The potential sale of a newly created FIFA commercial arm to a private equity fund with ties to Donald Trump has been described as "not a beautiful idea." The proposal, involving FIFA president Gianni Infantino and Joshua Kushner, brother of Trump's son-in-law Jared Kushner, has raised questions about conflicts of interest and the monetization of the U.S. presidency.
Sports organizations and clubs have increasingly become targets for private equity and hedge funds seeking investment opportunities. CVC Capital Partners pioneered this trend, investing in motorsports and other sports like volleyball. Apollo Global Management is reportedly launching a $6 billion sports fund, and Blackstone has invested in India's Premier League cricket.
UEFA, European football's governing body, has expressed strong criticism of the FIFA proposal, recalling its successful opposition to the JP Morgan-backed European Super League in 2021. However, many major European football clubs have already accepted private equity financing, with an estimated one-third of clubs in the top five leagues having done so.
Formula 1 serves as a prominent example of sports' financial growth. Bernie Ecclestone sold his stake in the sport for $1 billion in the early 2000s. A decade later, CVC sold its holdings to Liberty Media for $8 billion, expanding the franchise in the U.S. with new Grand Prix circuits. Recent valuations for Formula 1 have reached as high as $25 billion, with individual teams also valued in the billions.
Questions have arisen regarding FIFA's authority to sell its commercial vehicle, the FIFA Forward Enterprise, as it may require consent from its 211 member associations. Despite potential hurdles, FIFA's commercial approach to recent events, including high ticket prices and advertising for the World Cup, is projected to generate approximately $13 billion over a four-year cycle. This figure could grow with opportunities in women's football, the Club World Cup, social media, streaming, and merchandise.
While the specific Infantino-Kushner deal may not materialize, the underlying trend indicates a move toward a more commercialized model within sports organizations. FIFA, a non-profit association, faces scrutiny as its commercial activities expand.