September 15, 2015 / 10:55 PM / 2 years ago

FIFA received no profit sharing from 2005 contract: letter

ZURICH (Reuters) - Soccer world governing body FIFA was due half of the advertising revenue from a 2005 media deal it signed with a Caribbean soccer organization but did not receive any of it, according to a termination letter sent by FIFA.

The logo of FIFA is seen in front of its headquarters in Zurich, Switzerland July 20, 2015. REUTERS/Arnd Wiegmann

The contract was signed between FIFA and the Caribbean Football Union and involved media rights in parts of the Caribbean for the 2010 and 2014 World Cup competitions.

In the July 2011 letter, reviewed by Reuters, two FIFA officials wrote to the Caribbean Football Union to say they had expected FIFA to receive 50 percent of all revenue from the sale of broadcast sponsorship and TV commercials.

“To date, FIFA has not received any payments,” wrote FIFA’s Secretary General Jerome Valcke and its Marketing Director Thierry Weil.

Media contracts can be extremely lucrative for FIFA and other sports organizations because of the enormous number of people who watch events such as the World Cup and the advertisements that go with them.

It could not be determined how much money was at stake in this instance. Reuters was unable to obtain a copy of the contract.

A FIFA spokeswoman declined to comment, citing ongoing investigations, but said FIFA was continuing to cooperate with those investigations.

Swiss authorities have said they plan to investigate the 2005 deal, after a television news report that FIFA sold the media rights to the Caribbean organization for far below market value.

The Swiss are already investigating how FIFA awarded the 2018 and 2022 World Cup hosting rights.

Caribbean Football Union General Secretary Neil Cochrane said in a statement that the group’s current executive committee has no knowledge of contracts signed by its previous leader, Jack Warner, and that those contracts had not been ratified by the group’s governing congress.

Warner declined to comment on Tuesday.

U.S. authorities threw FIFA into turmoil in May when they disclosed an indictment against nine soccer officials and five sports marketing executives on charges including racketeering, money laundering and wire fraud. U.S. authorities said the men orchestrated multi-million dollar bribery schemes over 24 years.

On Saturday, FIFA defended its handling of the 2005 contract after Swiss broadcaster SRF reported that Warner transferred the media rights to a company he controlled and then resold them in a deal worth between $15 million and $20 million. In a statement, FIFA, citing the revenue-sharing provision, said it had been promised more than an up-front fee and accused the Caribbean group of failing to meet its financial obligations.

According to FIFA’s termination letter, the Caribbean soccer group was delinquent on other payments to FIFA as early as December 2009 and was in breach of the contract as early as 2007 with regard to a sublicense. It was not clear whether FIFA considered terminating the contract before July 2011.

Warner was indicted in May in the United States on charges that he solicited bribes for other soccer-related contracts he controlled. He has said he did nothing wrong and has vowed to fight extradition from Trinidad to New York.

SRF also reported that FIFA President Sepp Blatter signed the 2005 contract himself. Blatter has not been charged by U.S. or Swiss authorities with any wrongdoing.

Warner has said previously that he received World Cup media rights since 1998 for nominal fees in exchange for helping Blatter win his position. FIFA has said that is not true.

Reporting by Mark Hosenball in Zurich; Additional reporting by Simon Evans in Miami; Writing by David Ingram; Editing by Noeleen Walder

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