Why tech investors wanted a stake in the FIFA World Cup
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KEY TAKEAWAYS
- Tech investors see live football as an asset AI cannot easily replicate.
- FIFA's $4.2bn FFE plan exposed major questions over control and governance.
- The proposal is gone, but private capital is unlikely to leave football.
That belief was behind an ambitious proposal to invest billions of dollars into the business surrounding the FIFA World Cup.
Thrive Eternal, a new investment arm spun out of venture capital firm Thrive Capital, was reportedly at the centre of a group of investors interested in taking a minority stake in the commercial side of the World Cup through FIFA's proposed Forward Enterprise (FFE).
The proposal was ultimately taken off the table, but the thinking behind it reveals something bigger about where technology investors believe the value of entertainment could move in an AI-driven future.
Why does AI make sport more attractive to investors?
Thrive Eternal was established in April with a strategy built around assets that possess qualities technology cannot easily reproduce.The firm's thesis is straightforward: as AI becomes increasingly capable of producing films, music, games and other forms of digital entertainment, experiences based on real people, physical competition, tradition and collective identity could become more valuable.
Sport fits that thesis unusually well.
A football match cannot simply be generated by an algorithm. The uncertainty of the result, the atmosphere inside a stadium, the connection between supporters and their clubs, and the cultural identity built around national teams are all part of the product.
The World Cup takes those characteristics to their extreme.
Every four years, billions of people follow the same tournament, often with an emotional connection that has little to do with the commercial value of the event itself.
For investors looking decades ahead, that makes football look less like conventional entertainment and more like a long-term cultural asset.
Thrive Eternal is betting on 'irreplaceable' experiences
Thrive Eternal is led by Joshua Kushner, whose wider investment firm, Thrive Capital, has been a major financial backer of OpenAI.The contrast is notable.
On one side is investment in companies developing technologies that could fundamentally change how people consume entertainment. On the other is a strategy focused on experiences that technology cannot easily reproduce.
Sport sits firmly in the second category.
Thrive Eternal has already invested in professional sport. As part of its launch, it announced an agreement to acquire a stake in the San Francisco Giants, whilst reports have also linked the firm to potential interest in a future NBA franchise in Las Vegas.
Its investment thesis is based on the idea that iconic franchises and cultural institutions rooted in tradition, identity and shared experiences could become more important as technology advances.
Football's global reach makes it an obvious candidate.
Why the World Cup became an investment opportunity
The reported FIFA proposal would have been significantly different from buying a conventional stake in a football club.The BBC understands that discussions involving Thrive began last year, with Greg Maffei, the former chief executive of Formula 1 owner Liberty Media, brought in as a commercial adviser. Former Disney chief executive Bob Iger was also hired by Thrive.
The proposed structure would have involved an initial investment of around $4.2 billion, with the FFE reportedly valued at approximately $20 billion.
According to a source close to the investment group, the investors were not approaching the deal like a conventional private equity fund seeking a quick exit.
Instead, Thrive Eternal was structured as a holding company, with investors prepared to wait potentially decades for a return.
That distinction is important.
The objective was not simply to buy an asset, increase its value and sell it. The proposal was presented as a way of putting substantial capital into football whilst giving FIFA's member associations an economic stake in the resulting enterprise.
Under the proposed structure, each member association could have received an equity stake worth as much as $91 million based on the $20 billion valuation.
Crucially, the equity would have been controlled by FIFA rather than the outside investors. Individual member associations would determine whether to sell part of their stake.
The argument was that the additional capital could ultimately help countries invest in stadiums, training facilities and domestic football infrastructure.
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Read This Next →But did FIFA actually need the money?
This is where the proposal became more controversial.FIFA has described the World Cup as "under-monetised," suggesting there is still significant commercial value that could be extracted from the tournament.
There is certainly evidence that the World Cup is becoming a larger commercial machine.
The expanded 48-team tournament, new sponsorship opportunities, record broadcast and commercial rights, dynamic ticket pricing and additional advertising inventory all point towards further revenue growth.
And the possibility of an even larger 64-team World Cup would create another substantial expansion of the tournament's commercial footprint.
The basic equation is attractive to investors: more countries can mean more audiences, which can mean more broadcasters, sponsors, ticket buyers and commercial opportunities.
But critics question why FIFA would need outside capital to unlock that value.
Christina Philippou, an associate professor in accounting and sport finance at the University of Portsmouth, argued that FIFA is not in a position where it desperately needs external funding.
The organisation already generates substantial revenues and could, in theory, increase distributions to its member associations using money already within the football ecosystem.
That raises a fundamental question: if FIFA can finance its own growth, why give away part of the future upside to external investors?
The bigger issue is control
The financial argument is only one part of the debate.The more complicated question is who ultimately controls the commercial future of football.
Professor Simon Chadwick, who has spent three decades working across the global sports industry, believes the influence of Wall Street and Silicon Valley over football has become increasingly significant.
Investment in clubs, media rights, sports technology and commercial infrastructure has already changed the football business.
English football provides perhaps the clearest example.
Since the creation of the Premier League, football has evolved into a global entertainment and investment industry. Transfer fees, financial regulations, ownership structures and boardroom decisions can attract almost as much attention as the matches themselves.
American investment is also nothing new.
The Glazer family's acquisition of Manchester United more than two decades ago helped illustrate the growing involvement of US capital in European football. Since then, American money has increasingly flowed into clubs across England and the wider European game.
The proposed World Cup investment would have taken that trend to another level.
Instead of investing in a club, investors would have gained exposure to the commercial infrastructure surrounding the world's biggest international football tournament.
Is private capital in football inevitable?
Probably. But that does not mean every proposal will succeed.The economic incentives are simply too strong.
Football owns some of the most valuable intellectual property and cultural brands in global entertainment. It generates recurring revenues from broadcasting, sponsorship, ticketing, hospitality, licensing and merchandising.
Unlike many forms of digital entertainment, football also benefits from scarcity.
There is only one World Cup every four years. There are only a limited number of Premier League matches each season. A club's history cannot be recreated overnight.
That scarcity can make elite sport particularly attractive to investors looking for assets capable of maintaining relevance over very long periods.
The AI revolution could strengthen that appeal.
If consumers eventually have access to almost unlimited synthetic entertainment, genuine shared experiences may become more valuable rather than less.
A goal scored in a World Cup final cannot be replicated simply by generating another video. The emotional significance comes from the fact that it happened, in real time, to real people, in front of millions of other people watching at the same moment.
That is precisely the type of experience investors such as Thrive Eternal appear to believe will retain - or increase - its value.
The World Cup proposal may be dead, but the investment thesis is not
The FFE proposal ultimately disappeared, and Thrive Eternal is understood to respect FIFA's decision.But the underlying investment thesis has not gone away.
If anything, the failed proposal may be an early indication of a much larger debate that football will have to confront.
How much outside capital should enter the sport?
How much commercial control should investors receive in return?
Who benefits when the value of football increases?
And should football's governing bodies use private capital to accelerate growth when they may already have enough resources to fund that growth themselves?
Those questions will become increasingly important as institutional investors, private equity firms, technology billionaires and other financial players look for long-term exposure to sport.
For FIFA, the challenge is not necessarily finding investors.
It is deciding how much of football's future those investors should be allowed to own.
The World Cup may have escaped a $4.2 billion investment deal this time. But the forces that produced the proposal - rising sports valuations, abundant private capital and a belief that live sport could become even more valuable in an AI-driven economy - are unlikely to disappear.
Football may therefore be entering a new phase in which its most important decisions are increasingly shaped not only on the pitch, but in the boardrooms of Wall Street and Silicon Valley.
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