JPMorgan faces football reckoning as FIFA’s US$4.2bn deal collapses

JPMorgan has been left exposed by the collapse of FIFA’s plan to raise US$4.2bn from private investors, placing fresh pressure on the bank’s judgement five years after the European Super League failure.FIFA abandoned the proposal following opposition from major confederations and internal figures. The governing body had planned to sell a 20% stake in a new commercial business at a valuation of about US$20bn.UEFA said: “The World Cup cannot be treated as an investment product. It is one of football’s greatest sporting legacies. It has been built over generations by players, national teams and supporters across every continent.“No part of it should ever be surrendered to private investors. The World Cup is not for sale.”JPMorgan had been appointed to advise FIFA on the transaction and prepare the financial case for the new company, known as FIFA Forward Enterprise.The entity would have held commercial rights connected to FIFA competitions, including broadcasting, sponsorship, ticketing and licensing. FIFA would have retained control, while outside investors received a minority position.Thrive Eternal, an investment vehicle established by Thrive Capital founder Joshua Kushner, was expected to lead the investor group. Former Liberty Media chief executive Greg Maffei was also advising FIFA on the project.The proposed US$4.2bn capital raise was intended to support an expansion of FIFA’s development spending. Member associations could have received an optional one-off payment of up to US$20m for infrastructure and other projects.JPMorgan’s involvement intensified the criticism because of its role in financing the proposed European Super League in 2021. The bank later acknowledged that it had misjudged how the project would be received by supporters and the wider football industry.The latest collapse raises further questions over the bank’s ability to assess political, governance and stakeholder risk in football transactions, particularly when financial structures affect control of major competitions.European opposition presented a direct threat to the economics underpinning the US$20bn valuation. UEFA’s 55 member associations had threatened to boycott FIFA competitions if the investment proposal proceeded.The absence of leading European national teams would have weakened the value of FIFA’s broadcast, sponsorship and ticketing rights, undermining the assets that JPMorgan was helping to market to investors.FIFA’s decision to withdraw the proposal means the bank will no longer proceed with one of the largest attempted private capital transactions in international sport.JPMorgan must now manage another high-profile football mandate that ended after widespread resistance to the underlying commercial model.