Contracting with FIFA: We Know Who Has the Leverage

00;00;06;21 - 00;00;39;05
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur and Olympic sports. I'm Mark Conrad or Prof. C, from Fordham University's Gabelli School of Business, where I serve as Professor of Law and Ethics and the Director of the Sports Business Initiative. Contract law discussions make up a large component of my sports law classes.

00;00;39;07 - 00;01;08;22
Mark Conrad
I love to give examples of player contracts, coaches contracts, endorsement contracts, and stadium or arena licenses, to name some examples. One central tenant of contract law affirms that there are few legal parameters to determine what is fair and what is not. That is up to the parties to negotiate and conclude an agreement that they think best represents their interests.

00;01;08;24 - 00;01;39;10
Mark Conrad
Yet there have been more than a few contracts that have been one sided in favor of a particular party. The reason for this is summarized in one word: leverage. In sports as well as other areas of business, leverage is the key reason why a contract favors one side or another. And FIFA, the international governing body of what we call soccer in the U.S., is not afraid of using its leverage at the negotiating table.

00;01;39;12 - 00;02;11;12
Mark Conrad
As many already know, the next men’s FIFA World Cup will take place in North America, and a number of cities in the United States, Canada and Mexico will host games. The championship games location is MetLife Stadium in New Jersey, meaning that the NY/NJ market will have the honor of hosting the final match, watched by billions around the world and probably 70,000 lucky fans who can obtain tickets.

00;02;11;14 - 00;02;43;00
Mark Conrad
Recently, The Athletic Magazine detailed the contract signed between FIFA and the host organizers and as the headline put it, significant concessions were made to FIFA because it had the leverage. And what leverage did it have! Not surprisingly, FIFA, nor the organizer wanted the public to see this contract. It took a Freedom of Information Act request by a newspaper to get all 350 pages of it.

00;02;43;03 - 00;03;13;15
Mark Conrad
I've not been able to see it, so I am taking the information from the article, which admittedly is second hand, but nothing prevents me from believing what has been written. According to the article, the contract gives FIFA near-total control over stadium operations and places a great deal of the costs of hosting squarely on the organizers. In some instances, FIFA's control can extend up to one year following the World Cup final.

00;03;13;17 - 00;03;42;14
Mark Conrad
The contract jettisons the naming rights deal with MetLife during the time of the tournament, and any seating arrangements used by luxury box holders. It requires that any upgrades to the stadium be paid for by the facility owners and not FIFA. More interesting tidbits: FIFA may establish offices free of charge in spaces provided by the host city with “state of the art infrastructure.”

00;03;42;16 - 00;04;08;24
Mark Conrad
No other sports events could be staged in the host city seven days following the final match. A peculiar provision for New York, as either or both the Yankees or Mets would likely be playing seven days after the World Cup final. So it would be interesting to see how strictly this is interpreted. Another gem the host city must use “best efforts” to make public spaces

00;04;08;24 - 00;04;39;13
Mark Conrad
“as attractive as possible.” It's hard for me to make sense out of this one. The New York/Northern New Jersey area has many advantages, but beauty of public spaces is not exactly a category that would rank that high. No one will confuse downtown Newark or Midtown Manhattan for the boulevards of Paris. Those sentiments aside, one can see that FIFA drives one hard bargain and cities are willing to accept it.

00;04;39;15 - 00;04;57;09
Mark Conrad
The World Cup will begin June 11th, 2026. Any thoughts? Send them to me at [email protected]. Thank you for listening. Until next time, this is Prof. C for the Gabelli Sports Business Initiative.