup in certain territories, and the subsequent purchase and exploitation of certain of those rights by Torneos International B.V.
“Among other things, Soccer Official #l agreed to use and did use his influence to push Fifa to sell the rights to broadcast the 2026 and 2030 editions of the World Cup in certain Latin American territories to Broadcasting company Affiliate A in 2013, earlier than anticipated and long before the selection of host countries for those editions of the tournament.”
After the release of the documents, Reuters identified Mountrigi as Broadcasting Company Affiliate A. Fifa’s website appears to confirm this: Mountrigi is listed as Fifa’s licensor in the relevant markets.
Televisa, Mountrigi’s owner, told media in December neither it nor any of its subsidiaries had acted improperly in securing rights from Fifa. Neither Mountrigi nor Televisa has so far been charged with wrongdoing.
Selling these rights so early – up to 20 years before the tournament takes place in the case of the 2030 World Cup – was completely out of step with Fifa’s traditional sales strategy.
Fifa has projected increased commercial revenues in 2026 of about €600m compared to the 2018 competition, including an extra €480m from media rights. Yet doing deals so early across the Americas has left it unable to benefit from either the North American hosting or the expansion of the competition.
Fifa cannot argue that the offers made for the rights between 2010 and 2013 were too big to turn down. The amounts involved simply don’t support that argument.
In the Foreword to the 2016 Financial Report, new president Gianni Infantino says that since the implementation of its reform programme, Fifa is now “employing a responsible and transparent way of managing revenue and expenditure”.
He added: “Strict control of the money that flows into and out of Fifa was one of the focal points of the reforms. It had to be. The principle is now a simple one: every single cent that comes into or goes out of the organisation has to be well documented.”
The governing body had not responded to questions from SportBusiness International on these rights sales by the time of publication.
Fox threats force more early deals
In February 2015, Fifa agreed highly controversial deals for the 2026 rights with Fox Sports and NBC-owned Telemundo in the US and Bell Media in Canada.
The deals came in response to Fox complaints about Fifa shifting the 2022 World Cup in Qatar to the winter and helped the governing body stave off a potential lawsuit from the company.
A furious Fox pointed out that its $425m investment for the English-language rights to the 2018 and 2022 events had been based on the World Cups taking place in the summer, “as they have since the 1930s”. It would “not countenance” a World Cup being played in November or December. Telemundo had paid $600m for the Spanish language-rights to 2018 and 2022.
Image: North American broadcasters would welcome a World Cup played in their time zone (Getty Images)
In private talks, without putting the rights out to market, Fifa agreed the deals which placated Fox. For 2026, according to Bloomberg, Fox agreed to pay $300m, with a $180m bonus if the US ended up hosting.
Telemundo paid $350m, with a bonus of $115m. Bell Media, which owns commercial network CTV and pay-television network TSN in Canada, agreed to pay $41m and a $5m bonus if World Cup games were played in Canada.
Under the terms of the joint bid, 60 games will be played in the US, with 10 each in Mexico and Canada.
Staying out of the US courts had two major benefits for Fifa. First, it meant it could not be humiliated again, as it was in the Visa/MasterCard case of 2006 which led to four senior staff being sacked. District Judge Loretta Preska ordered Fifa to scrap its deal with Visa, reinstate MasterCard, and pay all legal costs.
The ruling stated that Jérôme Valcke, then Fifa’s head of television and marketing, and three colleagues had lied repeatedly.
Second, it meant that the US courts, which have wide powers of discovery, were not be able to subpoena information about the process by which Fifa awarded hosting rights to the 2022 tournament to Qatar.
Fifa’s former president Sepp Blatter, who has since been banned from all football activities, remains convinced that it was this award which spurred the US authorities to begin investigating football corruption.
Even with the $300m hosting bonuses, it is questionable whether Fifa has got the best price for its rights. Had it waited, competition would have been fierce for the first World Cup on US soil since 1994.
ESPN, which had broadcast five consecutive World Cups, from 1998 to 2014, would have bid aggressively. The Disney-owned broadcaster was furious about being shut out of the process.
NBCUniversal was also known to have been interested in the English-language rights. Spanish language broadcaster Univision, which had lost the rights to Telemundo, would have fought hard to win them back.
Regardless of the hosting, an open tender process would have almost certainly secured bigger fees. The US has seen massive rights inflation for top football rights in recent years.
In their most recent rights cycles, England’s Premier League enjoyed a 100-per-cent increase, Uefa similarly doubled income for the Champions League, Spain’s LaLiga enjoyed an uplift of 275 per cent, while the joint Major League Soccer/USA Soccer deals brought those bodies an increase in income of 375 per cent.
Corruption trials set for November
Fifa may not be able to avoid a forensic legal scrutiny of its World Cup media-rights agreements and hosting decisions for long.
On November 6, the trial will begin of some of those who have pleaded not guilty to the corruption charges brought against them by the DoJ.
These include former Conmebol officials Manuel Burga, José Maria Marin, Juan Angel Napout, and former Concacaf officials Costas Takkas and Héctor Trujillo.
Of the 40 people accused in the case – of whom 20 have so far pleaded guilty – none are employees of the Zurich-based Fifa, although many were members of the governing body’s executive committee and influenced the sale of rights contracts, including those for the World Cup.
It will be up to Pamela K. Chen, United States District Judge, Eastern District of New York, in Brooklyn, to direct the criminal proceedings.
It is up to 211 national football federations, Fifa’s members, to complain if the governing body has undersold its prime asset, thereby reducing the amount that will feed down to each of them. History suggests that there will be no rebellion from that quarter.