The news that three major sponsors have ceased their partnership with FIFA could potentially damage its reputation, and more importantly, its finances. Reports on Friday revealed that Castrol, Continental and Johnson & Johnson were no longer corporate sponsors of football’s international governing body. All three failed to renew their sponsorship contracts when they expired last year. This followed a similar situation with Sony and Emirates last year.
FIFA has been embroiled in several corruption scandals in recent years. Andrew Jennings has alleged numerous instances of personal aggrandisement, bribery and embezzlement in the corridors of football’s power. In 2010, the Sunday Times investigated the successful world cup bids for Russia 2018 and Qatar 2022 and uncovered widespread corruption. Six officials were suspended for bribery by FIFA. A year later the only challenger to Sepp Blatter, the incumbent president’s re-election, Mohammed bin Hammam, withdrew after he was charged with breaching FIFA’s ethics.
The situation has become so toxic that an internal investigation designed to investigate these allegations ended in farce when the chief investigator, Michael Garcia, quit over the FIFA Ethics Committee’s handling of his report. It emerged that both Emirates and Sony ceased sponsorship at the time of this crisis. The news that three other major global sponsors have deserted FIFA could further damage the reputation of the organisation and its president, Sepp Blatter, who has been president since 1998.
Since 1974 the global growth of FIFA has been underpinned by commercial sponsorship. Under the stewardship of the Brazilian João Havelange, FIFA developed a global commercial strategy to grow the sport, and the finances of the organisation. Supported by the head of Adidas France, Horst Dassler, and his partner, Patrick Nally, Havelange instituted a suite of corporate partners. Each of these sponsors would have exclusive rights to the FIFA brand, and the World Cup.
FIFA transformed from a small, European-focused operation into a global institution that currently has more members than the UN. Dassler’s networks and commercial acumen ensured that key sponsors such as Coca-Cola, Adidas and McDonalds paid more for exclusivity. Television contracts were also re-packaged and sold to the highest bidder. Coincidentally, the company that won the rights to sell these television packages, International Sport and Leisure (ISL), also happened to be owned by Dassler and Nally. ISL went bankrupt in 2001 and mired FIFA in another corruption scandal as it transpired that bribes were given in return for ISL winning the contracts.
Burgeoning finances were required to fund Havelange’s election promises. The Brazilian understood that the independence movement had created many new nations, all of whom wanted recognition with FIFA. Many were also disillusioned with the European focus of these international federations. More importantly, there were many more of these federations than in Europe. Each national federation had one vote. So Barbados has the same power in the election as Russia.
To appeal to his electorate, Havelange sought to redistribute the funds. Partly this was done through expanding the World Cup to include more African and Asian nations. But it was also done through the Goal Programme to fund grassroots development. Through the quid pro quo of politics, using FIFA funds for notable projects helps boost the reputation of local members, who are then more likely to keep the incumbent in power.
Challenging the finances?
The problem with trying to reform FIFA is that it is unaccountable to anyone other than its member associations. As the majority of these are reliant on money from FIFA for their own power base, they are unlikely to seek change. The loss of corporate sponsorship, however, could weaken the power of Sepp Blatter and his coterie of power brokers.
Earlier this month a new organisation, New FIFA Now, was launched in Brussels to try to reform FIFA. One of their strategies is lobby sponsors and governments to denounce FIFA and implement change. While this is a noble cause, the outcome could be problematic. The International Olympic Committee (IOC), FIFA’s Swiss neighbour, faced similar crises and reformed, but the manner in which this occurred was very different.
In 1998, similar allegations of corruption and bribery at the IOC surfaced after the successful bids of Sydney 2000 and Salt Lake City 2002. After an in-depth investigation, the IOC reformed its ethics procedures and changed how Olympic host cities were selected. However, this was partially achieved by governmental pressure placed on the host cities.
Federal and parliamentary investigations into these allegations on a local/national level ensured that local organising committees were held to account. More importantly, they jeopardised the very existence of the games. Without governmental support, the host cities could not have successfully hosted them.
This situation has not occurred with FIFA. And the signs are that it is unlikely to occur in the near future. The next two World Cups are being held in Russia and Qatar; two countries that are not noted for their political transparency. Both host nations are highly unlikely to instigate governmental reviews on the execution of the bid process and withdraw state support for the tournaments.
This could be the same problem with commercial sponsors. After Emirates ceased their partnership with FIFA, their place was taken by Qatar Airways. It will be interesting to see if FIFA’s new sponsors will be other multinationals based in these developing economies. Gazprom (the state-controlled Russian energy company) already sponsors UEFA’s Champions League. If they, or a Middle Eastern oil company, take Castrol’s place at FIFA’s table, are they really likely to campaign for reform? As Jerome Valcke, FIFA’s general secretary stated in 2013:
I will say something which is crazy, but less democracy is sometimes better for organising a World Cup.
We, the fans, can lobby sponsors and governments to reform Blatter and co. There is a chance that this could back FIFA into a corner as they seek their funding from sources that are less transparent, but there has to remain a lingering doubt whether FIFA minds very much about that. With a decade ahead which will be defined by a flagship tournament taking place in countries where tough questions are unlikely to be asked, maybe now is even a ripe time to declare FIFA and the World Cup dead and implement a new competition.