Would you sell part of your business to grow it? FIFA nearly did

What FIFA’s World Cup U-turn can teach owner-managed businesses about private equity

For a few days at the end of July, FIFA, football’s governing body, looked set to sell a slice of the World Cup itself. FIFA announced plans to fold the tournament’s commercial rights into a new subsidiary, reportedly valued at around $20 billion, and sell a 20% stake to outside investors led by Joshua Kushner’s Thrive Capital. Within days, UEFA threatened to boycott FIFA competitions completely and senior figures inside FIFA resigned in protest. By Friday, the whole plan had been scrapped.

It’s a very public version of what we have seen happening more and more over the last few years. Should you bring in outside investment and what would you be giving up to get it?

Why do businesses do this?

FIFA’s argument was simple – investment and stronger finances. For a growing SME, it’ll likely be much the same. But there’s another big reason we see and that is succession.

Many business owners reach their sixties with a business worth building on but no obvious person to hand it to. No children who want or maybe none that are ready yet, no management team they trust to run it without them. A private equity deal seems to only viable option.

Why UEFA said no

UEFA’s opposition wasn’t about money, it was about control, transparency and who the business is for. They worried that a minority investor chasing a return would start shaping decisions that affect everyone connected to the tournament, not just the shareholders. UEFA argued that “none of us are the owners of football. It’s not FIFA’s to sell.”

That’s the reason we have chosen to stay independent ourselves. Without outside investors, we can be fully transparent with our clients because our incentives are aligned with theirs. We aren’t chasing the numbers.

What are the pros and cons of private equity?

The things to be aware of with private equity:

1. Control: Even a minority stake often comes with rights attached, things like board seats, veto powers, or reporting requirements that change how quickly and independently you can make decisions.
2. Purpose drift: Outside capital brings outside incentives. An investor is there to grow the value of their stake and exit profitably. Very rarely does that line up with a founder’s original vision for the business, its people, or its customers.
3. Timeline mismatch: PE investors typically work to a three-to-seven year strategy. If you’re building something for the next generation of your family, that clock can create real friction.
4. Cost of exit: Bringing an investor in is the easy part but understanding how and when they’ll exit, and what that means for your control of the business at that point, needs agreeing before any money changes hands.

There are however genuine benefits, such as:

1. Succession where none exists. For owners with no family successor and no management team ready to step up, PE can be the difference between exiting on your terms and having no exit at all.
2. Investment funds acquisitions and new markets
3. Expertise you don’t have to hire. The right partner brings experience scaling businesses, not just money.
4. A staged exit. Selling a majority stake and staying on for a transition period can be far less disruptive, for you and your team, than a straight trade sale.

None of these pros and cons of private equity make this something to avoid or rush into. For the right business at the right stage, for the right reason, it be incredibly beneficial. The most important thing you can do is talk to your accountant or business adviser (like A4G) who can talk you through the process, how to prepare for it and what the right decision is your personal and business goals.

The takeaway for owner-managed businesses

Whether it’s a global federation or a family business built up over twenty years, the questions are the same. What are we selling – just equity, or influence over decisions too? Who benefits if this goes well, and who carries the risk if it doesn’t? Is this the right capital for the stage we’re at, or would a different structure, bank finance, asset finance, or growth funding with fewer strings attached, get us there without giving up a seat at the table?

If you’re worried about succession, or you’re not sure what your sale options are, don’t wait until you’re ready to retire to find out. Talk to an A4G adviser now and go into that decision with a clear view of what’s on the table, not just whoever happens to be buying the year you decide to sell.

Before you get as far as a sale process, it’s worth asking a more basic question: could the business run without you for a month? For a lot of owners, the honest answer is no, and that’s usually the real issue, not the lack of a buyer. It’s exactly what our founder Malcolm Palmer’s book, Making Your Business Less Dependent On You, sets out to help with. A business that doesn’t need you is worth more to a buyer and gives you far more choice over how and when you exit.

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