Corrupt FIFA ruining the world game: Where does this leave the sponsors?

It’s been quite a week for FIFA with their reputation falling to an all time low. The football federation is the governing body of world football (soccer), and responsible for organising major international events, most notably the World Cup. 

Source: http://worldsoccertalk.com/

Last week saw Swiss police interrupting FIFA’s annual meeting arresting six high-ranking senior officials on corruption charges leading from an FBI investigation. This comes after months of allegations of money laundering, bribery and corruption charges for the bidding process of the Russia 2018 and Qatar 2022 World Cup. Three days after the arrests the President, Sepp Blatter, was re-elected for a historic fifth term as president of the organisation.

With his position becoming untenable amid the corruption scandal, Sepp Blatter called a press conference at FIFA Head Quarters on Wednesday to announce he is stepping down as president. “I will organise an extraordinary congress for a replacement for me as president and I will not stand,” said Blatter.

As a not-for-profit organisation, FIFA is responsible for championing the idea of “Fair play” and using football as a vehicle for uniting and educating the world. FIFA’s World Cup Sponsors are some of the most powerful multinational companies in the world. The reputations of McDonalds, Adidas, Visa, Budweiser and Coca-Cola are very much at risk in their response to this crisis.

In the aftermath of the corruption investigation last year, both Sony and Emirates opted against signing new contracts, while Castrol, Continental Tyres and Johnson & Johnson also chose not to renew their sponsorship agreements. Looking back at the events of last week, this may have been a very wise decision. Visa has already made a statement expressing their disappointment and concern with FIFA and informed the organisation that they will be reassessing their sponsorship. Coca-Cola said, “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.”

Source:  http://www.bbc.com/sport/0/football/3294214

The following few weeks should bring some new insight into the direction of the sponsors. As key partners, it is vital that they have a say in the reform of the organisation or risk negative backlash from customers.  Leaving the sinking ship of the FIFA regime would make a big statement. However, they could be walking away from the biggest mainstream exposure that is the phenomenon of the World Cup. With sponsors contributing at least $1.5bn to FIFA every four years, they will have a big say in the direction of the organisation. Ultimately, I believe the sponsors will be the ones who play a major role in the reform the organisation going forward.

Upon Blatter’s resignation, Coca-Cola released a statement saying, “We believe this decision will help FIFA transform itself rapidly into a much-needed 21st century structure and institution”.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School