FIFA officials arrested on charges of corruption

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FIFA officials escorted out behind sheets in Zurich. Image credit: Pascal Mora for The New York Times

The New York Times is reporting that top officials of FIFA have been arrested in Zurich on charges of corruption and face extradition to the United States. The US Department of Justice indictment names 14 people on charges including racketeering, wire fraud and money laundering conspiracy. Among those named are Jeffrey Web, president of CONCACAF, Jack Warner, former president of CONCACAF, Eugenio Figueredo, former VP of CONMEBOL and Jose Maria Marin, president of the Brazilian FA.

“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said United States Attorney General Loretta E. Lynch.

United States officials also revealed that four people, including the former FIFA executive Chuck Blazer, and two sports marketing companies had entered guilty pleas. Blazer forfeited $1.9 million when he entered his guilty plea in 2013, and agreed to make a second payment at sentencing

Sepp Blatter was not named in the indictments. FIFA is scheduled to complete an election this Friday to determine its leader for the next four years.

Check out the full article.

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FIFA officials arrested on charges of corruption

A televised FIFA presidential debate. Spread this idea!

I love David Cushnan’s idea to have Sepp Blatter and Prince Ali Bin Al Hussein participate in a live televised debate as part of the FIFA presidential election.  He floated this idea in a great piece on the SoccerEx blog and it that should be spread far and wide.

He likens the event to the first televised debates in the UK during the national election in 2010 where voters were able to get a sense of each candidate.  Similarly soccer lovers around the world would get a similar look:

It would be a rare chance to give football fans around the world a proper insight into what makes the men that want the most powerful job in the world’s most popular sport tick.

Imagine Blatter, Prince Ali and even the outsider, Jerome Champagne, engaging in a genuine debate over the big issues facing world football and how they intend to run the sport over the next four years. Imagine them picking holes in each other’s manifestos, face-to-face. Imagine them asking each other questions and interacting in front of the cameras. There might even be the odd joke.

“Why Fifa should stage a live, televised presidential debate” – SoccerEx Blog

One can only imagine the mother lode of Blatter soundbites to potentially be had…Comedy aside, I would be emphatically in favor of it as any additional insight into the FIFA-bubble is a step towards more transparency.  It would surely be more theater than candid conversation but the egos involved are far too large to ignore the spotlight for long.  Supporters worldwide will finally get a glimpse of the men behind soccer.

Although supporters are irrelevant to the vote the nature of the broadcast will force candidates to address supporters (as a group) and their ideas. There is a psychological significance to that acknowledgement which could have an effect on candidates even if they may not believe it themselves. It also creates engagement among supporters, feeling involved is powerful and important if any real change in FIFA is ever going to happen.

It’s a great idea and I hope it gains some support.

A televised FIFA presidential debate. Spread this idea!

The 4 biggest events hitting the soccer business in 2015

In the spirit of the new year here is a look forward at four events that are sure to produce the biggest waves for the business of soccer in 2015.

THE Third Party Ownership FALLOUT

Last September, FIFA released a statement announcing its decision to ban third-party ownership, a practice in which entities other than clubs are able to control the registration of players. At the time it was just a warning with no time frame, but in December FIFA dropped a mini-bomb by setting a deadline of May 2015 for the practice. This came as a shock to . While all existing TPO agreements will be honored until expiration and new contracts formed between now and May are capped at a one year duration.

FIFA’s decision (a correct one in my opinion) has created a horizon whereby investors will be forced to sell in order to realize the value of their agreements before expiry. Previously the only timeframe was the end of a player’s career due to age or injury, as it was extremely unlikely a player would not renew the relationship with the investor.

The exit of investor money should have a significant impact on transfer prices, particularly for players from markets like South America and Portugal where TPO is more common. Whether that shock is seen as early as this summer’s window remains to be seen but there could be some interesting action in the windows ahead.

A NEW FUTURE FOR FIFA?

Sepp Blatter is coming up for re-election this year in what would be his fifth term as the President of FIFA. Blatter was re-elected in 2011 after his only opponent, Mohamed Bin Hammam, then President of the Asian Football Federation, withdrew due to bribery allegations.

The past four years have seen FIFA rocked by allegations of corruption in the World Cup bid process, vote buying in internal elections and the general misconduct of federation chiefs, including bribery and intimidation, in governing their respective territories. All have contributed to a growing public awareness of an institution holding unprecedented control over a multi-billion dollar sport and business with little accompanying accountability or transparency.

John Oliver summed it up best this past summer:


Clearly there are big questions over Blatter’s ability (or willingness) to bring change to FIFA. This doubt was most recently piqued by the resignation of independent ethics investigator Michael Garcia after an alleged attempt to misrepresent the results of his inquiry.

January 29th is the deadline for FIFA members to declare their candidacy; currently the only rumored challenger is Prince Ali bin al-Hussein of Jordan. May 29th is the election date, it’s worth marking down to see what direction FIFA chooses to head in.

FULL FORCE Financial Fair Play

UEFA’s Financial Fair Play regulations will have been in force for 3 years at the end of the 2014-15 season. Although 2011-12 was the first year of FFP regulations, 2014-15 marks the first three year period in which the rules have been fully in effect without exception and at the lowest level of permitted deficit.

Image courtesy of  FinancialFairPlay.co.uk http://www.financialfairplay.co.uk/financial-fair-play-explained.php

Image courtesy of FinancialFairPlay.co.uk

The 2014-15 season then becomes an extremely important gauge for FFP as it should reflect an overall lower level of spending as clubs acclimate to the new regulations.

The coming year will also be a test of FFP’s enforcement mechanisms and whether they represent credible threats to the clubs. Last year UEFA handed out sanctions for failing the break-even rule, most notably to Manchester City and Paris St-Germain. The punishments came in the form of caps on wage increases, transfer spending and squad limits for European competition but fell short of the stringent competition bans desired by some.

Whether these penalties are a true deterrent or merely a luxury tax on clubs with luxury to spare remains to be seen.

HELLO, IT’S INTERNET.

Our final issue takes a step away from governance, regulation and transfer issues and squarely into the business of soccer, specifically the broadcast world. ESPN has just announced a streaming service available for a monthly fee and independent of any cable relationship. Although long anticipated, the launch marks the beginning of streaming as a widespread viable stand-alone alternative to traditional broadcast and cable distribution.

Up till now soccer streaming services have been unimpressive suffering from either limited content (“Oh boy, the Polish Ekstraklasa…”), poor technical performance, little freedom from traditional contracts or just be plainly illegal. The supporter with a computer or mobile had few options to choose from.

While this doesn’t spell the end of traditional distribution channels it is the beginning of a shift for established soccer markets and a drastically new way to reach fans in developing ones.

Do you agree? Did I miss something important? Did I get things totally right? Totally wrong? Tweet at @thesoccerceo

The 4 biggest events hitting the soccer business in 2015

What is a Bridge Transfer?

For those looking to understand “Bridge Transfers” there is a great post over at the Soccerex blog that lays out the advantages which are leading more clubs to use this mechanism. A bridge transfer is essentially the use of an intermediary club to gain or retain economic benefits from a player while maintaining the legal rights of a FIFA registered club. These benefits include continuing control over player registration, commercial payments, tax avoidance, and reduction of ancillary payments related to national FA rules.

bridge transfer diagramHow does this work in practice? For a desired transfer from Club A (player’s original club) to Club B (new club), the club or Third Party Owner will transfer the player registration to Club C and from there the player will be loaned out to the Club B. The transfer fee and location of Club C will depend on the particular benefit the clubs are looking to realize.

It is likely that demand for bridge transfers, and other similar transactions, will be driven by the growing sophistication of clubs and third-party owners and the increasingly global transactions occurring in the soccer market. Bridge transfers are not negative by definition, like many other legal and tax workarounds they exist because the framework allows them to. However large questions remain, specifically whether the use of bridge transfers is an unfair economic advantage which skews competitive balance and the existence of bridge clubs, particularly those which are simple shells for sheltering player registrations.

What is a Bridge Transfer?