Nobody Wants This: FIFA Edition

If you're writing a blog on any kind of regular cadence you know that the summer months might give you an opportunity to relax a bit, write about a less demanding topic, muse about something, or "clear out your notebook" (looking at you, Dan Primack of Axios). This was supposed to be that kind of post. I certainly did not expect to be writing about FIFA in the context of private equity again for another four years.

Life, however, had other plans, as FIFA spent five days in late July staging a spin-off to a beloved Netflix show: it announced a $4.2 billion deal with private equity investors, watched the entire football world go berserk, and pulled it before a single member federation got to vote. Nobody wanted this. Not UEFA, not CONCACAF, not the Asian Football Confederation, and, as it turns out, not even FIFA's own COO, who told reporters the whole thing was "a project of one person."

Quick recap for anyone who spent late July doing something more relaxing than reading Axios Pro Rata: FIFA announced plans to create FIFA Forward Enterprise (FFE), a new commercial subsidiary that would sell up to a 20% stake to outside investors — led by Joshua Kushner's Thrive Eternal — at a $20 billion valuation. Five days later, the deal was dead. UEFA threatened a full boycott, Infantino's own senior adviser resigned, and FIFA withdrew the proposal at dawn, before it even got to the vote it had promised its 211 members.

The easy read is that this was a communications blunder — a rushed rollout, some unfortunate Kushner-family optics, a deal that needed better PR and a slower drumroll. I don't think that's right, and I think the reason is more interesting than the deal itself.

Chronicle of a Death Foretold

Here's the thing that surprised me when I checked FIFA's statutes: Infantino didn't legally need that vote. Article 59 gives FIFA's Council broad authority to decide how competition rights get exploited. That gave Infantino, as president of the council, a lot of leeway. The requirement that a majority of the 211 members approve FFE wasn't a rule Infantino was bound by. As I wrote in my previous article – FIFA is in the rights game. The vote was a promise Infantino made presumably because he understood something that a strict legal reading wouldn't tell you: having the right to do something and having the standing to do it without blowing up the institution are two entirely different things.

Yes, FIFA owned the rights. But what it didn't own was the organizational capital to sell equity in itself without every stakeholder who wasn't in the room revolting the moment they found out.

See, this is not a story about title. It's a story about the gap between legal authority and practical executability — and if you've spent any time in the lower middle market, you’ve probably recognized this gap immediately, you’ve probably never watched it sink a $20 billion deal in five days flat.

There Has to Be Another Way

I don't think a friendlier version of this deal gets it closed either. Go read what UEFA said, before and after: "the soul and governance of football are not assets to trade." That's not a note on deal terms. It’s a redline. FFE also didn't help its own case — the structure bundled the sale of commercial rights together with the operational delivery of FIFA's own tournaments, which is a meaningfully different (and far more governance-adjacent) proposition than simply monetizing broadcast and sponsorship rights, something FIFA has done successfully for decades.

So, does that mean sports governing bodies and outside capital just can't mix? Not necessarily, and I wouldn’t file this under "some things shouldn't be for sale" so quickly. Formula One is the counterexample that works. The FIA kept full sporting and regulatory control of the sport. The commercial rights got spun into a wholly separate company — first under Bernie Ecclestone, then CVC, now Liberty Media — via a long-term licensing and royalty arrangement, not an equity stake shared with national motorsport federations. Nobody at the FIA had to sell a piece of the governing body itself.

The NBA and NHL run a version of the same logic domestically: both cap how much of a team institutional / private capital can own (which, coincidentally, is the exact mechanism that let Qatar's sovereign fund take a piece of Monumental Sports & Entertainment last December without anyone crying foul). Structures that keep private equity strictly on the commercial side of a hard line have a real track record. Structures that ask a member-governed body to sell equity in its own decision-making apparatus don't.

This situation played out in the music industry many times before, but never so spectacularly and in precisely the same way as in the Taylor Swift – Scooter Braun saga. When Braun's Ithaca Holdings bought Big Machine Label Group in 2019, it acquired the master recordings to Swift's first six albums. Nobody disputed the title, not even Swift. What she did instead was a brilliant business move to express her disapproval: she re-recorded the albums, redirected her fans' streams and dollars to the new versions, and spent five years making the asset Braun's buyers (Shamrock Capital) legally owned less valuable. By the time they sold the masters back to her in 2025, the $360 million price tag was by some accounts barely above what they'd paid. Owning the rights and owning the revenue streams turned out to be two different transactions, and only one of them ended up being for sale.

Going back to Thrive Capital, Mr. Kushner wasn't wrong that sports rights deserve permanent capital instead of a standard fund's seven-year clock — that thesis is sound, and Thrive’s Giants stake proves it can work when the seller has clean title to sell. Where he miscalculated was in trusting that one man at the top of an institution would be able to secure legitimacy across the entire organization.

That particular failure mode is one the lower middle market solved a long time ago, at a much smaller multiple. Any PE operator who's closed a deal with a family-owned or founder-led business has run into the same temptation Infantino did, albeit at a slightly different scale: the founder signs, the founder holds legal title, the founder can bind the company — and none of that tells you whether the founder's brother running operations, the GM who's been there for eighteen years, or the customer base that only trusts the family name on the door is actually coming along for the ride. Justin Ishbia, who's built Shore Capital Partners into one of the most active buyers in the lower middle market with over 1,000 control deals, standard fund structures, and no permanent-capital exception, summed it nicely: "We often say, you have one reputation, use it wisely." This is not a platitude. Reputation with a founder is only as important as the reputation with everyone the founder answers to — the leadership team, the employees, the vendors, the community — and it's how you avoid discovering, 18 months post-close, that the legal owner was never the constituency you needed.

For GPs looking at sports and sports-adjacent assets, the operative question isn't "can we negotiate our way to stakeholder buy-in." It's a narrower one, and it's the same one savvy LMM operators ask on every founder deal: does everyone whose cooperation this truly needs know they're at the table, or did you only secure the signature of the one person legally required to give it? FIFA found out the hard way that those are two separate questions, at $20 billion.