By Echo Wang and Rohith Nair
July 28 (Reuters) - FIFA said on Tuesday it plans to create a new commercial subsidiary valued at $20 billion, offering a stake of up to 20% to external investors in a move that faced immediate sharp criticism from Europe's UEFA.
Under the plan, the world soccer governing body would establish FIFA Forward Enterprise (FFE), a subsidiary consolidating the organisation's commercial and event operations.
FIFA, which just held a 48-team World Cup across the U.S., Canada and Mexico
that was the biggest in the tournament's history, would retain control of the enterprise, but offer stakes to private investors to raise up to $4.2 billion.
A vehicle founded by Joshua Kushner, the brother of Jared Kushner, U.S. President Donald Trump’s son-in-law, is expected to be a lead investor in the enterprise, a source said.
The proposal deepens the divide between Switzerland-based FIFA and European soccer's governing body UEFA, with Europe positioning itself as the custodian of the game while FIFA, a not-for-profit organisation, remains focused on broadening access with financial largesse.
Under the proposal, FIFA would invite external investors to purchase minority, non-controlling stakes in FFE. It said it would retain sole control as well as "exclusive authority" over football governance, competitions, the match calendar and all regulatory and sporting decisions.
FIFA is one of the world's wealthiest sporting organisations, generating billions of dollars in revenue, largely from broadcasting rights, sponsorship and other commercial deals linked to the World Cup.
But it says the money raised can be used to widen access to the sport and strengthen global participation, with all net benefits to be reinvested in the game.
"Football is the world's most popular sport and an extraordinary engine of human and social development," FIFA President Gianni Infantino said in a statement.
"Parts of the game have turned that popularity into remarkable commercial value – and we celebrate that success and want it to continue, because it lifts the whole game.
"Our job is to make sure the rest of football grows with it: FIFA exists to support sustainable, inclusive development in every corner of the world."
FIERCE CRITICISM FROM UEFA
The proposal drew fierce criticism from UEFA, which said the proposal "crosses a line that football's governing institutions should never cross."
"UEFA takes it extremely seriously," it said in a statement. "So should every National Football Association. So should every stakeholder: leagues, clubs, players, supporters, governments and everyone who cares about the future of the game.
"The soul and governance of football are not assets to trade — especially with zero transparency as to who gains financially. None of us are the owners of football. It is not FIFA's to sell."
UEFA and FIFA have not seen eye to eye on soccer governance in recent years. UEFA President Aleksander Ceferin refused to attend the World Cup final following a series of disagreements over disciplinary procedures, refereeing logistics and match operations.
A FIFA spokesperson said the proposal will soon be presented to the 211 member associations and the FIFA Council, which would be the sole final decision-makers on the matter.
FIFA said money from the capital raise would be used to establish an optional program that would allow member associations to receive additional development funding and access up to $20 million in one-off capital to be used for infrastructure, coaching, national teams, competitions, grassroots football and the women’s game.
It said it aims to increase funding per member association from $8 million to $20 million for the 2027-30 cycle and grow that steadily, targeting $24 million by the 2035-2038 cycle.
Infantino, who is up for reelection as head of FIFA next year, said every member association should have the opportunity to seek a fair share of the available funding to shape its own future.
"This is about the democratisation of football worldwide," he said.
EXTERNAL INVESTORS
FIFA is working with bankers at JPMorgan to bring in external investors, the source said, adding that former Liberty Media CEO Greg Maffei has been involved as a commercial adviser.
Thrive Eternal, a new investment strategy launched by venture capital firm Thrive Capital, is expected to be a lead investor in the entity, the source said.
A permanent capital vehicle focused on making a small number of long-term investments in franchises and cultural institutions, Joshua Kushner-founded Thrive Eternal took a minority stake in Major League Baseball’s San Francisco Giants this year. Former Walt Disney CEO Bob Iger serves as an adviser.
Jared Kushner is not a potential investor, the source said.
"Outside investors will have only a minority stake in FFE and will not play any operational role," FIFA said. "Equally, they are investing in a subsidiary of FIFA, and not in FIFA itself. For FIFA, nothing changes."
(Reporting by Echo Wang, Rohith Nair and Frank Pingue; Editing by Ed Osmond and Rosalba O'Brien)
