Disclosure: I wrote the linked investigation and it is paywalled, so here is the substance of what I found. The headline figure, as widely reported, is a proposed $4.2bn capital raise at an “initial equity valuation” of $20bn. But FIFA has not said whether that valuation is pre-money or post-money. Here are a few details. • At a $20bn post-money valuation, investors receive 21% of FFE. • At a $20bn pre-money valuation, FFE becomes worth $24.2bn after the investment and investors receive about 17.4%. FIFA has also published no independent valuation, financial accounts, asset list or profit projections for FFE. We do not yet know whether it would own FIFA’s commercial rights or merely license them, or for how long. The second calculation is even more worrying. FIFA’s 211 associations would each be offered access to as much as $20m: 211 × $20m = $4.22bn. That is almost exactly the proposed capital raise. The associations would receive the immediate proceeds and must also approve the structure. There is little disincentive for them to vote no. It's essentially, "Vote yes and get $20m. Or vote no for the love of the game." The funding is for major projects rather than unrestricted payments, and there is no evidence that it depends on how an association votes. But $20m is two and a half times the maximum each association currently receives across FIFA’s current four-year development cycle. There are several further questions FIFA has not answered: • FIFA expects more than $15bn in revenue during the current cycle and held $9.479bn in assets at the end of 2025. Why sell equity rather than borrow, use reserves or fund projects from future revenue? • FIFA says investors will have no operational role but will contribute “commercial expertise”. There is no shareholder agreement explaining board seats, information rights, vetoes, dividends, dilution protection or exit arrangements. • Thrive Eternal, Joshua Kushner’s new permanent-capital vehicle, is already expected to lead the investment group. FIFA has disclosed no tender, competing bidder or investor-selection process. • The Times reports that Gianni Infantino could become FFE’s commissioner or chief executive after his FIFA presidency ends. That would leave his successor regulating competitions whose commercial business could be run by the former president who created it. • Infantino attempted a related deal in 2018: investors would provide $25bn and receive 49% of two proposed competitions. The full scheme collapsed after opposition over secrecy, ownership and the international calendar. The proposal appears legally viable. FIFA’s statutes allow it to exploit competition rights through third parties. But should a governing body create permanent private interests in the commercial growth of competitions that it also regulates, while using almost the entire capital raise to fund the institutions voting on the deal? Probably not   submitted by   /u/LaylaOrleans [link]   [comments]