FIFA gambling on television as its biggest business in the World Cup has a history marred by irregularities and bribery
Horst Dassler is unknown to the vast majority of soccer fans today. However, his way of understanding television revenue generation for FIFA has completely changed from how fans sit in their living rooms to watch their team’s matches. Today, forty years later, the business is the main source of income for the world soccer governing body’s most important program and the main source of corruption in FIFA competitions.
Ibai refuses to go to World Cup in Qatar with Spanish team: “It’s not coming out of my ball”
FIFA’s history in recent decades has been marked by various scandals that have tarnished the organization’s name and its competitions. The choice of World Cup venues, the election of the president of football’s highest governing body or investment programs in developing countries have caused a sharp decline in the confederation’s image. And, of course, FIFA, the main business of television, has not escaped this long shadow since its inception.
Cameras around the world will be trained on the ball on Sunday in Qatar. The opening match of the most controversial World Cup in the last 40 years will be played between the local team and Ecuador. Despite numerous complaints of labor exploitation or human rights violations in the construction of the country’s stadiums, FIFA aspires to increase its revenue from previous World Cups. The body has not made public revenue estimates directly related to the World Cup. To know this estimate, one needs to go to the FIFA accounts, which are cycled every four years during the World Championship, in which the tournament has a huge turnover. In the current period (2019-2022), the international federation wants to access 6,440 million dollars. More than half of these, 3,300 million, relate to television rights. In the previous period ending in Russia 2018, audiovisual revenue was 3,100 million.
The figures confirm the relevance of the event for television and the interest in acquiring the rights. Audiovisual rights are one of the main businesses in world football today. Evidence of this is operations such as the sale of a percentage of LaLiga in Spain or the LFP in France to the CVC investment fund in exchange for a portion of the television revenue. The German league, the DFL, has also been looking for its financial partner since the summer. The World Cup is no less. According to FIFA’s own statistics, the last World Cup had a combined audience of 3,672 million people. France’s defeat of Croatia in the final was watched by 516 million viewers, making it one of the most watched sporting events in the world. A recent survey conducted by Ipsos in 34 countries showed that 55% of the adult population planned to follow a match in the championship.
There are two ways to watch the World Cup in Spain. on one side, Public Television, TVE, It will broadcast the matches of the Spanish team as well as the best matches of each phase. On the other hand, Movistar, which will broadcast all the matches and have a 24 hour channel. However, the rights belong to Mediapro, a production company based in Barcelona with Chinese capital and directed by professional Jaume Roures. The power was acquired in January 2019 for an undisclosed sum.
Outside of Spain, there are many national broadcasters with World Cup rights, but there are also regional giants that will broadcast matches in dozens of countries. This is the case of Qatari Bein Sports, directed by PSG owner Nasser Al-Khelafi. The state company has played an important role in television rights in countries such as France or previously in Spain. Their involvement has been punctuated on occasion by corruption scandals to procure this product. It will be responsible for broadcasting the Qatar World Cup in France, its overseas territories and most Muslim countries. Other relevant actors in the cast are South African SuperSport, which will broadcast the World Cup in 43 African countries, or New World TV, which will be in French-speaking Africa. In Europe, the EBU, the owner of Eurovision, distributes rights in 37 countries. Fox, for its part, will broadcast in the US.
The profession has been dogged by suspicion in the past. The aforementioned Dassler was the owner of Adidas, a FIFA affiliate. He decided to create International Sport and Leisure (ISL) in the eighties, the company that helped fuel the commercial explosion of the Soccer World Cup. Adidas, along with Coca-Cola, one of FIFA’s main sponsors, and Dassler, realizing the business potential, began using all commercial and television revenue from the World Cup and the rest of the tournament through the ISL.
A recent documentary broadcast by Netflix, ‘FIFA’s Ins and Outs’, examines the relationship between Dassler and the organization’s then president, Joao Havelange, spanning more than a decade. During this period the ISL took advantage of this growing business in exchange for bribing the President. The documentary refers to the company as a “bank” for FIFA, the supplier of its juicy income. The company went bankrupt at the beginning of the 21st century, already with Joseph Blatter at the head of FIFA, leaving a complicated financial situation.
“Criminal Conduct” of a Mediapro subsidiary.
But this is not the only case of corruption related to telecasting of the World Cup. One of them affected Mediapro, Jaum Rours company. A company owned by Chinese conglomerate Southwind admitted to the US Department of Justice in 2018 that it bribed officials of the soccer federations of Caribbean and Central American countries to broadcast the 2018 World Cup and 2020 qualifiers.
“Imagina Media – a subsidiary of MediaPro – accepts responsibility for its criminal conduct and that of its subsidiary Imagine US, and for not promptly conducting an internal investigation after learning of the allegations against its agents,” he said. The Department of Justice said in a statement. In exchange for avoiding the trial, the company had to pay $22 million. This assumption of corrupt practices did not prevent it from being one of the companies managing the television rights of the World Cup in Qatar.
Two years later, a more extensive investigation into FIFA officials in the United States for taking bribes in concessions to organize the World Cup in Russia and Qatar was revealed. The investigation led to media group executives accusing soccer officials of bribing soccer officials to secure broadcast rights to major companies such as Fox, Televisa or Globo. PSG’s owner and director of Bean Sports, Qatari Nasser Al-Khelafi, and former FIFA number two, Jerome Valcke, have also been prosecuted in Switzerland over alleged corruption in television contracts for different championships.
Adidas and Coca-Cola, loyal to FIFA
But FIFA’s revenue for this World Cup goes beyond television rights. 51% come from this profession, followed by marketing, with 28%. Both businesses operated under a contract sealed by Dassler and Havelange and remained the organization’s main source of income. Today they contribute 1,760 million to FIFA in 2019 and 2022, up from 1,600 million in the previous period. The agency’s revenue forecast has not been dented by the championship scandals in Qatar
Some of these FIFA “partners” have been around for decades. This is the position of Coca-Cola or Adidas behind the commercialization of sponsorship in championships organized by the organization. Both companies have refrained from strongly condemning the choice of Qatar as their headquarters, however He had to respond to criticism by admitting that “more could be done” to guarantee human rights Placement in favor of compensation for in-country or migrant workers.
These two brands are joined by two Qatari multinationals, Qatar Airways and Qatar Energy. Other big companies like Visa, Wanda or Hyundai complete the list of sponsors. Cryptocurrencies and NFTs, which have become increasingly important players for sponsorship in the football world, are also present in FIFA’s contracts for Qatar. The giant Crypto.com, one of the major players in the field, signed a sponsorship deal with the organization in March.
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