Why the FIFA Scandal Could Mean a Major Cash Boost

This story first appeared in the June 19 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

FIFA’s pain could be Fox and NBCUniversal’s gain. As the FBI expands its criminal probe into the bidding process for the 2018 and 2022 World Cups, which were awarded controversially to Russia and Qatar, respectively, pressure is mounting on soccer’s governing body to reopen the bids. That would be good news for Fox Sports and NBCU-owned Telemundo, which hold U.S. broadcast rights for both tournaments. Fox agreed to pay more than $400 million for English-language rights, with Telemundo shelling out $600 million. Those amounts represented substantial increases from the $100 million and $325 million ESPN and Univision paid, respectively, for the previous FIFA deal.

“There would be loud demands for some renegotiation [of those contracts]” if impro­prieties were found in FIFA’s handling of the bids, says Claudio Aspesi, analyst at Sanford C. Bernstein. In Europe, some are calling to renegotiate deals or even drop the 2018 and 2022 World Cups from TV if the bidding isn’t reopened in the wake of FIFA president Sepp Blatter stepping down. Chris Bryant, an MP in Britain’s Labor Party, told parliament June 5 that FIFA was a “stinking sink of corruption that has polluted everything it has touched” and that British broadcasters BBC and ITV should not make broadcast payments until it has been reformed and the bids rerun. Sources close to the European Broadcasting Union, which negotiates World Cup rights collectively for public broadcasters across the Continent, say several EBU members are pushing to rene­gotiate deals if vote-rigging is proved.

Even if deal terms stay the same, Fox and Telemundo, both of which declined to comment, could score if the location of the 2022 World Cup moved (it might be too late to change the 2018 event). The U.S. was a frontrunner to host the 2022 tournament before FIFA surprisingly chose Qatar, where summer temperatures can reach 120 degrees. If the bidding is reopened and the U.S. wins, Fox and Telemundo would benefit from matches scheduled for the American primetime audience, which would mean higher ratings and ad premiums. In addition, the Qatar tournament was moved to more temperate November and December, which is problematic for Fox and its NFL schedule, and presumably would be moved back to summer in a different location.

FIFA so far has insisted the ’18 and ’22 Cups will go ahead as planned, but Domenico Scala, chair of its audit committee, told a Swiss newspaper June 7: “If evidence should emerge that the awards to Qatar and Russia only came about thanks to bought votes, then the awards could be invalidated.”

This article originally appeared on The Hollywood Reporter.

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