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Marketing and Sponsorship

FIFA: Sponsors To Examine Their Deals With Governing Body After Arrests

While FIFA's biggest sponsors "probably will take a close look at their relationships" with the governing body after Wednesday's arrests and indictments, "they’re unlikely to take any immediate action," according to Aaron Ricadela of BLOOMBERG. London-based Futures Sports & Entertainment Managing Dir Kevin Alavy said that official FIFA sponsors such as 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." A Gazprom spokesperson, whose Russia-based gas producer is an official FIFA sponsor, said the development “doesn’t influence” its sponsorship agreement in place through the end of the 2018 World Cup in Russia. Ricadela noted 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 A-B InBev "didn’t immediately respond to requests for comment." NPD Group VP/Industry Analysis for Sports & Leisure Matt Powell said, "Certainly this tarnishes the FIFA brand. I expect that sponsors will show restraint until the story plays out a bit more" (BLOOMBERG, 5/27). BUSINESS INSIDER's Lara O'Reilly wrote adidas was the first World Cup sponsor "to publicly respond to the news" that FIFA was subject "to two separate corruption probes." The German sportswear company "stopped short of being critical of football's governing body, but instead encouraged FIFA to maintain ethical and compliance standards." Business Insider has contacted all of the other FIFA World Cup sponsors for comment on the arrests. The only other sponsor apart from adidas to respond was automaker Hyundai, which said that it would "not be making any comment at this time" (BUSINESS INSIDER, 5/27).

WEIGHING IN: In London, Fildes & Ducker wrote McDonald’s "expressed serious reservations about Fifa’s plight." A spokesperson said, “McDonald’s takes matters of ethics and corruption very seriously and the news from the U.S. Department of Justice is extremely concerning. We are in contact with Fifa on this matter. We will continue to monitor the situation very closely.” Sponsors Visa and Budweiser declined to comment, but a Coca-Cola spokesman 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. We expect Fifa to continue to address these issues thoroughly.” Brand Index Dir Robert Haigh said companies "would be very careful about pulling out of sponsorship deals given the incredible popularity of the World Cup." He added that companies involved in financial services, such as Visa, "may not wish to be tainted by any allegations of corruption." Haigh: “This is a storm that has been rumbling on for years but this maybe the straw that breaks the camel’s back"  (LONDON TIMES, 5/28). ... QUARTZ's Tim Fernholz wrote it is "hard to imagine the big World Cup television deals that provide most of the funding going away." The problem with FIFA’s history of scandal "is always that it can hide behind the massive popularity of the sport it brings." But the sponsors that are paying simply to associate their brands with FIFA -- $1.6B alone in '14 -- "have a bit more leeway to walk away, as Sony did last year" (QUARTZ, 5/27).

NO INVOLVEMENT: In London, Ben Burrows reported ManU has "denied a partnership with a company embroiled at the centre of the FIFA corruption scandal." A number of further defendants "plead guilty to a range of charges and have been convicted," one being Traffic Sports USA Inc. and Traffic Sports Int'l Inc. as well as their Owner & Founder José Hawilla. Traffic Sports lists ManU as one of its principle club partners along with Brasileiro clubs Palmeiras, Fluminense, Atlético Miniero and Grêmio. But the club denied "any such partnership" and claimed it never "had any financial arrangement with Traffic or any affiliate." A spokesperson said, "We are certainly not an official partner of theirs" (LONDON MIRROR, 5/27).

OFFICIAL FIFA PARTNERS
adidas
Coca-Cola
Gazprom
Hyundai/Kia Motors
Visa
FIFA WORLD CUP SPONSORS
Budweiser
McDonald's

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