Fox Denies Soccer Bribes, Says Didn't Control Accused Entity

(Bloomberg) -- 21st Century Fox Inc. denied a government witness’s allegation that its sports division paid bribes to win television rights for international soccer tournaments.

Fox had no operational control of the business that a former sports marketing executive was referring to in his testimony in a U.S. corruption trial, the company said in a statement. “Any suggestion that Fox Sports knew of or approved of any bribes is emphatically false,” Fox said.

Alejandro Burzaco, the ex-executive, implicated some of the world’s biggest broadcasters, including Brazil’s Globo and Mexico’s Grupo Televisa SAB, in corruption in soccer TV rights during a trial of three former executives of FIFA, international soccer’s governing body. Asked by a federal prosecutor in Brooklyn, New York, what Fox Sports hoped to gain by winning the broadcasting rights, Burzaco said the company wanted to use “the TV rights to expand its Fox signal in all of the Americas, from Argentina to the U.S.A.”

The allegations come at a sensitive time for Fox. The media giant is trying to persuade U.K. regulators to allow the acquisition of full control of Sky Plc, the satellite-TV provider. The U.K.’s Competition and Markets Authority is looking into issues of corporate culture at Fox, including sexual harassment allegations at Fox News, as part of its review of 11.7 billion-pound ($15.4 billion) bid for the rest of Sky.

Globo’s Denial

Globo’s press office in Brazil denied the allegations and any wrongdoing. The company said it doesn’t “make or tolerate any bribe payments.” Globo said it conducted internal investigations and concluded that no payments that hadn’t been specified in contracts were made.

“Globo Group will make itself fully available to the American authorities so that everything is clear,” the company said. “For Globo, this is a question of honor.”

Televisa said in a statement that it “in no way knew of, or condoned, any bribe or other improper conduct.”

FIFA Scandal Spreads as Asia Official Admits Taking Bribes

Jurors at the trial were shown what Burzaco, who was the chief executive officer of sports-marketing company Torneos y Competencias SA, called a “sham” $3.7 million contract that was actually a cover for bribes. Torneos and its partners used the money to pay FIFA officials like Julio Grondona, head of Argentine soccer, to extend broadcast rights from 2015 to 2018, Burzaco said. Grondona died in 2014.

Burzaco testified that his company and TV Globo and Televisa broadcasters paid $15 million to Grondona, the then-president of Conmebol, the South American soccer federation, so he’d grant them "the TV, Internet and radio rights for the World Cup 2026 and 2030." He said it was paid to a Julius Baer account in Switzerland.

He also testified that Grondona and two other Conmebol officials allegedly got bribes of more than $1 million from Qatar’s soccer authorities to award the country the 2022 World Cup.

The ex-Torneos CEO said that in 2002, his company formed a sports-marketing partnership with Fox Sports called Fox Pan American Sports and held a 50 percent stake. By 2005, Fox expanded its stake in the joint broadcasting venture to 75 percent, he said. Fox has said that in 2008, Fox Pan American Sports was majority owned by a private equity firm that controlled its management and operations.

The 2008 contract described by Burzaco as a sham was signed by James Ganley, whom Burzaco said was aware of the bribes. Ganley, former chief operating officer of Fox Pan American Sports, was named in a 2016 U.S. lawsuit in which Fox executives were accused by a U.S.-based television channel, GolTV, of paying tens of millions of dollars in bribes to FIFA officials.

Ganley’s lawyer said any contention he was aware of wrongdoing is false.

“Mr. Ganley has a well-earned reputation as a highly accomplished and ethical business executive,” the lawyer, Benedict P. Kuehne, said in an email. “He was never aware of or signed any fraudulent contracts.”

Cooperating Witness

Burzaco was the head of Torneos from 2006 until his arrest in 2015. He’s the first of several cooperating witnesses who’ve pleaded guilty and are seeking leniency by testifying for the U.S. in the trial in Brooklyn.

A former Citigroup Inc. banker, Burzaco said he started investing in media broadcast companies in South America in the early 1990s, raising his net worth to about $30 million. 

He told the jury that he regularly paid out hundreds of thousands of dollars -- sometimes as much as $1 million a year -- in bribes to South American soccer officials. Burzaco said the money was funneled to accounts in Asia and Switzerland. Sometimes, he said, he handed out cash, with U.S. dollars tucked into an envelope or stuffed into a bag.

The three men on trial were among the recipients, Burzaco said.

The defendants are Jose Maria Marin, 85, the former head of Brazil’s federation and once on FIFA’s organizing committee for the Olympics; Juan Angel Napout, 59, a Paraguayan and former FIFA official who was president of South American soccer’s governing body; and Manuel Burga, 60, a Peruvian soccer official and former member of FIFA’s development committee.

©2017 Bloomberg L.P.

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