FC Diez Media’s four-year, $350m-per-year deal for exclusive media and sponsorship rights to the Copa Libertadores and Sudamericana marked the first time they had been acquired in an open tender.
If the testimony of ex-Torneos chief executive Alejandro Burzaco is to be believed, it was also the first time in a long time they had been acquired without a scheme of bribery and kickbacks.
FC Diez Media’s deal was far cry from the grubby systems of old, and the first step toward a new way of doing things in South America.
The Traffic Sports, Full Play and Torneos y Competencias agencies had dominated the continent’s broadcast rights landscape for decades, mostly thanks to the rank and file corruption that infected almost every major stakeholder in South American football.
As a result, these three agencies had commercial control over almost every single major South American football competition for more than two decades. Unless an agency was willing to board the Brown Envelope Express, its chances of commercialising South American football rights were zero.
In May 2015, the US Department of Justice changed all of that. Their global investigation into corruption in football led to the conviction of the late Traffic Sports boss Jose Hawilla, as well as the indictments of Hugo Jinkis and Mariano Jinkis (Full Play), Alejandro Burzaco (Torneos) and Aaron Davidson (Traffic Sports USA).
Within months of that wave of indictments and arrests, South American football was open for business.
The new guard
In the four years after the scandal, IMG, DAZN and Mediapro have filled the biggest gaps left by those indictments, winning rights and production contracts to major club and international competitions.
While IMG and DAZN hold media and sponsorship rights to South America’s pan-regional club competitions, Mediapro controls the television production, as well as the operation of video assistant referee technology. Conmebol was glad to give those contracts to Mediapro as it finally broke the relationship with Torneos, which had produced the previous 19 Copa Libertadores.
Other agencies have also joined the fray. Infront partnered with Synergy Sports, the boutique agency set up by former Team Marketing executive Patrick Murphy, to unsuccessfully bid for rights to the Libertadores, Sudamericana and the Copa América. Synergy also advised the Brazilian football confederation on its digital rights sales process in 2017.
Lagardère Sports acquired international rights to the Chilean Primera Division. MP & Silva bought rights to the 2019 Copa América, and these passed to Dentsu when the former agency collapsed.
Elsewhere, the availability of international and betting rights has become a magnet for new entrants, particularly investment fund Prudent. Prudent has recently acquired international media and betting rights to Colombia’s Categoría Primera A, the top tier of football in the country. These rights were previously held by Full Play.
But it’s Prudent’s pursuit of international rights to the Brazilian Serie A – formerly the exclusive domain of Traffic – that has become the longest and most complex battle for rights in the region since the 2015 scandal. The fund offered up to R$3bn (€664/$733m) in rights fees and marketing spend over ten years, from 2019 to 2028 – a deal that was eventually rejected.
The fund is continuing its campaign to acquire the rights from 2020, but it is understood that IMG is currently attempting to acquire Brazilian clubs’ rights on an individual basis. Both bidders see huge potential in both the league and the business of its betting rights, particularly in the US.
As predicted by commentators at the time, the football industry has been blown wide open following the purge of 2015. But in amongst the many new cast members in Latin American football, the old guard has found ways to stay in the game.
Not dead yet
Behind the scenes, all three agencies have continued to make money from past contracts, earning tens of millions of dollars each from Conmebol after the governing body reclaimed rights to the 2019 and 2024 editions of the Copa América from Datisa, the agency created between Torneos, Full Play and Traffic.
Datisa is alleged to have paid millions in bribes to secure rights to the 2015, 2016, 2019 and 2024 events and, while several of the individuals involved in that negotiation were indicted and convicted by the DoJ, Conmebol was unable to dissolve the contract. As a result, it was forced to pay Datisa a nine-figure dollar sum to reclaim the rights.
Only one of the three powerhouse agencies has been rendered dormant by the scandal. Traffic Sports is now operated by lawyers whose job it is to uphold contracts the DoJ were unable to break.
Full Play has stayed in active business, clinging onto the hope its can use old connections to rise again. Because of clauses inserted in its contracts for rights to 2018 Fifa World Cup qualifiers, the agency has had the chance to match bids for rights to the 2022 Fifa World Cup qualifiers of all South American nations apart from Brazil, despite its history of corruption in the region.
Its latest public activity was to bid for the international media rights of Bolivian national team’s 2022 qualifiers, though it failed in its attempt. It is thought that the agency’s new president, Carlos Federico Fascetto, is turning his attention to opportunities in Venezuelan football.
Then, there is Torneos. Despite being levied with a $112.8m fine by the DoJ in 2016, the agency has managed to continue much as it did before.
It has secured multiple new contracts in its power base of Argentina – including international media rights to the country’s top three divisions of professional football and rights to all Fiba basketball events until the end of 2025. It has also kept its existing contracts intact, such as its deal for 2018, 2022, 2026 and 2030 Fifa World Cup media rights in Argentina, Uruguay and Paraguay – a deal that Torneos’s former chief executive Burzaco has said was secured by bribing Fifa officials.
Mediapro & Torneos
The agency’s relative success since the scandal – and its willingness to compete with the likes of IMG and Mediapro for rights and production contracts – has made it the target of multiple acquisition attempts. SportBusiness understands IMG attempted to buy Torneos in 2016, but decided against an acquisition after completing the due diligence process.
Three years on, Torneos’ main rival for production contracts in the region, Mediapro, is in the process of swallowing up its competition. Having begun negotiations in August 2018, sources at Mediapro say it will complete its acquisition of Torneos this month. But many experts in the region believe Mediapro has encountered the same issues as IMG during due diligence – particularly the uncertainty around Torneos’ legal liabilities and whether its current rights, production and licensing contracts can be transferred to another company.
Mediapro is said to be desperate to finish the job, as a successful purchase would give the agency control over all major sports production contracts in South America, as well as a powerful position in Argentine football.
Torneos has a huge production business in Latin America, producing over 21,000 hours of content each year across pay-television broadcasters Fox, DirecTV, TNT and TyC Sports, the latter of which Torneos part-owns alongside media group Clarín.
Torneos also holds international rights to Argentina’s 2022 World Cup Qualifiers – an area of business Mediapro is keen to expand into. Mediapro currently holds international rights to the 2022 qualifiers of Chile, Bolivia and Paraguay, and is keen to add to its collection.
Glacial pace of change
The legacy of corrupt federation presidents and agency bosses diminishes by the day in South America, but the transition to open business practices will take some time.
After being a hub of nefarious activity in the 1990s and 2000s, Conmebol recognised a need to set an new precedent for the sale of broadcast and sponsorship rights. The governing body hired professional services firm EY to conduct externally conduct the tender process to sell rights to the Copa America 2019, believing this would bring new bidders to the table.
Unfortunately, bringing in auditors doesn’t automatically solve every problem. Conmebol failed to accurately inform potential bidders that rights in several territories were unavailable due to Datisa’s existing deals for the 2019 and 2024 tournaments. Conmebol claimed it had ‘stripped’ these rights from Datisa, but this turned out to be untrue. Many potential bidders stayed away.
The Confederação Brasileira de Futebol (CBF) followed Conmebol’s lead, hiring EY to oversee a tender process to sell international media rights and exclusive stadium advertising rights to the Brazilian Serie A. But the winner, BR Foot Media, withdrew from the deal over mis-selling claims – it transpired that neither set of rights were exclusive, and that the media rights were severely restricted.
In Ecuador, several so-called tenders for the sale of broadcast rights to the domestic league were cancelled during 2017 and 2018 after the federation insisted the rights had been sold 20 years into the future. When that deal was struck down by a court, the federation began rejecting bids in increasingly inventive ways – one bid was declared void due to the envelope “not being well-sealed”. Ironically, another bid was rejected due to an anti-corruption form being incorrectly stamped.
It’s fair to say that instances like these are becoming rarer. Most of the tender processes conducted by South American federations for 2022 Fifa World Cup qualifiers were conducted openly and fairly. The Peruvian and Paraguayan federations hired the Octagon agency and BDO Consulting respectively to oversee their sales processes, earning praise from bidders and onlookers.
The pace of change has been quick across the continent as national federations have followed Conmebol’s lead in attempting to do things the right way. But a wholesale transformation of South American football’s business culture could take a generation or two to bed in.
Peru may have won acclaim for its World Cup qualifier sales, but the federation’s internal politics still reek of the bad old days. Its most-recent elected president, Edwin Oviedo, is currently detained on suspicion of murder. Oviedo is alleged to have been involved in the killings of two union leaders at a sugar factory and faces 26 years in prison.
Slowly but surely, the old guard are fading away – the death in August of ex-Conmebol president and corruption kingpin Nicolás Leoz leaves one fewer remnant. But as Torneos’ deal for media rights to the Fifa World Cup still has over a decade to run, it won’t be until 2031 that South American football has a truly clean slate.