The Justice Department has signed off on the first $32.3 million tranche of over $200 million in forfeited funds to FIFA and others from widespread corruption in the securing of TV and other media and marketing rights for international soccer.

Justice said well over that initial amount has been seized as part of the government's prosecution of that corruption. The money is being remitted to FIFA, the world soccer organizing body; CONCACAF, which oversees soccer in North and Central America; and CONMEBOL, which oversees South America, as well as various other soccer federations.

According to Justice, sports marketing companies paid bribes and kickbacks to soccer officials in exchange for the rights to various tournaments and events.

The $32.3 million is the beginning of the process of getting funds to the victims of the FIFA bribery scandal and out of the hands of the corrupt officials that took it.

“Not one official in this investigation seemed to care about the damage being done to a sport that millions around the world revere," said Michael J. Driscoll, assistant director-in-charge of the FBI’s New York Field Office. "The only silver lining is the money will now help underprivileged people who need it, not the wealthy executives who just wanted it to get richer. Our work isn’t finished, and our promise to those who love the game – we won’t give up until everyone sees justice for what they’ve done.”

This week's initial tranche of money comes from the forfeited assets and stems from a May 2015 indictment of 14 FIFA officials and sports marketing executives with racketeering, wire fraud and money laundering, plus a follow-on indictment of even more officials.

Many of the defendants were ordered to forfeit their ill-gotten gains and Justice is authorized to distribute forfeited assets through a remission process to victims of the crimes, including to the soccer organizations defrauded by corrupt executives.

Being outbid by upstart streaming sports company DAZN for Italian rights to Serie A soccer wasn’t a sign of weakness for Comcast’s European satellite TV juggernaut Sky, but rather another hint that the company is focusing more on returns on invested capital (ROIC) rather than merely chasing growth, Bernstein media analyst Peter Supino said in a note to clients.

Sky Italia, Sky’s Italian satellite TV arm, has held exclusive Serie A rights in that country for years, but lost out to DAZN, which bid €2.5 billion over three years to carry the games. Shortly after, Sky Italia said it would reduce its workforce by 25% over the next four years, part of a restructuring that would save about €300 million.

“The decision to not pay over the odds for sports rights in the midst of a pandemic, will likely cost Sky subscribers and revenue growth, but is evidence of a more prudent mindset and a test of Sky's role as a content aggregator,” Supino wrote. 

Whether that strategy extends to English Premier League rights, currently under negotiation, is still up in the air. But Supino pointed out that both Sky and British Telecom have “reduced their willingness to pay inflated fees for sports content” over the past few years. The U.K. segment of EPL rights sold for about £4.5 billion in 2018, down from its peak of £5.1 billion in 2015. While that downward trend could continue, the potential of other players like DAZN, Amazon, Netflix entering the bidding could drive up prices. 

Supino and other analysts have been cautious of Sky ever since Comcast bought the British company in 2018 for $40 billion, a pseudo-consolation prize after it dropped its bid for Fox programming assets, which were eventually won by The Walt Disney Co.  Most analysts were worried at the time that entering the traditional satellite video business in Europe, when the rest of the world seems to be focusing on streaming, was a risky move. That stance hasn’t changed.

Also Read: Italian Soccer’s Secret Weapon 

Former Sky CEO [now executive chairman] Jeremy Darroch had a plan to boost EBITDA at the Sky unit to $4 billion over the next few years, and Supino believes that new CEO Dana Strong should achieve that goal and then some. Strong had been CEO of Liberty Media’s Virgin Media units in the UK and Ireland and according to Supino, “earned her spurs” while she was head of Comcast’s Consumer Services unit, boosting margins from 39.7% in 2018 to 42.1% in 2020, and reducing capital intensity by 300 basis points during that period. 

The loss of Italian soccer will likely result in a loss of subscribers, but will also dramatically reduce its sports costs. Sky Italia is currently negotiating with Serie A for non-exclusive rights to about 30 % of games, so it won’t be entirely without soccer. Those rights will cost about €100 million per year, instead of €780 million, Supino estimated.

Even if churn doubles to 1.5 million customers at Sky Italia over the next three years, the satellite company can still increase EBITDA. Supino estimated that customer losses would result in a £690 million hit to revenue compared to 2018, but not having to pay for soccer would still result in a 14% increase in EBITDA to £391 million in 2024 from £342 million in 2018. 

The analyst added that the subscriber losses probably won’t be that dramatic because Sky Italia customers will still be able to access the games on the DAZN app, which is available on the satellite company’s Sky Q streaming platform. An increase in churn from 10% to 15% (about 700,000 customers) over the period would result in EBITDA rising to £605 million in 2024, according to Supino. 

 In that Xfinity Flex-like scenario, more Sky Italia customers are happy because they can still access the games via the DAZN app, and the distributor is happy because as an aggregator, it doesn’t have to weather the fees. 

“Under this scenario, margins widen significantly despite top line contraction,” Supino wrote. 

Discovery Communications’ European sports network Eurosport won its fight to stop the largest satellite TV service provider in Germany from marketing itself as the exclusive home of Bundlesliga soccer, after a German court issued an injunction against Sky Deutschland, adding that the satellite service mislead consumers.

The Regional Court of Cologne, 31st Civil Chamber issued the injunction late Monday. According to the ruling, the court found deceptive consumer practices in Sky Deutschland’s campaign “Every Game, Every Goal” regarding its coverage of Bundesliga soccer. Sky Deutschland had been the exclusive provider of Bundesliga soccer until last year, when the league opened up bidding for its games to other providers after the Federal Cartel Office, Germany’s anti-trust agency, initiated the “no-single buyer rule” for rights to the matches. Eurosport has the rights to 40 Bundesliga games, while Sky Deutschland airs 572 of the 612 games each season.

Sky Deutschland is a subsdiary of Sky plc, which is in turn controlled by 21st Century Fox. The German ruling comes as Fox awaits word from U.K. regulators on whether it will be allowed to buy the remaining interest in Sky plc it doesn't already own. That decision is expected to be announced on June 29.

“Discovery has an obligation to ensure fans understand which Bundesliga matches they can watch, when they can watch them, and where,” Discovery Networks Deutschland said in a statement. “With consumers at the core of our business, we therefore felt it necessary to take action against Sky Deutschland, who have blurred the lines between fact and fiction, stating that all matches in the upcoming season will only be available on Sky’s platforms. A claim that Sky has been making that is complete fiction and in our view detrimental and confusing, to millions of sports fans throughout Germany.”

Beginning in August, Discovery Networks Deutschland will air every Friday night primetime match, five Sunday afternoon and five Monday evening matches exclusively, as well as the Supercup and four relegation games. All of the matches will be available through Discovery’s direct-to-consumer offering, the Eurosport Player, on the TV screen, computer and mobile devices.

“We look forward to continuing our strong partnership with the DFL and showcasing football to the highest standards for football fans in Germany,” Discovery Networks Deutschland continued in its statement.