SoftBank Led Consortium Offers FIFA $25 Billion for Expanded Club World Cup, Nations League
A consortium of Middle Eastern/Asian investors (including SoftBank Group, SFTBY) has offered FIFA $25 billion for a 49% stake in an “expanded version of (the) Club World Cup” (annual competition featuring the winners of 7 regional tournaments) and a “proposed global league for national teams” (to be known as the Nations League). The proposal, to span 12 years but otherwise lacking detail, was rejected by the FIFA Council pending additional information; despite support from President Gianni Infantino, who could use the platform as the basis for his 2019 re-election campaign. FIFA, which traditionally generates revenue via ticket sales, sponsorships and media rights, has never sold control of its competitions.
Howie Long-Short: The sheer size of this offering is staggering. $25 billion would represent a 47% increase in revenue for an organization that currently generates $5.5 billion/WC cycle and +/- $100 million (just $37 million in ’17) for the Club World Cup.
To clarify, $12 billion was offered for a national-team competition, with the remaining $13 billion allocated for a quadrennial tournament comprised of the world’s top club teams; including at least 12 from Europe. There are many reasons why this deal will never be completed, but club valuations must be at the forefront. For $13 billion, the mystery investment group could buy Arsenal, Chelsea, Liverpool, Juventus, Tottenham Hotspur, Paris Saint-Germain, Borussia Dortmund, AC Milan, Athletico de Madrid, West Ham United, AS Roma and Inter Milan, run their own 12 team tournaments and still have nearly a half billion dollars in the bank.
The European Club Association also formally opposes the formation of any tournament that would compete with the UEFA Champions League, worth $15 billion over 4 years. Even if the financial aspect were to be overcome (unlikely), the association has said it would like to cut back on the number of games its teams play in the name of player health.
Fan Marino: Lakers minority owner Patrick Soon-Shiong (also owns L.A. Times and S.D. Tribune) and D.C. United CEO (and Swansea City minority owner) Jason Levien are closing in acquiring Erick Thohir’s majority stake in the MLS franchise, at a league-record $500 million valuation. That figure sounds outlandishly high to me. Forbes (2017) pegged the league’s most valuable team at $315 million (L.A. Galaxy), the United at $230 million and you can buy an expansion franchise for just $150 million. The United generated $25 million in 2016 revenue. Even if they doubled revenue in their new soccer specific stadium (opens in July), the team isn’t worth 10x revenue; NBA franchises sell for 8x, NFL franchises sell for closer to 6x.
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