Sponsors won’t play ball if Fifa ignores the rule book
VISA has told Fifa it could end its sponsorship if soccer’s governing body does not act quickly to restore the reputation of the game after senior officials were arrested on corruption charges.
The statement from Visa was the strongest so far as sponsors expressed concern about the scandal engulfing the world’s most popular sport and their customers took to social media to threaten a boycott of brands associated with Fifa.
Sponsors are trying to balance the growing sensitivity of consumers to corruption, human rights abuses and environmental issues against their relationship with the organisation that holds the keys to a billion soccer fans worldwide.
“Our disappointment and concern with Fifa . . . is profound. As a sponsor, we expect Fifa to take swift and immediate steps to address these issues within its organisation,” said Visa.
“This starts with rebuilding a culture with strong ethical practices. Should Fifa fail to do so, we have informed them that we will reassess our sponsorship.”
US prosecutors issued an indictment on Wednesday accusing nine Fifa officials and five sports media and promotions executives of bribes involving more than $150-million over 24 years.
The airline Emirates and Japanese electronics maker Sony announced in November they would not renew deals with Fifa, as corruption allegations mounted around the bidding process for the next two World Cups, in Russia and Qatar. The two companies were among Fifa’s six main partners, which together paid $177-million (about R2.2billion) last year for the right to advertise in World Cup stadiums and use the Fifa trademark.
A source familiar with the Sony decision said suspected corruption was one factor behind Sony’s withdrawal, although the main reason was the high cost of the sponsorship deal.
Fifa’s longest-standing partners are adidas and Coca-Cola. The German sportswear company has been the provider of the World Cup match ball since 1970 and has a partnership last- ing until 2030, while the deal for Coca-Cola, which has advertised in every World Cup stadium since 1950, lasts until 2022.
That perhaps explains why their reactions to Wednesday’s news were more muted than that of Visa, the world’s largest credit and debit card company, which became a Fifa partner only in 2007 and recently extended the relationship until 2022.
“This lengthy controversy has tarnished the mission and ideals of the Fifa World Cup and we have repeatedly expressed our concerns about these serious allegations,” Coca-Cola said. Adidas stopped short of outright criticism, calling instead for Fifa “to continue to establish and follow transparent compliance standards”.
Nike, which is not a Fifa partner but sponsors many of the world’s top teams, said it was co-operating with authorities.
The indictment said that in 1996, a global sports company, which was not identified in court documents, agreed to pay $40-million in “marketing fees” to an affiliate of the marketing agent of the Brazil national soccer team with a Swiss bank account. That was an apparent reference to Nike, which sponsors the Brazil national team.
US attorney-general Loretta Lynch declined to comment on whether there was any liability for companies that had won marketing rights, and if they were being investigated. But she said: “The investigation is continuing and covers all aspects.”
Nike later said it was “concerned by the very serious allegations”, adding: “Nike believes in ethical and fair play in both business and sport, and strongly opposes any form of manipulation or bribery.”
Fifa’s main sponsors had been uneasy even before the latest revelations. Adidas, Visa and Coca-Cola all made statements last week urging Fifa to take seriously rights for migrant workers in Qatar, responding to reports of abuses at the 2022 World Cup construction sites.
The Institute of Directors, a UK authority on corporate governance, said risks were mounting for sponsors. “They have a responsibility to their shareholders to make certain that the company’s cash is not going towards sporting events mired in bribery and corruption allegations,” said the institute’s Roger Barker.
South Korean carmaker Hyundai, the sole Asian Fifa partner for the 2018 World Cup in Russia, said it was “extremely concerned” about the legal proceedings. Anheuser-Busch InBev and McDonald’s said they were in contact with Fifa.
But brand experts were sceptical of a mass exodus of sponsors. Rob Prazmark, president of 21 Sports & Entertainment Marketing Group, said: “These sponsors put a lot of money into associating with the World Cup. They’ll give them a little bit of time to get their house in order.”—