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UEFA May Start Company to Meet Sales Promise to National Teams

Sept. 7 (Bloomberg) -- European soccer’s governing body may create a separate company to meet a promise made to its member federations to raise $1.5 billion from the sale of qualification matches to Euro 2016 and the 2018 World Cup.

UEFA took control of national team matches involving its 53 member nations for the first time after striking a deal with each federation that ensured higher revenue than under previous agreements. The Nyon, Switzerland-based organization is exploring the option of creating its own company to sell the rights rather than strike a deal with established sports rights agencies, UEFA’s marketing director Guy-Laurent Epstein said.

“There are benefits to do it internally and to do it externally,” Epstein said in a telephone interview, confirming the discussions. “I think it’s a bit premature to weigh any particular directions. I think it will come to a conclusion in the coming weeks.”

UEFA’s plan to sell all rights centrally comes at a time when free-to-air television networks face budget cuts because of the continuing difficulties in the European economy. Last week, the organization’s president Michel Platini said UEFA would meet its commitments even though analysts have suggested it may face a shortfall of as much as 400 million euros ($510 million).

“UEFA wants control of the project and it wants financial guarantees,” said Frank Dunne, editor of TV Sports Markets. “Who out there is in a position to put up the kind of money to underwrite this project? It would be surprise if any single company would underwrite this.”

Contingency Plans

If UEFA fails to achieve its goal, the governing body would have to dip into its 500 million-euro cash reserve. Some of the larger national federations have said such a move would mean money that normally goes to smaller associations for development would be redirected to them, going against the spirit of the centralization program which was designed to boost broadcast revenue for lower tier soccer nations.

Instead, the English F.A. has suggested UEFA keep the sales rights for the host country broadcasts, and hand back so-called second and third party rights to federations. That would allow national associations to sell television rights directly to foreign broadcasters while UEFA retains control of the major agreements.

“There’s no way we’d go back to the national associations and review it,” said Epstein.

More Qualifiers

One of the problems UEFA faces is in assuring broadcasters of the competitiveness of qualification matches for its Euro 2016 event. The tournament, which will be held in France, is being broadened to include 24 countries, meaning almost half of Europe’s national teams will qualify.

One option UEFA is considering is offering the top qualifiers the highest seeding in tournament groups. That would give an advantage to teams that field their best players even after qualification.

“It’s true that the qualification could be question mark,” said Epstein. “We have to try at least to make sure the system pushes people to play until the end.”

To contact the reporter on this story: Tariq Panja in the London newsroom on tpanja@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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