World Cup bonus fight exposes battles over Canada Soccer transparency, governance

TSN.ca
July 13, 2022
Rick Westhead

Canada Soccer president Nick Bontis dropped to his knees in desperation.

He was meeting for the first time to talk money with a half dozen veteran players on Canada’s national men’s soccer team and the discussion was not going well.

It was early evening on June 4 and Bontis had gathered the players in a conference room in Vancouver’s JW Marriott Hotel to plead with them to lower their demands. (Four sources independently confirmed details of the meeting.)

The Canadian men had qualified for their first World Cup in 36 years some three months earlier and Canada Soccer was about to reap a windfall -- a bonus for qualifying of about $10 million (U.S.) from FIFA. The players, who had spent several years criss-crossing the globe in pursuit of the World Cup berth, wanted what they considered their fair share of that bonus.

Embedded ImageThe players, who had agreed to split a $1 million payment for playing qualification games, still didn’t have an agreement in place that set out what they would earn if they qualified for Qatar.

The players were asking for an after-tax payment equivalent to 40 per cent of the coming eight-figure payout.

The U.S. Soccer Federation has announced that, starting with the 2022 men’s World Cup and the 2023 women’s tournament, qualification and bonus money will be shared equally among the members of both teams. The federation will pay the men and women 90 per cent of the money it receives from FIFA for the next two World Cups.

Australia, meantime, has agreed to pay its men’s national team players 40 per cent of its World Cup qualification bonus, The Sydney Morning-Herald reported.

“You don’t understand our situation,” Earl Cochrane, Canada Soccer's acting general secretary, told the players.

Bontis explained that Canada Soccer couldn’t afford to pay the national team players what they want because of a contract the organization signed in 2019 with a private and little-known company called Canada Soccer Business (CSB).

That deal, Bontis said, is leeching away the lion’s share of Canada’s Soccer’s revenue.

The players were unmoved. A few muttered “bulls--t” as they walked out of the room. Bontis followed them down the hall.

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Soccer Canada deputy general secretary Earl Cochrane and president Nick Bontis
Despite two subsequent meetings with players that evening, no deal was reached. And while the Canadian men resumed training after refusing to play a friendly match against Panama on June 5, the players and Canada Soccer officials remain at odds over the World Cup bonus money.

The players wrote in an open letter titled “Dear Canada” that they want transparency from Canada Soccer over its contract with CSB.

“The very least the players deserve from Canada Soccer is openness and honesty,” said Julian de Guzman, the former captain of the Canadian men’s national team who now works as a TSN soccer analyst.

“What these players do during qualification for tournaments like the World Cup is physically and mentally exhausting. I remember flying into a Central American city for a Canada game and people with guns were escorting us from the plane to a bus, and there was a reason they had guns. One time it was so dangerous we did our training on the top of a hotel instead of at a field. Then there are days you’re playing on a pitch that is hot and rock hard and you’re pulling out weeds from the field that are as tall as you are. It’s brutal. And then you get the call later to play again for your country and you do it all over. There has to be an appreciation for what these players do, for the sacrifices they make.”

Bontis did not respond to multiple requests for comment for this story and none of the men’s national team players, who to this point have negotiated with Canada Soccer without legal representation, agreed to be interviewed about the disagreement.

The impasse and the players’ public demand for an audit of Canada Soccer’s finances and details of the CSB contract have captured global media attention and invited scrutiny of the national federation’s executive leadership team.

A review of more than 1,000 pages of Canada Soccer internal briefing notes, team budgets, emails, and business contracts, in addition to interviews with 31 current and former Canada Soccer executives, board members, men’s and women’s national team players, player agents and corporate partners, paint a picture of an organization that has lurched between internal battles over transparency and governance for years.

In the weeks since the men’s national team refused to train and play against Panama, players have continued to press for details about the ties between Canada Soccer and CSB, a relationship whose origin story begins a decade ago.

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In October 2012, the Canadian men’s team was blown out 8-1 by Honduras in a World Cup qualifying game. It was one of the most embarrassing losses in the program’s history. During the months afterwards, Canada Soccer’s newly elected president Victor Montagliani and his staff began to formulate a plan.

Montagliani (who is now president of Concacaf, the 41-nation soccer confederation for North and Central America and the Caribbean) told board members and staff he had three long-term goals for Canada Soccer: to qualify for the men’s World Cup; to host a men’s World Cup; and to establish a credible domestic men’s professional league.

His goals were ambitious. In October 2014, two years following the crushing loss in Honduras, the men’s team’s FIFA ranking dropped to No. 122, its worst ranking ever.

“Faith and hope were lost,” said de Guzman, who retired in 2017.

The notion of building a domestic pro league must have seemed out of reach a decade ago. Men’s soccer in Canada was at a low point. In addition to the struggles of the men’s national team, Canada Soccer in 2015 had stripped the semi-professional Canadian Soccer League of its sanctioning after the RCMP investigated the CSL for alleged match fixing. (The investigation did not lead to charges being laid.)

Scott Mitchell, the chief executive of the Hamilton Sports Group, which owns the Canadian Football League’s Hamilton Tiger-Cats and Canadian Premier League’s Hamilton Forge, said in an interview that he told Montagliani at the time that he could find investors who would be willing to pay the $1.5 million buy-in price for a franchise in a new professional soccer league and fund several years of losses if they could assure new team owners there was a path to profitability.

By May 2017, Canada Soccer’s board ratified the new Canadian Premier League with plans for the league to begin play in 2018. (The CPL played its first season in 2019 with seven teams.)

Mitchell and Montagliani conceived a program styled after one that flourished for years between the United States Soccer Federation and a private U.S. company called Soccer United Marketing (SUM).

Owned by Major League Soccer team owners, SUM was founded in 2002 after no U.S. broadcasters had bid for the English-language rights to the 2006 and 2010 Men’s World Cups. Since then, SUM has bought the rights to tournaments including the men’s and women’s World Cups, packaged them with MLS games, and sold the broadcast rights to U.S. television networks.

Until U.S. Soccer ended its relationship with SUM last year, SUM sold the marketing and media rights to the U.S. national teams for almost 20 years, paying the U.S. Soccer Federation as much as $30 million per year, The New York Times reported.

Several Canada Soccer board members said in interviews with TSN over the past month that Montagliani assured them in 2015 and 2016 that the business model would also flourish in Canada.

The CPL’s franchise owners would own CSB, which would make annual payments to Canada Soccer. In exchange, CSB would receive the revenue from selling broadcasts and sponsorships of Canada Soccer properties, including the national teams, to help fund the CPL.

On Jan. 1, 2019, six months after FIFA awarded the 2026 World Cup to Canada, the U.S. and Mexico, Canada Soccer and CSB signed a nine-year contract, a partnership that indirectly affects both the men’s and women’s national teams.

“At the time, in 2018, it wasn't like a lot of people were beating down our doors to get involved,” Cochrane said. “And [CSB] were the ones at the table. And the deal is what it is. There are open matters that we're discussing with them all the time… I'm confident that we can continue to build on that partnership that we've created. And if there are open issues, we're going to discuss them like partners generally do and try to find resolutions.”

The agreement obliges CSB to pay a guaranteed fee to Canada Soccer annually between 2019 and 2027 in exchange for the rights to sell both broadcasting and corporate sponsorship rights to the men’s and women’s national teams.

In 2019, that fee was $3 million, according to a copy of the contract obtained by TSN. The guarantee climbs each year, topping out at $3.5 million in 2027. The contract, which is signed by Steve Reed (Canada Soccer’s president from 2017-20), says CSB has the right to extend the deal for an additional 10 years and if it triggers that extension, must pay Canada Soccer at least $4 million per year from 2028 to 2037.

Reed did not respond to a request for comment.

CSB, for its part, is responsible for paying production costs to broadcast CPL and Canadian national team games. Under an agreement with the Chinese-backed Spanish media company Mediapro, most CPL and national team games are broadcast by the streaming service OneSoccer.

While Canada Soccer keeps all ticket revenue from national team matches staged in Canada, the contract says CSB keeps all revenue from sponsorships. That means the money from a newly signed multi-year contract with CIBC, which sources say is worth as much as $5 million per year, will go straight to CSB.

“The most ridiculous part of all of this is the timing,” said a Canada Soccer executive who requested anonymity because they didn’t have permission to speak publicly about the federation.

“In the summer of 2018, Canada Soccer knew it would host the 2026 World Cup and knew there would be so many Canadian and international companies wanting to do huge sponsorship deals with the federation. And we also knew by then that we had a pipeline of great young talent coming up. By the fall of 2018, Alphonso Davies was already playing with Bayern Munich and Jonathan David was in Belgium. So, with all of that promise of long-term money and talent on the horizon, why would Canada Soccer do a deal that locks us in for 20 years? It has destroyed morale in the federation.”

Five current and former board members said that the CSB deal was not properly approved by Canada Soccer’s board. The board members said the agreement was only approved subject to the board being provided with details about CSB’s finances and ensuring that Canada Soccer had representation on CSB’s board. Those conditions were not met, the board members said.

“We jumped off a pier into the unknown,” Gerald MacDonald, a Canada Soccer board member from Prince Edward Island from 2007-2019, said in an interview.

Ryan Fequet, an environmental regulator in Yellowknife who was a Canada Soccer board member from 2007 until May of this year, said Canada Soccer should terminate its contract with CSB.

“The board recognized this was a s--t deal right from the start,” Fequet said. “You should know about an organization you are partnering with if you are giving them literally all of your marketing rights. And every time we have asked for information about Canada Soccer Business, the board has been shut down. The board absolutely did not approve this contract.”

Canada Soccer’s board discussed the prospective deal with CSB during a September 2018 board meeting. Fequet said Bontis joined the meeting via conference call from Aruba.

According to Fequet, several board members told Bontis and Reed that the board wanted a number of questions answered before they would approve the contract. But three months later, when the board reconvened in December 2018, Bontis insisted that the board had approved the deal.

When Fequet said requests made by the board were outstanding and asked for a review of the meeting minutes from September, board members were told that an executive assistant had not made an audio recording of that meeting because of equipment problems.

Fequet pointed to France's professional soccer league as an example of how severing ties to CSB might work.

In 2018, France’s Ligue 1 signed a $1.5 billion per year broadcast contract with Mediapro, a deal the league said would help to narrow the gap between Ligue 1 and its larger-budget rivals in Spain, Italy, and England.

When the COVID-19 pandemic shuttered leagues around the world in early 2020, Mediapro skipped making a 172 million Euro ($228 million) payment that was due to be paid to Ligue 1 in October 2020, the Financial Times reported, and sought to renegotiate its rights fee with French professional league. Mediapro founder Jaume Roures said at the time that COVID-19 had “changed the equation.”

Ligue 1 refused to budge on its contract and Mediapro walked away from the deal.

CSB was scheduled to pay $3.05 million to Canada Soccer in 2020. But because national team games and other events were canceled due to the pandemic, CSB said it would not make that payment in full. Cochrane confirmed that CSB paid Canada Soccer about $1.2 million that year.

“This is one of those open matters we're discussing,” Cochrane said.

Fequet argues that the incomplete payment provides Canada Soccer with an opportunity to break the contract.

“CSB did not pay what it was obligated to pay. This is our last chance to get out of that deal and there’s no question we have the authority to cancel the deal,” Fequet said. “I’m willing to share all of this now because I literally have not been working at this for 15 years to see all of the hard work go down the hole and back to the Dark Ages.”

Cochrane disagreed with Fequet.

“There's a parallel in that this is pandemic related and it's parallel that it has happened in the same sport, but I think the situation and the nuance of whatever happened in France is likely significantly different from what happened here,” Cochrane said.

Cochrane did not elaborate on the alleged differences.

Mitchell, who in addition to his job with Hamilton Sports is also chairman of CSB, said there’s no way that CSB would agree to terminate its contract with Canada Soccer. CSB paid for broadcast rights to properties including men’s and women’s national team games that never happened in 2020 because of COVID-19, he said.

“We have been more than fair with what we have paid,” Mitchell said in an interview.

Player agent Courtney James, whose clients include men’s national team members Samuel Piette and Doneil Henry, said he understands the anger of national team players but says they also should accept a measure of responsibility for not taking more of an interest in the business of Canada Soccer before now.

“The players need to understand the business,” James said in an interview. “Their complaint about the CSB contract is a little naïve. If they had a union, they might have been able to have a say. But it’s tough to fight a deal after the fact. Maybe they should be spending their time talking about starting a union now. Airing the dirty laundry like this just doesn’t look good. The fact is that years ago Canada Soccer bet against the men’s team when it accepted the guaranteed money. Now, everybody is surprised that the men’s team has done as well as it has, and everybody wants a piece.”

There may be more dirty laundry to come.

During a Canada Soccer virtual board meeting in January, Bontis and Cochrane outlined plans to work with the city of Vaughan, Ont., on a feasibility study to explore the construction of a national team training centre -- a home base for the men’s and women’s national teams.

Fequet said he pointed out during the meeting that the building would likely cost more than $100 million and that no request for proposals (RFP) had been publicized for other cities to consider. Bontis responded that Canada Soccer had been discussing the subject for four years and it was too late to commission an RFP, Fequet said.

Bontis announced on May 12 that Canada Soccer would conduct a joint feasibility study with the city of Vaughan to explore building such a centre. Not only did he do so without giving other Canadian cities an opportunity to compete for the project, the organization also did so without consulting its partner Canada Soccer Business about how much revenue might be generated selling naming rights to the training centre.

“How are they deciding to build a new national training centre in Vaughan without an RFP (request for proposal) or proper consultation?” said Leanne Nicolle, who was a Canada Soccer board member from 2017-2020. “You ask this question and it’s silence. Nobody wants to answer the hard questions. There was an absence of transparency.”

Cochrane confirmed Canada Soccer did not issue an RFP.

“It’s just not the way it evolved,” he said. “We had a discussion with the city of Vaughan, and we kept that discussion going… We haven't finalized anything with Vaughn other than the fact that we're determining whether it's financially feasible for us to be there.”

Board-level disputes related to governance and transparency boiled over two years ago during the hiring of Canada’s national women’s team coach, Nicolle said, and prompted her to resign from the board.

Nicolle said she was shocked to learn via the media in October 2020 that Bev Priestman had been hired to replace Kenneth Heiner-Møller as the national women’s team coach.

In the months before that announcement, the Canada Soccer executives Reed, Bontis and Peter Montopoli had interviewed former Canadian national team player Rhian Wilkinson for the coaching position.

The last Nicolle said she had heard, Wilkinson, a member of Olympic bronze-medal-winning teams in 2012 and 2016, had been offered a four-year contract to succeed Heiner-Møller. She later learned that the offer to Wilkinson had been rescinded after Wilkinson pressed Reed to know how much money there would be to pay for assistant coaches and other staff.

Wilkinson confirmed to TSN that she was offered a contract.

“I pushed for clarity on the salaries previous male coaches of the women’s team had been paid when they had been first hired, and I asked for assurances on staffing,” she said in an interview.

After Wilkinson was dropped from consideration, Reed, Bontis and Montopoli agreed to hire Priestman without seeking the approval of Canada Soccer’s board, Nicolle said.

“Hiring a national team coach is a big decision,” Nicolle said. “When John Herdman was hired to coach the men’s team, the board discussed and debated before approving that hire. That didn’t happen with the women’s team coach. This was a failure of the board and it’s a recurring theme with Canada Soccer. When people ask for transparency, there is a complete absence. A coach offered a job asks for transparency and then doesn’t get the job. I resigned from the board because issues like this drove me crazy. There is reputational risk to being a member of that board.”

Cochrane said Canada Soccer’s board created a selection committee to conduct a search for the new women’s team coach during a June 9, 2020, meeting and gave the committee full authority to make a new hire.

The six committee members included Montopoli, Reed, Bontis, and Canada Soccer board member Charmaine Crooks. A Canada Soccer spokesman said the federation did not have permission to disclose the committee’s other two members, who include a former women’s national team player and an official who works with the federal-government-funded Own the Podium program.

Cochrane declined to discuss Nicolle’s allegations.

“I'm not going to discuss personal employment details publicly,” he said.

Players on Canada’s national women’s team say they struggle even now to obtain details about Canada Soccer’s revenue and expenditures beyond what is provided in public reports.

Canada Soccer spent $24.5 million (Canadian) on the men’s national team from 2018-2021, compared to $18.4 on the women’s team, according to the federation’s annual financial statements. Over the same four years, Canada Soccer received $10.4 million from Sport Canada’s “Own the Podium” program -- money that was earmarked for the women’s program because of its international success.

Women’s national team player Janine Beckie said she and her teammates  -- who also are negotiating a new contract with Canada Soccer -- have repeatedly asked Cochrane to account for the flow of the money into the men’s and women’s national team programs and to explain how “Own the Podium” money has been spent.

“I like to think the players are trying to bargain in good faith and give Canada Soccer the benefit of the doubt, but there has been a severe lack of transparency,” Beckie said in an interview. “Every single time we ask for details about where money is coming from and how they allocate it between the teams, Canada Soccer executives just go around in circles.”

Cochrane said that wasn’t true.

“I'm actually quite happy with the openness we've had with their counsel and I'm confident that we're going to get to a place that everyone is comfortable with,’ he said. “These negotiations are ongoing right now, so I want to keep those discussions between the two parties.”

It’s unclear how Canada Soccer will settle its dispute with men’s national team players, who have now rejoined their club teams and aren’t scheduled to regroup for international friendly matches before September, weeks before the World Cup in Qatar.

Canada Soccer released a statement on July 4 saying it has made a new offer to the men’s team.

Cochrane said he doesn’t know how the players will react.

“They are a united group,” he said. “They've often described themselves as a brotherhood. And they got to the place that they are by being together. You don't have the success that they've had over that gruelling qualification campaign without being together.”