GoKawiilNew York’s prestigious-yet-secretive venture firm Thrive Capital has been hauled into the center of a messy drama that could result in criminal charges against Gianni Infantino, the controversial president of global soccer organization FIFA.
And now Thrive’s prominent founder, Josh Kushner, has finally spoken up about the deal in a statement saying that he still thinks the original idea was a sound one, and would have been good for global soccer. But, he says, “had we known what this would devolve into, we would not have gotten involved.” (Full statement below.)
The scandal involves Infantino’s failed plan to create a new corporate entity called FIFA Forward Enterprise (FFE) that would have owned some of the commercial aspects of FIFA competitions like the World Cup, including revenues from TV rights and ticket sales.
This entity would have been fully owned by FIFA’s member associations (aka teams) but all MAs would have had the option to sell some of their shares as secondary sales to private investors. The MAs would have had to vote to create the organization and then agree to sell their own shares to private investors.
FIFA engaged JPMorgan to drum up potential investors for the proposed company. That’s where Thrive came in.
Thrive agreed to be a lead (but not the sole) investor in a potential sale of $4.2 billion worth of secondary shares purchased from the teams, representing 20% of FFE at a $20 billion valuation.
But the European teams, which benefit disproportionately under the current structure compared with other regions like Africa, grew outraged by the idea. An association that includes North American teams also objected. Their concern was over the potential influence of outsiders, particularly private equity.
The backlash caused FIFA to scrap the plan before the MAs could vote on it. (Things have grown even uglier, too. For instance, FIFA’s chief operating officer, Kevin Lamour, was reportedly fired after criticizing Infantino and this plan.)
Note that FIFA is composed of 211 MAs worldwide, yet only 55 of them are in Union of European Football Associations (UEF), while another 41 are in the North American organization, Concacaf, which includes soccer associations from North American, Central American and Caribbean. Had the idea of full and equal ownership of these revenues gone to a vote, who knows what might have happened? But it isn’t wild to think it would have been approved.
Meanwhile, the UEFA is now pursuing legal action against Infantino and attempting to mount some kind of criminal case, BBC reports. European fans are also calling for Infantino’s head.
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