Uefa could boycott the World Cup if Fifa plan goes ahead – what happens next?

The 55 member countries of Uefa – Europe’s governing body for football, whose teams are among the world’s best and tend to dominate international competitions, have drawn a line in the sand. On July 30, Uefa pledged to boycott all competitions run by Fifa, the sport’s global body, if a proposal to package up and sell interests in the World Cup to private investors went ahead. A few hours later, Concacaf, the North American football confederation, also rejected the proposal. But how did it get to this? And what does this mean for football? Let’s rewind to when the news broke that Fifa was looking to sell stakes in the World Cup to private investors. Things moved fast from there. There was plenty of condemnation of the plan from many in the game, including fan groups, players unions, and leagues. Football administrators, too, were swift to react: Concacaf were “deeply concerned by the lack of due process”. Uefa noted that “the soul and governance of football are not assets to trade – especially with zero transparency as to who gains financially”. The Asian Football Confederation (AFC) lamented the lack of “sufficient information and adequate time to assess the proposal in full, including its governance, legal, commercial and strategic implications”. The AFC’s point was particularly pertinent given the scale of Fifa’s proposal to create a new subsidiary, Fifa Forward Enterprise, to oversee commercial rights (broadcast, sponsorship, ticketing and licensing) and event operations – and then proceed to sell shares in this new entity to private investors. The proposal openly linked this deal with increased monies to member associations over the next funding cycle. Fifa’s budgets work in four-year cycles, with the next one set to run from 2027-2030. Where member associations would have received the currently budgeted $8m (£5.9m), under Fifa’s new proposal, they stood to gain $20m with optional access to another $20m in exceptional and immediate funding for special projects. Money, money, money Extra money is good right? After all, Fifa’s objectives include ensuring football “is available to and resourced for all who wish to participate” and that requires money. Well yes, but Fifa has announced that it made a record $15bn in revenue in the 2023-26 funding cycle. That’s on top of healthy reserves – money for a rainy day that could be repurposed for fair weather days too. Then there is the issue of what else the proposals mean. Leagues and governing bodies selling rights to private investors in sport is not new. For example, we have seen it in rugby union, formula one, and football, including in Spain’s La Liga and France’s Ligue 1. But these deals were all arranged with organisations that were in need of cash flow, as much of sport struggles to come up with money when needed. If you are desperate for cash, selling the family silver makes sense: you get money up front to survive now and you can worry about the future later. Losing European teams from competitions could have a signficiant impact on Fifa’s income. EPA / Cristobal Herrerra-Ulashkevich But if, like Fifa, you do not have a cash flow problem and are, in fact, doing very well, why take such a deal? You get more money up front, yes, but you also lose money long-term: Fifa members will forever get roughly 20% less profits. Then there is the point of control. The Fifa statement not only promised forward funding of $20m per member for the next four-year funding cycle, but also $22m and $24m for the next two cycles. This begs the question of where the money is coming from. The $20m per member for the upcoming cycle roughly equates to the proposed share sale value ($4.2bn = $20m per member x 211 members). So, increasing money for the next two cycles means that either Fifa expects its profits to soar, or it is planning to sell more shares (in order to get equivalent cash) or use reserves. If the former, then the valuation is too low – it would be giving away the family silver at heavily discounted prices. If more shares are sold, then Fifa could lose control over competitions to investors. This would make Fifa beholden to its investors and make commercial return an obligation. This could potentially lead to everything from more hydration breaks (an opportunity for advertisers) to more frequent international competitions with more teams involved in order to maximise income. This raises other governance concerns: how were the investors selected, what conflicts of interest were involved, and how much are individuals profiting from this deal? Uefa’s president Aleksander Čeferin has found himself at odds with Fifa over several recent decisions. EPA/Ronald Wittek So what happens now? Fifa noted that it was all a consultation, so it can concede that this process did not bring the hoped for result of agreement. No harm done, although the fallout from such episodes can sometimes affect sponsorships, bring pressure for governance reform. or lead to changes to internal controls. However, it generally has a minor impact on the member associations. If Fifa does not concede, this could be the first step in a very protracted negotiation. Through a Fifa competition boycott, Uefa would lose access to some competitions that bring in funds to their national teams (through prize money) and their clubs (through payments for players at World Cups). Furthermore, the next World Cup is due to be co-hosted by Uefa members Spain and Portugal, alongside Morocco and others. Awkward. The good news is that World Cup costs often outweigh the returns for host nations, so Spain and Portugal could benefit from not hosting. Fifa would have to change hosts if this came to pass – a cost to Fifa. However, insurance or legal disputes may come into play. There is precedent for this, with the 1986 World Cup having moved to Colombia from Mexico, but it is costly. For Fifa, however, a boycott would be damaging in terms of income: broadcasters and sponsors would not pay as much without European teams (including the current champions) in attendance. Then there is the effect on the new subsidiary, which aims to “unlock the full potential of Fifa’s broadcast rights and sponsorships across all of its tournament portfolio”. The value of that portfolio would fall significantly without Uefa teams. Investors would therefore be willing to pay a lot less to acquire those shares. Which means less money without Uefa. Some have floated the possibility of Uefa striking out on its own. This remains a very unlikely scenario, despite the likes of liberal democrat leader Sir Ed Davey urging them to consider it, and several steps too far ahead. So it’s probably fitting to end where we started, with Uefa’s statement: “Some things are simply too important to sell. The Fifa World Cup belongs to football.” Time will tell whether it’s right.