RESOLVING THE LEDGER
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See the full story · 1 sourcesJoshua Kushner runs the investment group behind the plan to buy a minority stake in the World Cup [Getty Images]
Fifa has been forced to U-turn on plans to sell off a slice of the World Cup after fierce opposition, with threats of future boycotts and calls for the governing body's president, Gianni Infantino, to quit.
But why were a group of tech investors interested in the World Cup in the first place, and are similar proposals in the future inevitable?
In a world in which AI could upend human recreation and pastimes, executives at Thrive Eternal, a spin-off of venture capital firm Thrive Capital, saw an opportunity to lead a group of investors to place cash in the biggest sporting competition on the planet.
The football World Cup was seen as the latest in a new strategy from firm, which believes that sport will not only survive the AI revolution, but grow in value.
Run by Joshua Kushner, the brother of US Donald Trump's son-in-law and adviser Jared, Thrive mainly invests in technology companies developing artificial intelligence (AI) and it has been a major financial backer of OpenAI.
But in April this year, the New York City-based entity created the new investment arm Thrive Eternal in order to invest in areas that have "qualities that cannot be replicated by technology".
Sport is central to that strategy, and that is where football - and securing a minority stake in the World Cup under Fifa's proposed Forward Enterprise (FFE), - became an opportunity.
The view is that the tradition, cultural and identity aspects of football will protect the sport from being upended by AI compared with other forms of entertainment such as movies and music, which are already seeing the technology start to replace humans.
Professor Simon Chadwick has worked in the global sports industry for 30 years, including working with both fan groups, football clubs and governing bodies Fifa and Uefa.
He said investment interests and commercialisation in general meant a lot of decisions were being made on behalf of football and fans "in Wall Street and Silicon Valley".
"It is almost as though it's crept up on us and a lot of people haven't really thought about what's happening," he told the BBC.
While it raised governance questions for Fifa, he added: "Whether people like it or not, private equity investment in sport is happening."
Uefa says boycott may still go ahead as FA withdraws Infantino support
Faisal Islam: Four reasons why Fifa's World Cup plan never stacked up
Despite this summer's World Cup, hosted by the US, Canada and Mexico, providing an clear picture of World Cup commercialisation, the BBC understands talks over the FFE proposal involving Thrive started last year, with former Liberty Media boss Greg Maffei brought in as a commericial adviser for his experience in buying the commerial rights for Formula 1.
Thrive also hired former Disney chief executive Bob Iger.
Thrive Eternal already invests in other sports. As part of its launch, it announced it had agreed to buy a chunk of the San Francisco Giants baseball team There are also reports the firm is eyeing up a bid for a new BA franchise in Las Vegas.
It believes that such "iconic franchises and cultural institutions rooted in tradition, identity, and shared experience" will not just survive the AI revolution, but "will matter even more", according to its website.
Kushner and Thrive Eternal have remained silent on the Fifa investment plan and the subsequent fallout.
But a source close to the firm told the BBC the strategy behind the plan, which would have required the backing of Fifa's member associations, was that it would not be like a "typical investment fund looking for a speedy return on investment".
The source said investors preparing to stump up the $4.2bn (£3.1bn) initial investment were doing so with the view of not seeing any return for a "long period of time - decades", due to Thrive Eternal being structured as a holding company.
They higlighted had the FFE proposal been activated, it would have given each member association a stake worth as much as $91m each based on its $20bn valuation - stressing that the equity would be controlled by Fifa, not investors, and to sell part of that equity would have been down to individual member associations.
"The idea of outside investment...was to channel more resources upfront to countries that wouldn't typically get access to outside funding - so they could invest in things like stadiums and training to be able to develop their game domestically," the source said.
According to Fifa, the aim of FFE was "to separate the business of football from the governance of the sport".
In England, the business of football has exploded, especially since the establishment of the Premier League, so much so that the financial rules, transfer deals and boardroom gossip have become just as popular conversation topics between fans as the action on the pitch.
US investment in football is not new, and the amount of American dollars being poured into English and other European clubs has been growing broadly since the Glazer family bought Manchester United more than two decades ago.
But some question where Fifa - and the World Cup - needed this cash injection.
Fifa has claimed the World Cup is "under-monetised", but hydration break adverts, dynamic ticket pricing and record broadcast and sponsorship rights have put the 2026 edition on track to generate record revenues.
The 48-team tournament and potential for an even bigger 64-team competition gives a view of further commercial opportunities. More countries equal more viewers, which equals more money.
Christina Philippou, an associate professor in accounting and sport finance at the University of Portsmouth, said the approach by Fifa to seek outward investment had been seen in other sports and b...
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