The football governing body plans to invest in sports and entertainment technologies as it transforms into more of a commercial company.
Football world governing body FIFA plans to bump up investments in sports and entertainment technologies as it gears up to be the event coordinator for the 2026 World Cup, which is slated to be the largest sporting event in the history of sport.
The next men’s World Cup is projected to generate $11bn for FIFA. By comparison, the last football tournament in Qatar generated $7.5bn. The next championship will be bigger with 48 teams competing instead of the usual 32. One hundred and four matches will be held in the three host countries of Canada, Mexico and the US.
As the event coordinator, FIFA stands to make billions of dollars in revenue from sponsorships and media rights. Part of this money may be used for VC investments. “It generates a tremendous record amount of revenue for FIFA,” says Samir Gandhi, partner at law firm Sidley and former FIFA Task Force Lead, who spoke at the GCVI Summit in Monterey, California, last week.
“FIFA is going to take those funds, put it back into the game through its member associations, and potentially invest in innovations to fund the game.”
FIFA VC investments include virtual assisted refereeing, turf field technologies for countries that don’t have the ability to have real turf fields, and wearables including artificial limbs.
Michael Spirito, founding partner of sports tech investor Sapphire Sport, called the sports and entertainment sector a “trillion-dollar ecosystem” on a separate panel discussion. Corporate limited partners in his fund include team ownership groups, Adidas, Madison Square Garden, Sinclair and Bank of Montreal.
FIFA joins several other sports organisations that have started to invest in startup technologies to stay abreast of the changes in how fans watch and engage with sports. The advent of technologies such as streaming, virtual reality and wearable health technologies is transforming the sports sector.
Tennis Australia, the tennis governing body in Australia, and the 49ers, a professional American football team based in the San Francisco Bay Area, are examples of sports organisations that have formed venture teams to invest in startups as they seek to broaden their fan base.
“With the accessibility of streaming and the penetration into a number of countries, you’re going to see more people watching the World Cup than ever before,” said Gandhi. “FIFA has the ability to potentially have everybody in the world either coach, watch, manage or play the game. It’s a tremendous amount of penetration and potential opportunities to expand the sport as well as generate revenue.”
Historically, FIFA has not used the World Cup, which takes place every four years, as a long-term revenue generator. As it draws more revenue from the tournament, it is seeking to grow beyond its previous limited role as a governing body and position itself as an entertainment company with longer term media contracts.
“You’re seeing greater FIFA investments in entertainment and sports properties with their streaming platform. As well as investing in greater production facilities around the world, FIFA is going to use this opportunity to not just be a federation that governs the sport but to turn itself into an entertainment company,” said Gandhi.
