Sports

Witness Says Inside Information Helped Fox Win World Cup Rights

When the news broke a dozen years ago that Fox had been awarded the U.S. broadcast rights for the 2018 and 2022 World Cups, many in television, and in soccer, were surprised. For decades, the sport’s showcase championship was the exclusive domain of ESPN, which had been instrumental in driving interest in the world’s most popular game in the world’s richest sports market.

But according to a government witness testifying this week in federal court in Brooklyn, Fox didn’t acquire those tournaments on merit alone.

Instead, said Alejandro Burzaco, a former sports marketing executive from Argentina, an executive working for the media giant used inside information obtained from a powerful FIFA official whom he was secretly bribing for years — and who controlled the committee that made final decisions on TV deals — to give Fox a decisive edge in what the other bidders, including ESPN and NBC, thought was a blind auction.

“He said, ‘If Fox puts up $400 million, then it will win,’” Burzaco recalled being told by the FIFA official, Julio Grondona, in testimony Friday in federal court. The figure nearly matched the price reported on the day FIFA announced that Fox had won the rights.

The testimony of Burzaco came during the second trial of individuals and corporations charged in the Justice Department’s long-running investigation of corruption in international soccer. In 2017, a jury found two South American soccer officials guilty of racketeering and other crimes as part of what prosecutors called “endemic” bribery and money laundering in the sport. Burzaco, who pleaded guilty in 2015 for his own role in the scandal, also testified at that trial.

In the current case, the government’s focus has pivoted away from the officials who ran soccer at the time to the media rights deals that are the financial lifeblood of the game.

Two of the current defendants, Hernán López and Carlos Martínez, served as executives at Fox International Channels, which controlled rights to two of South America’s most popular tournaments, the Copa Libertadores and the Copa Sudamericana. Prosecutors have for years maintained that those rights were acquired for far below market value thanks to millions of dollars in bribes paid annually to the continent’s top soccer officials, a scheme organized by Burzaco with, prosecutors contend, the full knowledge of López and Martínez.

The third defendant in the current trial, Full Play Group, is an Argentine sports marketing firm that prosecutors said used bribes and other back-room deals to win commercial rights to friendly matches, World Cup qualifiers and South America’s continental championship, the Copa América.

Fox Corporation, which broadcast the recent World Cup in Qatar and holds the rights to the 2026 tournament in North America, existed under a different corporate name and structure when the bribes took place and is not on trial in Brooklyn. When allegations about Fox’s potential involvement in corrupt acts emerged during the first trial, the company denied any knowledge, calling any suggestion to the contrary “emphatically false.”

It has continued to distance itself from the bribery, and the former Fox executives, this week. “This case involves a legacy business that has no connection to the new Fox Corporation,” a company spokesman said this week. The spokesman noted that Fox International Channels, the subsidiary accused of involvement in bribes, and many other units that were part of a company then known as 21st Century Fox, were sold in 2019.

Attorneys for the three defendants have declined to comment on the current case, as did a spokesman for the U.S. Attorney’s Office for the Eastern District of New York.

Burzaco, who was indicted and pleaded guilty to racketeering and other charges in 2015, is the Justice Department’s star witness. A former banker who admitted to paying at least $160 million in bribes over a 15-year period, he took the stand Wednesday and is expected to testify well into next week. To date, the government has called only one other witness, a FIFA representative who testified briefly about the governance structure of global soccer, as well as the codes of ethics that the sport’s officials pledge to respect.

So far, this trial has been lacking in some of the headline-grabbing fireworks that characterized the 2017 edition, when, for example, a former Argentine public official committed suicide by throwing himself in front of a train only hours after being described as a bribe recipient in court, and Burzaco said that Qatar had bribed three South American officials to ensure it would host the 2022 World Cup.

On Thursday, the government’s lead prosecutor, Kaitlin T. Farrell, began asking Burzaco about how Qatar managed to acquire those rights despite its obvious problems with climate and infrastructure. But after defense attorneys objected, Judge Pamela K. Chen shut down that testimony, ruling that it was not relevant because none of the defendants are accused of being involved in the World Cup hosting decision.

A courtroom sketch showing Alejandro Burzaco, left. He testified Friday that a former FIFA official, Julio Grondona, shown on a board at right, helped tip Fox officials on how much to bid for the broadcast rights to the World Cup.Credit…Elizabeth Williams/Associated Press

Instead, Farrell has focused on the long and tortured relationship between the Argentine firm Burzaco led, Torneos y Competencias, and the Fox unit with which it had entered into a joint venture to control soccer rights. What started as bribes to a handful of South American soccer officials had, by 2011, expanded to nearly a dozen men who threatened to cancel lucrative contracts for the popular Copa Libertadores and Copa Sudamericana tournaments — which had been sold for far under market value — if they did not receive their annual bribes.

In 2010, Burzaco said, he told López about the bribes at a beachside hotel in Florida, where both men had traveled to watch the Super Bowl. Burzaco testified that he told López a second time during a meeting in Fox’s corporate headquarters in midtown Manhattan later that year. In 2012, after Martínez took over the unit’s Latin American operations, Burzaco said he filled him in on the bribes over coffee at a Dean & DeLuca cafe in Rockefeller Center.

One of the primary recipients of bribes was Grondona, who at the time served as a FIFA vice president, the chairman of the soccer body’s finance committee and the president of the Argentine soccer association. According to Burzaco’s testimony, when FIFA in October 2011 opened bidding for the English language rights to the 2018 and 2022 World Cups, López reached out to him to tell him Fox planned to bid. López, Burzaco said, then asked him to reach out to Grondona “to let him know that any help would be welcome.”

Burzaco, eager to help his primary commercial partner, which helped keep Torneos solvent by hiring it to produce sports content throughout Latin America, did as he was asked. Grondona, he recalled, said he would do what he could but that it would be difficult because FIFA was under intense scrutiny in the wake of its controversial votes a year earlier awarding World Cups to Russia (in 2018) and Qatar. Regardless, Grondona soon relayed the news that the rights were as good as Fox’s.

“Mr. López was very excited,” Burzaco recalled on the stand, saying López called it his “best accomplishment within Fox.” According to Burzaco, a number of other Fox officials, including Chase Carey, then in line to take over the company, and the Fox Corp. chairman Rupert Murdoch himself all expressed delight at having acquired the prize.

As for Grondona, he summoned Burzaco for a private meeting in Buenos Aires immediately after awarding the World Cup rights to Fox.

“‘Look, Alejandro, I did this favor to you and Fox,’” Burzaco recalled him saying. “‘But this is the last time I do it for free.’”

Grondona, who had been one of the primary targets of the Justice Department investigation, died of an aortic aneurysm in July 2014. Seven months later, FIFA announced that Fox had been awarded rights to the 2026 World Cup, too. This time, ESPN hadn’t even been allowed to bid.

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