The recent wrangle ove coverage of the World Cup is only one symptom of the fear that the TV rights boom is over. Alan Tomlinson looks at the ramifications for FIFA
Sepp Blatter, president of FIFA, is the quintessential marketing man, a salesman for sport’s biggest event, the World Cup. You’d think it would be the easiest selling job in the world. Guido Tognoni, FIFA’s top media man for ten years until 1994, once told me: “In FIFA you don’t have to sell the product, it’s a self-seller. FIFA lives from one event, the World Cup, and this event lives from marketing and television receipts.”
Tognoni captured well the basis of FIFA’s growth in the TV age. But recent financial collapses and unanswered questions about the administration of the world governing body appeared to show that Blatter had fouled up the apparently simple task of keeping FIFA’s revenue flowing. No club championship; the collapse of ISL, FIFA’s long-term marketing partner; then the protracted stalemate over the TV rights for next year’s event – many were beginning to think the unutterable. Was the economic boom coming to an end?
The television rights awarded to ISL and Kirch in 1996 covered the 2002 and 2006 World Cup finals tournaments, costed at £650 million for 2002 and £800 million for 2006. This was a lot of money to recoup in selling on the rights, and when ISL collapsed in the summer, Kirch was left to recover what it could of its initial layout. To do so, Kirch sought to withold rights from terrestrial providers and to bring pay-TV companies into a bidding war.
A year-long battle with the BBC and ITV in the UK showed the desperation of the Kirch position. The company initially demanded £171 million for the UK rights for 2002 alone. The BBC and ITV offered just £55 million. The FA’s Adam Crozier called the Kirch figure “obscene”. Chris Smith, then Labour’s culture secretary, gave Kirch short shrift when they hustled him to loosen up the UK “crown jewels” regulations.
Kirch complained that this was unfair trading, that the BBC and ITV were acting together as a cartel. The German company then appealed to the European Union, which refused to act. Peter Salmon, head of sport at the BBC, hailed the final outcome – £160 million for 2002 and 2006 combined, as well as BBC radio rights – as like “settling a football match in the final minute”. At around £1.25 million per match, this could look like a real bargain come 2006, when the tournament is in Europe and hence more easily accommodated in prime-time schedules.
From FIFA’s point of view, however, it might not be enough to steady the rocking ship. Kirch’s Alexander Liegl claimed victory in what he called “the largest sports rights agreement ever signed by the UK’s two major free-to-air television stations”. France 98 had cost the BBC and ITV only £2.7 million each, a price set in 1987. But in truth it was a climb-down. Kirch, among others, were becoming increasingly worried that the market was close to saturation, that the worldwide interest in televised football may have peaked.
Blatter and FIFA had urged Kirch to close the deal. For despite these vast contracts, FIFA finances have become very wobbly. Any threat to the televising of the World Cup would destroy the basis of what Tognoni called FIFA’s “dream of floating money”. Blatter knew this, as he played one party off against another in his campaign to stay in office for a second four-year spell.
When Blatter was elected president in succession to João Havelange in 1998, defeating UEFA’s Lennart Johansson by 111 votes to 80, he had plenty of enemies to placate. The Europeans in particular were aggrieved at what had gone on around the election and hoped to unseat Blatter in 2002. Given the disasters that have befallen FIFA under his control it might be expected that he would face a strong challenge next year.
He had fall-outs with the Asian confederation. He lacked the Havelange style, the gait, the presence, the oomph, the charisma. Things came to a head early this year when ISL, FIFA’s long-term partner, went bust. After the Champions League final in Milan, UEFA top brass announced that Blatter must provide an explanation, or step down. At the subsequent FIFA congress in Buenos Aires, a vote of confidence was called for. Blatter knew this would be a critical moment for his survival. The big European powers had people in the wings, ready to challenge him in a presidential election in Seoul next year. Dr Mong Joon Chung, of South Korea and Hyundai, was one. Or there was the suave Cameroonian and head of the African confederation, Issa Hayatou, recently handed an IOC membership.
In Buenos Aires Blatter stage-managed an astonishing escape-act. He got delegates from Jamaica and other small countries to speak out and remind the big Europowers of FIFA’s crucial constitutional fact – one country, one vote. The big powers had no more power in FIFA than the tiniest member. Blatter moved quickly to call a vote of confidence. FIFA’s general secretary Michel Zen-Ruffinen flapped, reminding him that there had been no roll-call, no proper procedure.
Brushing aside his top administrator, Blatter got his vote of confidence on a show of hands that made militant trade union voting tactics look like pure democracy. The Europeans were outmanoeuvred in classic FIFA fashion, a turning point for Blatter in his fight for survival. “Pure Blatter, brilliant,” conceded Franz Beckenbauer. Blatter might have lacked the presidential gravitas but the streetfighting skills of a lifetime in the business saw him through.
Blatter has still looked rattled on issue after issue. Asked by investigative reporter Andrew Jennings how this year’s World Under-17 Championship in Trinidad had proved so lucrative for FIFA vice-president and Concacaf boss Jack Warner and his family, Blatter stalled for time, committing himself only to a written answer once he had got back to the security of the shores of Lake Zurich. Warner, whose own company handled the travel for the event and who also had the exclusive TV rights, was just another of those Blatter had to keep happy as he logged up the votes should he need them come re-election time.
But that now seems highly unlikely. In October, UEFA suddenly announced that it would not oppose Blatter standing for a second spell as president. Without European support, no African or Asian candidate would stand a chance. Chung told a close FIFA watcher that he had no inkling of the UEFA deal. A European member of FIFA’s executive committee had hinted during the summer that peace was breaking out between UEFA and FIFA.
One legal expert had advised committee members that should FIFA go terminally bust, they would be personally liable. FIFA claims that the ISL debacle has cost the federation “only” 54 million Swiss francs (£23 million) – but you can safely add a zero to that. UEFA may also be backing Blatter as part of a complicated game to keep Michel Platini away from any bid to succeed Johansson as UEFA president.
Whatever the real reason, Blatter looks set to survive. But FIFA is lurching towards Korea/Japan 2002 in a real state of crisis, with widespread tension under his leadership. Blatter is the first FIFA president to receive a salary, the extent of which has never been revealed, though one insider says he has a six-year deal worth $24 million. But FIFA itself is technically broke and needs the security of future TV rights deals to keep the bankers happy and the bailiffs out. Hints from all around the world that the television rights bonanza is over makes FIFA’s financial expansion look shakier than for a generation.
From WSC 178 December 2001. What was happening this month