External advisors investigate FIFA corruption culture

13 August 2015 Consultancy.uk

With the FIFA embroiled in controversy over corruption in the upper echelons of its management, the organisation has launched an internal probe to get to the bottom of the issue. In what is a common move by organisations battling corruption charges, FIFA has hired an independent party, Quinn Emanuel Urquhart & Sullivan, to run the internal probe. This is however the second internal probe into possible corruption run by the organisation in recent years, with the first such probe given the run-around.

In recent months the FIFA has come under international scrutiny for alleged corruption that has gone on within the organisations boundaries for some time now. US prosecutors indicted nine former soccer officials – many of whom were employed by FIFA – as well as five marketing officials for the sport. The crime – corruption in the form of more than $150 million in bribes and kickbacks for media and marketing rights, among others.

As part of its own investigation into allegations of corruption within the FIFA, the organisation recently launched an internal investigation into the affair. The internally activated investigation will turn to a third party for independence, with Quinn Emanuel Urquhart & Sullivan, a US law firm, hired to conduct the review. The results of their investigation are, according to sources for Reuters, to be released also to the US authorities.

FIFA - Soccer

A FIFA spokeswoman for the Zurich-based organisation comments: “We are dedicated to improving the organisation, and will continue to strengthen FIFA’s governance and accountability. Our work in this area continuously evolves, and we are focused on achieving the highest standards for the international football community.”

Common practice
Hiring an external and independent party to run an internal investigation is seen as common practice in cases of corruption. Such investigations are often undertaken to show that the company is willingly helping the prosecutors get to the bottom of the alleged offending. “One thing to understand about these internal investigations is how rigorous they are. Really, every company does them,” says Michael Fine, an anti-bribery and compliance expert at the New York consulting firm LRN.

As it stands, FIFA is still acting as though it is the victim of corruption within its ranks, however, this may still change as the prosecutors still have the authority to add the organisation as a defendant if new evidence comes to light and they are no longer satisfied with the organisation’s behaviour, say lawyers in the case. US authorities are continuing their investigation into the allegations and further people may be indicted. The Swiss case too is continuing, with Swiss prosecutors going after possible corruption in the awarding of the World Cup hosting rights to Russia for 2018 and to Qatar for 2022.

FIFA World Cup Russia 2018

 

Earlier probes
The probe by Quinn Emanuel Urquhart & Sullivan is not the first such probe to be launched at the FIFA, with an earlier investigation by Michael Garcia of Kirkland & Ellis, another US law firm, into corruption in awarding the 2018 and 2022 World Cups being given the run around. The Garcia report was though never made public, and Garcia himself was though forced (in protest) to quit his position in December last year after it became apparent that his report was being swept under the table.

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Champions League glory hard to buy for football’s economic elite

15 March 2019 Consultancy.uk

The thrills and spills of knock-out football can still be one of the sport’s great levelling forces, with the Champions League’s second round having shown that the biggest spenders aren’t always able to buy their way to glory. While a league format broadly favours the squad depth of the beautiful game’s richest teams, half of the tournament’s wealthier teams exited in the first one-on-one elimination round.

As the Champions League burst back into life in February, following an agonising winter break, only two of the 16 teams re-launching their Champions League last-16 bid were from outside the so-called Big Five football leagues. With the exceptions of Portuguese champions FC Porto and Dutch footballing powerhouse AFC Ajax, teams from the world’s biggest spending leagues monopolised the second round. As outlined by analysis from KPMG’s Football Benchmark, the Premier League was represented by four teams, with three clubs come from La Liga and the Bundesliga respectively, while Serie A and Ligue 1 both retained two clubs.

This followed a grimly predictable group phase, which had seen the two most expensive squads progress in all but one of the eight collections of four teams. The one team to buck that trend, Ajax, had last won Europe’s premier club competition in 1995, but those halcyon days have long since faded into memory, and Ajax had failed to progress beyond the group stage in 13 years. With the second youngest squad in the tournament, what now seems to be an awakening football giant had some shocks in store for the second round too.

Group Stage values

Despite an impressive Europa League run which saw the team reach the final two years ago, Ajax had not progressed in a Champions League knockout stage tie since the 1996-97 campaign. That all changed this time, as Erik ten Hag’s men overturned a first leg deficit to trounce Real Madrid 5-3 on aggregate. Having felt hard done by in a 2-1 defeat at the Johan Cruijff ArenA, the Amsterdam club cruised to a 4-1 victory at the Santiago Bernabéu, a result which saw the tournament’s fourth most expensive squad crash out to the third cheapest remaining team.

The supremely expensive team, which had won three Champions Leagues on the trot, had crashed out in spectacular style. For many footballing purists, the end of the seemingly invincible Galacticos would have been enough to restore some of their faith in the sport – but there would soon be more schadenfreude to revel in, as a succession of Europe’s most bank-breakingly costly teams would soon join Los Blancos in their exit.

The pick of the bunch was unquestionably Paris Saint-Germain, who forfeited a 2-0 first leg advantage to somehow crash out of the Champions League. The team, who are fast becoming known as the foremost bottlers in Europe, faced a grim dissection in the French press following a 3-1 defeat by Manchester United at Le Parc de Princes. While it would be over-egging it to paint United as ‘giant killers’, the Red Devils squad is worth markedly less than the club bankrolled by Qatari oil money. PSG hold two of the most expensive players of all time in French World Cup winner Kylian Mbappe and Brazilian playboy Neymar.

Second Round values

Elsewhere, the round’s cheapest squad proved further that money is not everything, as Porto overcame Roma (the Italian club has since parted ways with manager Eusebio Di Francesco in the wake of this humbling) – while Juventus battled back to beat Atlético Madrid. The most ‘balanced’ tie of the round, there was a squad value difference of only €22 million between the two squads, in favour of the Spanish giant. With that being said, €113 million of Juve’s price-tag came from the summer acquisition of Cristiano Ronaldo. Ronaldo’s tie-settling hat-trick went to show that money spent in the right place ultimately makes the difference.

Spending wisely

At the same time, there were also four teams which lived up to their large price-tags. Manchester City pummelled Schalke over the course of two legs, hammering the German team 7-0 in the second game. With the largest squad market value in the tournament, the Citizens showed that their spending had not merely been a frenzy provoked by having large amounts of money to throw about – a la PSG – and that every penny had in fact been used to craft one of the continent’s most well-balanced and dangerous teams, to ultimately contend for the title.

Tottenham Hotspur similarly brushed off Borussia Dortmund, while Liverpool eventually overcame Bayern Munich, to leave no German teams in the tournament. Meanwhile, Barcelona similarly did for the French contingent of the Champions League, bundling out Olympique Lyonnais 5-1.

Operating Revenues

Going forward, the humbled economic superpowers of European football will take solace from the fact that their huge operating revenues will allow them to buy up talent which has emerged in this year’s Champions League. With Real Madrid having re-installed Zinidine Zidane as Head Coach, the club has already committed itself to spending big in the summer, cashing in some €50 million of its €743 billion revenue stream from last year to sign Éder Militão from Porto – who has impressed in this year's Champions League – in the summer.

Whether the PSG project is financially sustainable in the long-term remains to be seen, meanwhile, but with a huge portion of commercial revenues including shirt-sales from the club’s array of superstars, it will likely also seek to bring in more big names in the summer. The club was reportedly in the running to sign Ajax star Frenkie de Jong, before Barcelona finally secured his services from the end of the season.

The likes of Ajax will meanwhile face an uncomfortable wait, as a range of its new crop of outstanding players inevitably attract the attentions of Europe’s top spenders. With the lowest operating revenues of any team left in Europe, the club will face an uphill struggle to hang on to the likes of teenage captain Matthijs de Ligt. However, it would not be the first time that the club has been plundered for its top talent, and what Ajax and clubs of its size can take forward is that with the right eye for lower-key recruitment, they can rebuild, and still challenge Europe’s elite.