After The Big Clean-up, the power vacuum

The corruption scandal that rocked soccer in the Americas in 2015 gave rise to a power vacuum that saw a handful of opportunistic administrators and powerful agencies seize a foothold in the region. But for all the talk of reform, questions remain over the region's commitment to change.

After The Big Clean-up, the power vacuum

“I saw the opportunity. I didn’t see the crisis.”

When Paraguay’s Alejandro Dominguez (above) became president of Conmebol in January 2016, soccer in the Americas was in disarray. His three immediate predecessors - Juan Ángel Napout, Eugenio Figueredo and Nicolás Leoz - had all been implicated in one of the worst corruption scandals ever to hit world sport. Bribery charges and extradition orders had been handed down by US authorities to dozens of high-ranking officials, and it would be Dominguez’s duty to turn round the image of a confederation for whom illicit dealings had become an alarming fact of life.

“I’m working with my team to transform Conmebol from a 19th century organisation to a 21st century organisation,” Dominguez defiantly told SportsPro’s Eoin Connolly last month. “We’re moving forward in that direction and the big task that we have is to refocus the organisation to have football as an end - and the means would be the money.

“I’m saying this because when I got here I understood that this was managed like a personal business and that the end was money and the means was football.”

With soccer in the Americas reeling in the aftermath of those now-infamous dawn raids at a Zurich hotel in 2015, it has been left to Dominguez and his opposite number at Concacaf, Fifa’s North and Central American confederation, to pick up the pieces.

Like Dominguez, Victor Montagliani came into his presidency knowing that he was assuming a tarnished office, with all three of his immediate predecessors - Jack Warner, Alfredo Hawit and Jeffrey Webb - named as co-conspirators in the US Department of Justice indictment. Like Dominguez, Montagliani knew the reputation of his confederation and its member associations was toxic, and, like Dominguez, Montagliani saw an opportunity to further his own political career within Fifa following the corruption crisis.

In the power vacuum that ensued, both administrators were quick to capitalise, seizing power at a time when the region’s soccer hierarchy had been shaken to its core. But Dominguez and Montagliani weren't the only ones able to further their own interests off the back of the scandal. For agencies previously shut out of the Latin American market, too, the events of 2015 were a golden ticket.

For the best part of three decades, the business of buying and selling marketing and media rights in South and Central American soccer was controlled by a cosy, tight knit clique of companies and businessmen. Three firms in particular - Full Play Group, Traffic Group and Torneos y Competencies - dominated the region, divvying up virtually every prized asset going, including the Copa America, South America’s premier national team competition, and the continent's Fifa World Cup qualifiers. The dominance of this trio was so hard and fast that other agencies were confined to feeding on scraps, unable to penetrate a chummy network that enjoyed a vice-like grip over one of the world’s most lucrative soccer markets.

Nearly two years ago, however, this exclusive club was sensationally exposed by US authorities. Among those named in the first round of indictments were the heads of Full Play, Traffic and Torneos. According to the official paperwork, the three firms had colluded on schemes that enabled them to acquire lucrative media rights contracts at discounted rates by way of bribes and kickbacks totalling more than US$150 million. The schemes were so profitable, it turned out, that the three agencies would fight tooth and nail to win or retain contracts, and when disputes arose between them they even hatched a plan to create a sham company called Datisa, which itself would go on to be named in the US indictment after dishing out yet more bribes for yet more dodgy contracts.

As court proceedings were initiated and guilty pleas unsealed, the long-held dominance of Full Play, Traffic and Torneos quickly weakened. Their leaders were facing lengthy jail terms and their reputations were in tatters. All three companies were thrust into chaos, leading some of the industry’s most powerful agencies - agencies that had bid for and never won the most coveted rights from either Concacaf or Conmebol - to make their move.

Following the demise of Datisa, IMG stepped in at the last minute to sell media rights to last year’s Copa America Centenario, a special centenary edition of the tournament that was conceived by the now-ousted crooks at Conmebol and Concacaf. This February, the agency agreed a deal to market the global sponsorship rights to the Copa Libertadores, South America’s elite club competition, while Soccer United Marketing (SUM), the commercial arm of Major League Soccer (MLS), has sold sponsorship globally for Concacaf since last May, having worked in tandem with IMG to salvage the Centenario.

In January, French firm Lagardere Sports acquired the international media rights to the Concacaf Gold Cups in 2017 and 2019, and a month later the company struck a deal to market Chilean club soccer on a global basis. MP & Silva, meanwhile, picked up the exclusive rights to distribute coverage of Brazil's domestic leagues in the Latin America region last year, having already distributed the rights to the Copa Libertadores, Copa Sudamericana and Copa do Brasil across Asia. It also continues to spearhead the development of the Americas Champions League (ACL), the proposed pan-regional club property that would see teams from North, Central and South America united in a single competition for the first time, and in October the company appointed a new chief executive in the shape of Jochen Lösch, a man who - perhaps not coincidentally - previously worked as president of international business at Traffic Sports Marketing and has spent much of his career based in Latin America.

We will definitely see a different style of making business in the future,” he said. “People are more careful now and they don’t want to get caught.

The arrival of these reputable outsiders has brought much-needed credibility to the region, inspiring optimism in those eager to turn the page on one of the darkest chapters in its history. Together, they are helping Dominguez and Montagliani convince others that times have changed, particularly since both men have introduced more stringent credit and background checks along with expense and reimbursement controls. In an effort to bring about greater transparency, Conmebol and Concacaf’s most important rights contracts are now awarded through open bidding processes run by independent advisory firms, while annual financial statements are being made public for the first time. 

But where the confederations have sought to draw a line under the malfeasance of the past, the agency situation remains entangled in a far more complex web of rights relationships and murky allegiances. When the US investigation came to light nearly two years ago, it was anticipated that Full Play, Traffic and Torneos would be forced to hand back - or at least sell back - their ill-gotten gains. Except that didn’t happen. Though Traffic returned its Gold Cup and Champions League rights to Concacaf, and while Datisa was forced to relinquish the rights to the Centenario after its accounts were frozen by US investigators, many of the rights remained in the hands of their disgraced owners.

Even after Traffic’s founder Jose Hawilla pleaded guilty and agreed to forfeit some US$151 million, and although Full Play’s principals Hugo and Mariano Jinkis remain under house arrest in their native Argentina to this day, both companies continue to honour existing contracts. Traffic still has the marketing rights to the Copa do Brasil and holds agreements with the Caribbean Football Union (CFU) and numerous Concacaf federations, while Full Play has kept hold of the international rights to many national leagues and federations in South America. Torneos remains an active player, too - after sacking its entire management team, the company reached a US$112.8 million settlement with the US Department of Justice in December and divested the shares of its disgraced former chief executive, Alejandro Burzaco. Meanwhile the rights to the 2019 and 2023 Copa Americas remain the property of Datisa.

With each of the disgraced agencies still in operation and uncertainty swirling around the status of certain rights contracts, the reformist overtures coming out of Conmebol and Concacaf are tempered by a prevailing sense that it is business as usual on the agency side.

At last month’s Sportel America media rights convention in Miami, MP & Silva’s Lösch acknowledged how his company, as well as IMG and Lagardere, are "still just trying" in Latin America. Even if Full Play and Traffic are no longer as powerful as they once were, he said, MP & Silva “are still struggling to make a foothold” there, with all three agencies only able to secure deals that, in reality, have little "economic relevance".

Panellists discuss the opportunities for agencies in Latin America at March's Sportel America convention in Miami.

Part of that may be down to the suspicion with which agencies are viewed in the region - Dominguez, for one, says he personally doesn't like middlemen, to the extent that he is “asking that the final customers will come and buy the rights of Conmebol”. But it is more likely to be a cultural thing. Interestingly, Lösch believes that of all the agencies looking to take advantage of the power vacuum, it is in fact Mediapro, the leading Spanish agency, that is “best positioned” to capitalise. "I think this the agency which is the frontrunner here,” he said, speaking on a panel at Sportel titled ‘Power vacuum: Opportunities for agencies in Latin America’. 

Already an established force in Latin America, Mediapro recently snapped up packages of rights from the soccer associations in Uruguay and Bolivia, while it also owns, among other properties, the F1 Latin America channel and enjoys close ties with ESPN in the region. The company might have also claimed the domestic TV rights to Argentina’s top soccer league, the Primera División, had a backroom arrangement not been settled upon whereby US broadcasters Fox Sports and Turner Broadcasting System would be granted the rights on the condition that Clarín Group drop a long-running court case against the Argentine Football Association (AFA).

Indeed, for all that the corruption scandal has brought new blood and talk of reform to Latin American soccer, that Primera División deal only provides fuel for those who doubt whether there is any real commitment to change. At Sportel, the four panellists were asked specifically about the Fox-Turner agreement and whether they thought the culture of doing business, in Argentina and elsewhere in Latin America, had changed at all since the scandal. Their answers were revealing, to say the least.

Pedro Freire, the programming head at Argentina’s TyC Sports, the broadcaster part-owned by Torneos and Clarín Group, described the situation in Argentina as “bizarre” before summing up the culture in his native country by referencing the late Orson Welles, who supposedly said that “anyone who talks about cinema for 20 minutes without talking about money doesn't know cinema”. According to Freire, “it is the same with sport and politics in Latin America”.

Lösch framed it more generally. Asked if the culture of doing business in the region was still based on cosy friendships and nepotism, he said: "Personal relationships will always be importrant, in Latin America more than anywhere else. It's just in the nature of the people. The moment we don't need personal relationships anymore we can all just go home and stop working and just do the deals over the internet." 

But it was what Lösch uttered next that resonated more than anything else. “All those happenings will change the way business is done," he said, "not because the persons [sic] got better character from one day to the other, but because they are more careful now and don’t want to get caught.”