McKinsey examines FIFA's $25 billion global football overhaul

10 December 2018 Authored by Consultancy.uk

As FIFA continues to try and find support for controversial plans to initiate two new global tournaments at club and international level, McKinsey & Company has been drafted in by prospective financiers of the contests, to ensure the viability of the potential investments. With European football chiefs still opposed to the plans, SoftBank is keen to know if the $25 billion investment plan is of merit, or whether to withdraw.

To say the global governing body of professional football is no stranger to sparking wide-spread and divisive debate is an understatement, perhaps on par with an armchair pundit suggesting “that Messi has a decent left foot.” FIFA might represent the planet’s sport of choice, but a series of institutional scandals and botched projects has often seen it court controversy, if not full-on outrage in recent years.

Despite having ousted its long-standing President (the disgraced Sepp Blatter) in 2015 and implementing a three-year campaign to redeem its public image since then, FIFA has struggled to escape the perception that it is more interested in raking in cash than it is in maintaining the 'beautiful game'. This was not helped by the institution’s hosting of the most expensive World Cup of all time in Russia in 2018, or its persistence with the idea of holding the tournament in Qatar in 2022, despite the nation’s blistering heat, low league attendances, and similarly questionable human rights record. 

McKinsey examines FIFA's $25 billion global football overhaul

Now, FIFA's incumbent leader, former UEFA General Secretary Gianni Infantino, has further provoked ire with his controversial plans to forge a new World Club Cup and a World League of National Teams. While Infantino has billed these projects as key institutional innovations which can help drive FIFA forward, the appetite for the proposals from Europe in particular remains muted at best.

Those who cast their minds back to the year 2000 will remember that launching a full World Cup-style tournament for clubs proved far too taxing when FIFA last attempted this. The 2000 tournament was intended to be an inaugural edition of a recurring contest, but scheduling conflicts between different leagues meant that it was regarded largely as a nuisance by Europe’s footballing elite, and the follow-up in 2001 was subsequently shelved.

FIFA’s current Club World Cup model sought to avoid further issues by scaling back the tournament to one team per continent, and to an extent this has been successful. Critics have subsequently been left wondering why Infantino and FIFA are so keen to revert to a failed model, then, other than for the sake of stretching out the potential revenue yielded by the tournament. At the same time, the idea that FIFA would hold its own Nations League tournament has caused similar bemusement, with many European clubs and federations seeing it as an unwelcome competitor of the successful League of Nations that UEFA initiated in September.

With this in mind, the financing of the duo of tournaments is being tightly scrutinised. The Japanese conglomerate SoftBank has presented a proposal to finance these competitions up to $25 billion dollars over twelve years, but with the noted hostility toward the plans, the firm has mandated consulting giant McKinsey & Company to “evaluate its offer”. SoftBank reportedly "backed off" from an initial 60-day deadline it gave FIFA to conclude talks about the tournament plans, and is keen to be sure its huge investment is of merit, or whether it would be best to withdraw.

According to the Financial Times, SoftBank had said it would cancel its proposal if no agreement has been found at the end of the meeting of the FIFA Council held in Kigali, Rwanda, on October 25 and 26. However, at this meeting, a decision on the creation of these competitions was postponed until spring 2019. If Infantino "tries to force an agreement” in the meantime, its European council members are reportedly "prepared to walk out of the discussions." As the stalemate continues, McKinsey’s intervention could make or break the future of the two contentious tournaments.

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