Fox, DirecTV Mum on Association With Soccer Rights Scandal Firms

NEW YORK (TheStreet) -- Rupert Murdoch's 21st Century Fox (FOXA) and DirecTV (DTV) , two companies with ties to sports marketing companies at the heart of the controversy regarding sponsorship rights to the world soccer games, are staying mum on the connections.

Fox reportedly holds a more than 50% stake in T&T Sports Marketing LLC, a joint venture between Traffic Group and Torneos y Competencias, The Wall Street Journal reports. The two firms were at the center of a scandal that resulted in a 47-count indictment for charges of racketeering, wire fraud and money laundering conspiracies that included nine FIFA (Federation Internationale de Football Association) officials.

Both Fox and DirecTV, which is pending a $48.5 billion acquisition by AT&T (T), have acquired rights to significant soccer events through Traffic Group, a Brazilian company that bought and resold soccer rights, and Torneos, an Argentine sports marketing firm, the report said, citing "people familiar with the businesses."

In fact, broadcast satellite service provider DirecTV holds a 40% stake in Torneos, with four seats on Torneos' nine-seat board. Torneos, in turn, own a stake of Datisa, which allegedly acquired rights to Copa America tournament, this year hosted in Chile June 11 to July 4, with in part more than $1 million in bribes to soccer officials. DirecTV did not return calls for comment.

Meanwhile, Fox's connections with Torneos and Traffic Group include a more than 50% stake in a joint venture between the two called T&T Sports Marketing LLC, although with reportedly no operational interest. FOX spokesman Nathaniel Brown declined to comment on the ties, saying the company was not issuing a statement on the matter.

Fox and John Malone's Liberty Media  (LMCA) along with Hicks, Muse, Tate & Furst, a private-equity firm, created a programming and marketing venture in 2002 called Fox Pan American Sports LLC, The Wall Street Journal reports. At the time, Liberty held a stake in Torneos while Hicks, Muse, Tate & Furst held a stake in Traffic.

Through this deal, Fox received the rights to Copa Libertadores and Copa Sudamericana, which are popular soccer matches in South America. Fox reportedly wound up with its large stake in the T&T Sports Marketing after it purchased Hicks, Muse, Tate & Furst's stake in 2011.

Fox shares, off nearly 14% for the year to date, closed Monday down about 0.7% at $33.07. Shares of DirecTV closed 0.1% higher at $91.79, trading at the top of a 52-week range of $82.04 to $92.65. Shares are up nearly 6% for the year to date.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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