Should Sponsors Show FIFA the Red Card?

The United States cemented its status as world police this week when it swooped in on FIFA, international football’s governing body, alleging that corruption at the organisation is “rampant, systemic, and deep-rooted.” The Department of Justice indictment named 14 people on charges including racketeering, wire fraud and paying bribes worth more than $150million.

These are pretty damning allegations against a not-for-profit organization that recorded $338million profit and $5.7billion in revenues for the 2011-2014 financial period. This money comes mainly from FIFA’s key revenue streams, the sale of television rights for the World Cup and marketing rights to sponsors including Adidas, Coca-Cola, Gazprom, Hyundai/Kia Motors, Visa and Budweiser.

Corporate sponsorship, especially of the world’s most popular sport, is great publicity for a brand. One billion viewers tune into the World Cup every four years, giving sponsors unrivalled exposure to markets all around the world. But suddenly, instead of being associated with some of the best athletes and the most popular sport in the world, corporations risk having their image tarnished by a governing body that was taking bribes to fund lavish lifestyles that rival those of football’s star players.

Moreover, as the Wall Street Journal points out, this isn’t exactly a shocking development for sponsors, who have maintained their FIFA sponsorship agreements for years despite persistent allegations of corruption and misconduct. The controversy surrounding the World Cup in Qatar should have been enough to send sponsors running, especially the allegations of abused migrant labourers building soccer stadiums. Now it has all blown up and the corporations that contributed $177million to FIFA in 2014 have come under intense media scrutiny, highlighting the danger of linking corporate reputation to an outside organisation.

Still, there is an opportunity for corporations that have suddenly become associated with an incredibly tarnished organization to turn this around. Their financial support of FIFA does, after all, allow sponsors to demand change. Frankly, this is something they should have done a long time ago, but it’s not too late. So far, however, only Visa Inc. has stated that it will “reassess its sponsorship” if FIFA fails to rebuild “a culture with strong ethical practices to restore the reputation of the games for fans everywhere”. Adidas, Coca-Cola and McDonald’s only stated that they are monitoring the situation.

But while corporate sponsors are suddenly getting the wrong kind of attention, one could argue that the FIFA scandal is a publicity coup in some respects: Even David Beckham couldn’t generate this level of interest for soccer in the US.