‘Sepp Blatter's Great [Mafia] FIFA Ripoff Circus’ II

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» ‘Book Questions World Cup Business Arrangements’ - New York Times

Sepp Blatter's Great FIFA ripoff Circus

Issue # 127 May, 2010

“Ohmigod – they’re here, in the lobby, with their nasty questions,” panicked FIFA’s general secretary. Confident Sepp Blatter took charge. “Point them to the boardroom, spread them around that huge table so they can’t gang up on us. Take your tie off, look relaxed – and rumple your hair, man.”

And so Herr Blatter and the equally immaculate Jérôme Valcke ripped off their ties, glued warm smiles on their faces and bamboozled 20 foreign reporters into believing that the tickets disaster overwhelming the World Cup in South Africa was the responsibility of somebody, anybody – but not them.

That’s how it looked from the outside. The Almighty Blatter banned me from his press conferences seven years ago, so I have to work from the posed photos of the tieless tousled duo, FIFA’s delusional press release, the uncritical reporting of the 20 handpicked notebooks – and truths in the wider world. I had feared “the elephants” would be ignored. They were.

The meeting with the press was scripted as a matey “media round-table”, implying it was tasteless to pose the questions that should be asked about the problems FIFA have created for the upcoming tournament. In the end Blatter got away with a bland press release that he had “discussed with journalists the latest on football’s showpiece event”.

Blatter and Valcke would have been even happier reading the next day’s papers. More tickets to be dumped in the laps of poor Africans. Poor FIFA will take a hit (they claim), but no mention of yet another blow to the ever-swelling budget – the burden of South African taxpayers. And that was about it. Innocuous reports emailed back to office.

Invisible to the hacks in the FIFA boardroom – so never mentioned in their reports – were three massive monsters, their grey slab backs crushed against the ceiling, their waving trunks casting shadows over the happy gathering.

Two of these elephants, the Mexican brothers Jaime and Enrique Byrom, have been given the exclusive rights to sell World Cup tickets. You’d think that with hundreds of thousands of tickets unsold the hacks would have questions about why the Brothers repeatedly get this business.

The third partner in that jungle trio is a young fellow with an uncanny resemblance to FIFA’s president. That is not a coincidence. Philippe Blatter, the nephew, partners the two Brothers in MATCH, the company with a lock on the corporate hospitality business. They’ve 380,000 precious tickets to sell for top dollar. What a small world is the business of FIFA.

If that’s not troubling enough, pay a visit to the home of Philippe’s Infront company, in the Swiss city of Zug. The lofty glass and steel modern offices formerly housed the ISL sports marketing company. ISL had contracts similar to the ones Philippe also enjoys, minting money by selling half the World Cup television rights to eager broadcasters.

What happened to ISL? They paid $100m in bribes to FIFA and other sports officials for similar television and marketing rights, and collapsed in debt. From Philippe Blatter’s window he sees – 100 metres away – the Zug office of the magistrate investigating who got those bribes. The man who paid them is a close friend of Uncle Sepp.

FIFA’s handout later that day was headed “The fans are our priority”, and that was the end of it. Game, extra time and MATCH to the tousled tieless.

In the boardroom general secretary Valcke had mentioned that MATCH’s high-priced corporate packages were selling slowly. Shortly afterwards the grisly truth was revealed to a South African parliamentary committee. MATCH, whose prices suggest they didn’t notice when the lights went out at Lehman Bros bank, have been significantly abandoned by the corporate world.

Jaime, Enrique and Blatter junior have sold 148,000 hospitality tickets but have a massive 194,000 left on the shelf. Overall, how many tickets are unsold and will likely have to be given away? No figure can be believed because there’s sacks of them stuck with the Elephants’ agents and listed as “sold” – but aren’t. The truth is: probably in excess of 800,000. The most devastating number reflects that, of the 660,000 allocated to diehard fans of the 32 finalists, only 185,000 have been snapped up.

It’s hard to see all the marquees in those magnificent “Hospitality Villages” alongside the stadiums, illustrated in the MATCH brochure, ever being built. Legions of suppliers, chefs and waitresses will be sent away because Blatter’s cronies thought they could bleed the fans during a global economic recession.

When the Bros set up their 2010 FIFA-approved ticket business, travel agents paid $30,000 to enter the ring and guarantee to pay more for a range of games. The result: a daily stream of emails spinning around the planet sent by agents trying to unload unwanted tickets on each other.

Now the Bros, desperate to empty their warehouses of inventory, have created their own parallel black market. Anyone – you, me, the bloke over there in the corner of the bar – could cough up $30,000, become a “sponsor” of a national association and buy tickets with a face value of nearly $80,000.

The smart guys jumped in, got their tickets, chucked away Honduras v Chile at Mbombela stadium, and any similar games, and packaged the better tickets with flights and rooms. (Nelspruit’s Mbombela stadium cost roughly R1bn, and will stage four forgettable round one games over 11 days – and then itself be forgotten.)

Soon hotels may be paying visitors to take rooms. A German travel agent says the Bros and Blatter Jnr and their MATCH company are quietly offering four-star hotels for one-star prices. “It’s a huge dump,” they told me. This agent and their rivals are themselves now big in the dumping business, jettisoning thousands of reserved hotel nights and hundreds of flights.

This hasn’t stopped FIFA’s expensive lawyers chasing South Africans with a sense of humour. The Kulula no-frills airline produced an ad claiming to be “The Unofficial National Carrier of the You-Know-What”.

Wham! In roared FIFA’s thought police, screaming that sponsors were being ambushed and threatening vast financial penalties for illustrating the ad with soccer balls, a player, a Cape Town stadium, the national flag and the dread words “South Africa”.

Days later the airline posted a new ad, headlined “Not next year, not last year, but somewhere in between”. The player had lost his balls and was barefoot, the stadium was unidentifiable.

Why Blatter’s anger? MATCH is charging clients a stupendous $755 for return flights across the country to games. Kulula, charging between $140 and $196, had to be suppressed.

Another number being suppressed is how much Blatter trousers every year. FIFA have just produced its annual report and, as is their custom, refuse to follow best international practice and reveal individual remuneration of those at the top of the organisation.

They won’t disclose expenses and per diems claimed by the 24-member executive committee – but be sure they are huge, and often unjustified. The only figure worth knowing is that after only eight years on the ruling body members get a pension. Last year $12m was put aside for this.

A week ago Blatter revealed how he intends to prevent bribery in the contests to host the World Cup in 2018 or 2022. His brilliant idea has amused the brigade of reporters, consultants, strategists, launderers, spooks, ex-spooks, criminals and charlatans who discuss little else but which of the two dozen voters will pocket bribes, who will pay them and the routes the money will take. The president’s answer? His ethics committee will send a strict letter to the bidders.

If anybody defies him they risk... not very much. FIFA’s toothless ethics enforcers, who have no ability to monitor bidders, no police and no investigative powers are the guarantee of fat city and offshore bank accounts.

But even as the crisis of unsold tickets and unbooked facilities deepened, Blatter had more important things to do, as he manoeuvers to defeat the challenge to his presidency expected next year from Asian football leaders. Blatter turned up in Saudi Arabia – whose “generosity” in football politics is legendary – announcing: “I know very well that the best way to win Arab support for my candidature is to come to Saudi Arabia.”


ROLL UP, ROLL UP!

Will billions of Rands’ worth of 2010 World Cup stadia be filled mainly by South Africans? If so, it will make nonsense of those original promises (which it was deemed “unpatriotic” or “anti-African” to question) that decades of debt would be offset by the World Cup attracting hordes of dollar- and euro-spending soccer fans and tourists.

And if those bearers of our good fortune aren’t coming, it has an awful lot to do with MATCH Hospitality doing its best to temporarily turn South Africa into the most expensive travel destination in the world.

As Fifa’s “worldwide exclusive rights holder of the official hospitality programme”, MATCH has set absurdly high prices for travel and bed and board. European soccer fans booking their trip through FIFA/MATCH accredited agents stand to pay up to ten times what they’d normally expect to fork out when visiting the country.

Other “scare factors” (left to your imagination) are obviously involved, but the FIFA/MATCH hyper-inflation of costs has doubtlessly led to the present situation where ticket sales are a fraction of those projected, and which is having devastating consequences for the local small-scale hospitality industry.

On 11 January, selected overseas travel agents (plus one, unnamed, from Africa) attending a MATCH Hospitality sales agents workshop in Zurich (at FIFA headquarters) were handed a fat document detailing every aspect of handling the needs and wants of travellers to the 2010 World Cup.

The price of four star accommodation, was set at $325-$800 (R2,376 – R5,849) per night’s stay. This is accommodation that would normally cost you R500 to R1000 per night.

While Sun International and its like are not affected (Sun reports that its rooms are fully booked for the period), small operators have been left high and dry – including people who upgraded their self-catering or B&B accommodation to meet MATCH Hospitality’s requirements, in order to be listed on the MATCH website. Many of these in the Cape Town area have now learned, to their horror, that all deals and bookings have been cancelled.

Andre du Toit of Somerset West, who as late as March was assured of 78% occupancy, last month received an email from MATCH cancelling all bookings, and recommending that he do his own marketing. Noseweek contacted twenty other operators in the Somerset West area alone – all had received similar emails.

FIFA, as the likes of Andrew Jennings (see main story) have warned, plays the game according to its own rules, and their game is about making money, money and more money. FIFA’s own profits are guaranteed through sale of TV broadcast rights ($623m); marketing rights ($277m); hospitality rights ($41m); licensing rights ($10).

So if you’re wondering why FIFA, despite all its high-tech infrastructure, was “unable” to disclose exactly how many tickets were still available on 15 April, when public ticket sales were launched, just think sales pitch: “Rush out and buy, or you’ll be left out.” Or would FIFA have other reasons for not disclosing the exact number of available tickets? One expert’s guess is that the number of unsold tickets (as at 15 April) is at least one million.


THOSE MAGNIFICENT MEN & THEIR FLYING MACHINES

Welcome to sunny South Africa, “but kindly make all payments to Zurich”.

The recent excitement about the cost of domestic flights over the World Cup period, and alleged price-fixing collusion between SAA and British Airways/Comair hid the main issue: the overseas bullies behind the price inflation itself. It was MATCH Hospitality that set a fixed price of $755 (R5,520) for its accredited carriers, for all domestic flights during the 2010 World Cup.

As for the recent Kulula spat: Comair as the holding company for both British Airways and Kulula, avoided putting all its eggs in one basket, by signing for MATCH seats on BA flights, and not on budget Kulula. But as regular Kululans know, a Kulula ticket often puts you on a BA flight. Comair’s refusal to sign both their airlines to FIFA/MATCH, must have been the irritant that prompted FIFA to send Kulula that legal letter demanding the airline withdraw its ad announcing themselves as the “unofficial national carrier of you-know-what”.

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Book Questions World Cup Business Arrangements

By Jere Longman, New York Times
Published: April 28, 2010

LONDON — Essentially, two World Cups were awarded to South Africa for 2010. Most visible was the 32-team soccer tournament that is the world’s largest sporting event. Less observable — and more contentious — were business arrangements that have raised serious questions of conflict of interest between the public and private sectors.

A book released Wednesday by the Institute for Security Studies in South Africa, titled “Player and Referee: Conflicting Interests and the 2010 FIFA World Cup,” details six case studies regarding stadium building, official suppliers, bidding practices and government oversight that cast a harsh light on the lack of transparency and public benefit of such arrangements.

The case studies, written by investigative journalists from South Africa and Britain, charge that competing interests among those seeking to benefit financially have left preparations for the 2010 World Cup vulnerable to “manipulation through the use of influence, political pressure, bribes, fraud and extortion.”

Many of these accounts have a familiar ring, addressing issues that occurred at previous World Cups. FIFA, soccer’s world governing body, has regularly faced charges of secrecy and corruption.

Yet taken together, the case studies provide a stark contrast between the stated goals of bringing the World Cup to Africa for the first time — enhancing national identity, increasing the visibility and raising the public perception of the continent’s most developed nation — and the potential for corruption that accompanies such a huge global sporting event.

There seemed “to have been very little in the form of competitive bidding” for lucrative stadium construction contracts, along with suspected price-fixing in the steel industry that led to significant cost increases in the building of the arenas and other infrastructure, the book reports.

The estimated taxpayer bill for stadiums, rail links and other projects has risen to approximately $2.4 billion from $310 million, drawing complaints at a time when South Africa still struggles to provide housing, electricity and running water in parts of the country.

The book refers to a Citibank economic impact study that said FIFA, which stands to generate income of $3.2 billion to $4 billion from the 2010 World Cup, “is the major beneficiary,” while South Africa, the host nation, “carries a disproportionate share of the cost burden.”

Sepp Blatter, the FIFA president, who is attending a convention this week in Dubai, the United Arab Emirates, could not be reached for comment.

As with the 2002 World Cup hosted by Japan and South Korea, there is concern in South Africa about whether some stadiums will become white elephants after the competition ends July 11. FIFA “strong-armed” Cape Town officials to build a stadium in an area where it is little needed, the book says, leading to concerns that Green Point stadium there “will become financially unviable after the World Cup.”

Government oversight is also called into question by the book. Under a shadowy arrangement, it says, the city of Johannesburg, apparently seeking to limit its financial risk, effectively ceded the potential profits from operating the World Cup’s showpiece stadium, 94,000-seat Soccer City, to a little-known company called National Stadium SA.

The book also scrutinizes the companies that will supply official services for FIFA during the World Cup.

Match Event Services, the official hotel and ticketing provider, was awarded its contract by FIFA without public bidding and has marked up room costs by 30 percent, the book says. The company is controlled by a family from Britain, the book says, which means that “a large chunk” of the profits from hotel accommodations will not stay in South Africa.

A related company, Match Hospitality, which has exclusive rights to offer hospitality packages to corporate clients, includes as one of its shareholders a business headed by Philippe Blatter, the FIFA president’s nephew, the book says.

“On the face of it, governments appear to lack agency vis-à-vis the powerful international and corporate elites that have a financial stake in the game,” the book concludes. “Power is disproportionately allocated in favor of FIFA and corporate entities to the detriment of the host governments and their citizens.”

» » » » [New York Times] [ISS: Player & Referee] [Player & Referee (PDF)]

» » [How FIFA €orruption €mpowers G£obal €apital ...]
» » [$occer €ity Tender $ecrets & B£ank €heques...]
» » [FIFA Mafia B£lood$uckers: ¥he €nron of $port... (I)]
» » [FIFA Mafia B£lood$uckers: ¥he €nron of $port...(II)]
» » [FIFA & Mbeki's $3 Billion Elephant Finger to Capetown..]