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Monday, March 18, 2024
March 18, 2024

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FIFA sponsors Adidas, Coke seen looking at ties after raid

The Columbian
Published:

FRANKFURT, Germany – While the biggest sponsors of soccer’s World Cup probably will take a close look at their relationships with FIFA after Wednesday’s indictments of officials at the sport’s governing body, they’re unlikely to take any immediate action.

Companies including Adidas, Coca-Cola and Visa may conclude that the U.S. Justice Department allegations of “systemic and deep-rooted corruption” don’t undermine the game’s integrity in the way performance-enhancing drugs or match-fixing do, said Kevin Alavy, a managing director at sports media analysis firm Futures Sport + Entertainment. Bribes and kickbacks were meant to influence the awarding of media and marketing rights, and the choice of the host country for the 2010 World Cup, according to the U.S. Justice Department.

“Corruption can take different forms, and some forms of corruption can matter more to fans, particularly when the integrity of the match is threatened as in doping or match- fixing,” Alavy said in a phone interview. “That form of corruption can be the most damaging.”

Still, the sponsors can’t risk tarnishing their reputations with a even a whiff of wrongdoing, so they’re likely to examine their ties with FIFA. The U.S. indictment Wednesday outlined two decades of fraud, and Swiss officials said they’re investigating alleged money laundering related to the selection of the host countries for the next two World Cups, in Russia and Qatar.

The website of Zurich-based FIFA lists five marketing partners for the 2018 World Cup in Russia – Adidas, Coca-Cola, Visa, Gazprom, and Hyundai Motor and its Kia Motors affiliate. Anheuser-Busch InBev’s Budweiser and McDonald’s are also sponsors of the tournament, according to the site.

Adidas “is fully committed to creating a culture that promotes the highest standards of ethics,” a spokeswoman said in a statement, and it’s urging FIFA “to establish and follow transparent compliance standards in everything they do.” The German sportswear maker plans to continue its support of soccer “on all levels,” she said.

A Gazprom spokesman in Moscow said Wednesday’s development “doesn’t influence” the Russian gas producer’s sponsorship agreement in place through the end of the World Cup in 2018.

Calls to Hyundai and Kia weren’t answered outside working hours in Seoul. An official at Visa wasn’t immediately able to comment. Coca-Cola, McDonald’s and AB InBev didn’t immediately respond to requests for comment.

Companies pay tens of millions of dollars a year for the right to associate their names with soccer’s quadrennial tournament, the world’s most popular sporting event. Getting in front of all those fans may be too good to pass up.

“Football is far and away the world’s most popular sport and the World Cup is its most important event,” said Alavy.

The balance between wanting a squeaky-clean image and getting access to soccer’s huge global fan base presents a quandary for international brands. The best solution may be for FIFA to deal with the charges strictly and decisively to protect sponsors, said one European executive whose company works with FIFA and didn’t want to be quoted talking about internal matters.

Even when sponsors do yank support from athletes and events, it can take years to play out. Allegations of blood- doping followed cyclist Lance Armstrong for more than a decade before Nike and others dropped him in 2012. The Olympic Winter Games survived allegations of bribery in the run-up to the Salt Lake City games in 2002.

“Certainly this tarnishes the FIFA brand,” said Matt Powell, an analyst at NPD Group, a market research company. “I expect that sponsors will show restraint until the story plays out a bit more. Once they know that convictions are in and understand the extent of the crimes, then sponsors will act.”

FIFA’s problems span at least two continents and date back more than 20 years, according to authorities. Fourteen people were indicted on U.S. charges of racketeering, wire fraud and money laundering conspiracies. Swiss authorities arrested executives at a hotel and searched the organization’s headquarters in a series of dawn raids in Zurich.

Soccer officials had gathered in Zurich’s Baur as Lac hotel ahead of FIFA President Sepp Blatter’s re-election bid on Friday. The governing body has been dogged by corruption charges repeatedly during Blatter’s 17-year tenure atop global soccer.

Concerted pressure from the sponsors would ensure that FIFA cleans up its act, said Nigel Currie, a sponsorship consultant at NC Partnership.

“If just individual brands start breaking ranks, that’s one thing,” he said in an interview on Bloomberg Television’s Market Makers. “But if they all pull together, they could have a real impact and really damage FIFA very badly, and I think then you’ll start to see some changes and see them taking some notice.”

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