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FIFA Could Lose $500 Million Thanks to Backroom TV Deal

Hoping to avoid litigation, FIFA gave FOX and Telemundo a sweetheart deal for the 2026 World Cup that Bloomberg now reports could cost the federation as much as $500 million.

by Mike Vorkunov
May 30 2017, 9:53pm

vía Wikimedia Commons

Usually, when FIFA engages in one of its classic (alleged!) something-feels-weird-about-this transactions, the soccer organization benefits pretty heftily. You don't get rich by sitting on your hands. But handing the 2022 World Cup to Qatar seems to have backfired for the self-enriching cabal in the end.

See, back in 2010, FIFA decided that Qatar would get to host that event, which brought along some problems. In addition to the country's exploitative labor laws, it's really freaking hot there, especially in the summer—we're talking like 120 degrees Fahrenheit—and that makes it hard to play high-level soccer. To solve this unforeseen problem—and really, who could have foreseen this being a problem?—FIFA decided to move the tournament from June and July, when it has historically been played, to November and December of 2022. Problem solved, right? Now nobody has to worry about heat stroke and epic dehydration.

Except that this did not sit well with the networks shelling out $1.1 billion for the U.S. TV rights for the 2018 and 2022 World Cups. In 2011, FOX and Telemundo had bid on the rights thinking they'd have content to fill the dead air when there's no NFL, limited NBA and NHL, and mostly baseball. With this new scheduling, the 2022 World Cup would have to compete with the NFL, the NBA, the NHL, and college basketball and football. You can imagine what the TV suits thought of this.

Terrified of the possibility of legal action, FIFA quickly worked behind the scenes to solve the problem. According to a new report from Bloomberg, FIFA gave FOX and Telemundo a no-bid contract for the 2026 World Cup at the same price as 2022, plus a clause that guaranteed the networks would pay a bonus to FIFA if the U.S. wound up hosting the tournament.

When FIFA suddenly announced that FOX and Telemundo were getting the rights for 2026 in February 2015, everyone else was shocked. One month later, FIFA officially rescheduled Qatar 2022 from summer to winter.

The decision continues to look worse and worse in retrospect. The 2026 World Cup is probably going to be held in the U.S., as part of a three-nation bid with Canada and Mexico. When the men's World Cup was held in the U.S. in 1994, FIFA set new attendance and ratings records. The competition among broadcasters to get in on the action this time around would likely have been fierce.

We'll never know how high the bidding war could go, though, because of FIFA's deal with FOX and Telemundo. Even with the bonuses from the two networks, a FIFA governing council member told Bloomberg that the lack of an open bidding process could cost the soccer organization as much as $500 million. LOL FIFA.

If FIFA cared about the allegations of slave labor being used to build Qatar infrastructure, it hasn't said much. And allegations of bribery are a dime a dozen. But losing $500 million? That's something FIFA will rue.

[Bloomberg]