Is FIFA Damaged Goods For Sponsors Of The Beautiful Game?

It has been an ugly year for sports governing bodies.

The NFL has made a huge stinker out of pretty much any issue that arose from Ray Rice to concussions, the NBA had to deal with Donald Sterling and racism in general, the NHL had its own share of domestic violence issues, and doping scandals in the MBA, cycling, swimming and athletics just keep on coming. Even cricket is not safe anymore.

But nobody beats the world soccer governing body FIFA.

In a nutshell, here is what happened. FIFA invited countries to host the World Cup in 2018 and 2022. Many countries stepped up, including the U.S. and the U.K. FIFA allocated the games to Russia (2018) and Qatar (2022), respectively. 

The voting and allocation of the games is a mysterious, non-transparent game of favoritism, where votes are (depending on who you believe) either bought outright (bribery) or won under the guise of favors in the form of “support” by the potential host nation to local soccer associations. What makes this process so convoluted is that each country has the same number of votes (one!), meaning the U.S. and tiny San Marino each have one vote. 

In regulated countries with wealthy soccer associations (like the U.S. and the U.K.) there is not much to be gained from bribes/favors. But in many other countries it is (allegedly) really easy to get a vote. “Would you like us to build you a new national stadium?” “Would you like us to host your national team in a lucrative friendly international match?” “Would you like this brown envelope?”

After various bribery scandals came to light, former U.S. Attorney Michael J. Garcia was commissioned by FIFA to investigate. His report was then summarized/sanitized by FIFA for publication, resulting in no names being revealed, no charges being brought and no changes to the World Cup allocations for 2018 and 2022 being made. Garcia promptly distanced himself from the summarized/sanitized version and to date we are still waiting for full disclosure by FIFA.

The main FIFA sponsors have been pushed to take a position in the scandal, which is a tricky issue, because they are ultimately not buying access to FIFA but access to the Beautiful Game at its pinnacle: the World Cup.

Much has been made of the departures of sponsors Emirates Airlines and Sony. If you read the U.K. press, they are leaving because of the scandals. I think it is fair to say they are probably leaving for very different reasons.

Sony is seriously struggling financially and organizationally, and FIFA’s World Cup party is probably their most costly marketing asset. I am betting they looked at their business results pre-, during and post-World Cup and concluded they could do with the savings.

I think Emirates looked at where the two tournaments were going to be held (Russia, Qatar) and decided they were not hugely important markets to them (Qatar is the home of direct competitor in the luxury long-haul business Qatar Airways, Russia is economically struggling).

So not the scandals or reputation management, but simple (and smart) economics are most likely the real reason for these two departures. It is rumored that FIFA has their successors already lined up in the form of Samsung and Qatar Airways.

So what will happen now? In a word: Nothing!

  • The World Cup’s in 2018 and 2022 will go ahead as planned unless something disastrous happens in the host countries.
  • The FIFA structure will not change unless there is an uprising such as the Olympic Committee faced in 1999 post the Salt Lake City games. Chances of this happening are pretty small as the people involved with FIFA have no incentive to change anything as that means cutting off a lucrative flow of personal and professional incentives. Sponsors won’t push for it unless criminal misconduct is proven.
  • It is also unlikely that many of the alleged wrong-doers are actually arrested, charged and brought to justice. It may happen in a few countries but in many others probably not. Jack Warner, rumored to be one of the key players in the scandal, and who is a former vice president of FIFA and president of CONCACAF, the North & Central American and Caribbean football association, is now minister of national security in his native Trinidad and Tobago. Can you say political immunity? Other countries where national football associations allegedly were involved in the scandal have weak or non-existing laws for corruption or have no legal infrastructure to deal with such issues.

As I have said before, soccer fans love the beautiful game but hate FIFA. At least that is something that unites football fans around the world!

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