UEFA refused to participate in FIFA tournaments due to a commercial dispute. What you need to know

European countries will not participate in world football tournaments, including the World Championships. The boycott was announced after the International Football Federation (FIFA) proposed to create a separate company to organize tournaments and sell its stake to private investors from the entourage of US President Donald Trump. For football, what is happening has become the biggest crisis in its entire history. What you need to know about conflict in the most popular sport is in the Izvestia article.

What FIFA has proposed

• The International Football Federation (FIFA) has announced plans to create a commercial organization, FIFA Forward Enterprise (FFE), which will manage the commercial and operational rights to its competitions. These include not only the FIFA World Cup, which recently ended in North America, but also the junior championships, the futsal and beach soccer World Championships, the Club World Cup, the Intercontinental Cup, as well as all their female counterparts.

• The FIFA proposal states that the organization will retain a controlling stake in the commercial structure, but at the same time allow private investors to acquire minority shares. FIFA has promised that no more than 20% of FFE shares will be sold, and control over the remaining shares will remain with the parent organization. JP Morgan Bank estimates that FFE's market capitalization will be $20 billion. FIFA plans to raise at least $4.2 billion from private investors by selling a minority stake.

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• FIFA's plans will allow its 211 members to increase the funding provided by the FIFA Forward program. If in 2023-2026 it amounted to $8 million, then in the next four years national associations are invited to earn $ 20 million. FIFA also wants to launch a new FIFA Fast Forward program, which will bring each member another $20 million. It is proposed to finance the payments through the sale of a minority stake in FFE.

• FIFA has promised that private investors who own FFE will not be able to influence FIFA's activities or the organization of the World Cup. They will not be allowed to make decisions on issues such as the format, frequency and expansion of the World Cup. The new commercial structure will be launched if the majority of associations support it. FIFA has announced that a decision needs to be made by September 19, otherwise national members will not receive the promised payments.

Why FIFA's plan has attracted criticism

• For global sports, which is usually run by non-profit organizations, the transfer of rights to commercial entities is not something new. For example, the International Automobile Federation (FIA) has long given away the rights to host its main world championship in the Formula 1 class to an independent group of companies, Formula One Group. In 2019, the International Table Tennis Federation (ITTF) founded the commercial World Table Tennis to host the competition. The European Union of Football Associations (UEFA), whose 55 members are members of FIFA, also owns two commercial entities: UEFA Events SA, which sells hospitality packages at tournaments, and UEFA Club Competitions SA, which manages club tournaments in conjunction with the Association of European Clubs.

• However, FIFA's plans to create a new company and give it the commercial rights to the World Cup immediately caused outrage in the football community. As soon as reports of this appeared in the media, UEFA issued a statement calling the sale of football unacceptable. In rather harsh terms, the European organization pointed out that FIFA does not own football and is crossing a line beyond which it cannot enter. In subsequent messages, UEFA directly accused the parent organization of wanting to profit from football.

• The outrage is caused by several reasons at once. Firstly, many people were surprised not by the intention to create a separate structure for managing the World Cup, but by the willingness to sell a stake in it to private investors. FIFA President Gianni Infantino's assurances that this would only attract additional funding have not convinced those who fear that the most popular sports tournament will go into private hands and change beyond recognition. The recent changes at the World Cup have already been viewed with hostility by fans. The dynamic pricing of tickets, breaks for drinking during matches, and performances by artists between halves — all this gave rise to FIFA's accusation that it was not concerned with the development of football, but with making a profit from it.

• The second complaint against FIFA was to whom exactly 20% of the FFE will be transferred. It will be received by American investors led by the Thrive Capital fund of Joshua Kushner, the brother of Jared Kushner, who is the son-in-law of US President Donald Trump. After the story of the cancellation of the disqualification of American football player Florin Balogur, which Trump personally asked Infantino about, the head of the White House gained an ambiguous reputation among football fans. Now they fear that the World Cup will finally turn into his personal entertainment.

• Some of the complaints are addressed to Infantino personally. The intention to increase payments to national associations is attributed to his desire to buy loyalty from countries in Asia, Africa and Oceania. There was also information in the media that the FIFA president, if he left office, would be able to lead the FFE and continue to control the financial flows of the organization.

• UEFA's reaction to FIFA's plans has other motives. In recent years, the world federation has reformed its World Club Championship, expanding its membership. In the future, this tournament may become a direct competitor to the Champions League and other UEFA club competitions, and in the case of attracting billions of dollars from private investors, the likelihood of this will increase. Prior to this, UEFA had been in conflict with FIFA over plans to hold the World Cup every two years instead of four, because such a World Cup would overshadow the European Championship. In general, the two organizations have been secretly competing with each other for leadership in world football for decades, and the powerful financial incentive that FIFA wants to provide itself would finally resolve this dispute in favor of the world federation.

What have FIFA's plans led to?

• Just two days after FIFA made the proposal, UEFA announced a boycott of its competitions. The published statement said that all 55 European associations will immediately cease participating in tournaments until FIFA abandons its plans and guarantees that it will not try to transfer football management to private hands in the future in any other way.

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• The UEFA decision brings the conflict with FIFA to a level unprecedented in the history of sports. Never before has the confederation, which unites dozens of the strongest national teams in the world, threatened the world federation with an actual withdrawal from its jurisdiction. Without European teams and clubs, any FIFA tournament loses all sporting meaning and will be uninteresting to fans. Such competitions will not be of financial interest either, so an attempt to attract outside investors to them is immediately doomed to failure.

• The first test of UEFA's intentions will be the FIFA U-20 Girls' World Cup, which will be held from 5 to 27 September in Poland. In addition to the host of the tournament, five more European teams are expected to participate. The next World Cup in 2030 is also under threat, as Portugal and Spain are among its organizers.

• The position of UEFA is shared by other continental organizations. The Confederation of North and Central American and Caribbean Football (CONCACAF), which unites 41 countries, rejected FIFA's proposal. The Asian Football Confederation (AFC), with its 47 associations, declared solidarity with UEFA and CONCACAF. They did not talk about boycotting tournaments, but now at least three quarters of FIFA members have unequivocally shown that they will vote against the creation of the FFE if such an issue is still being discussed.