Nike lost out in the '90s to adidas "in the race" to be an official FIFA
sponsor of the World Cup, according to Chris McGreal of the London GUARDIAN. However, Nike then snatched sponsorship of
Brazil’s national football team, and future World Cup hosts, "in a move
it later said was crucial to propelling it to one of the biggest brands
in the game." Now "that deal has come back to haunt the company" with this week’s corruption charges in the U.S. against FIFA officials. The indictment
"does not name Nike." It
refers solely to "Sportswear Company A." Neither "do the charges accuse
the unnamed sportswear company of paying bribes or any other crimes." However, joining the dots from the information provided by U.S.
prosecutors "leads inextricably" to Nike’s $160M deal with Brazil and, from there, to difficult questions for the company about the allegation
that it paid tens of millions of dollars into a Swiss bank account
outside of the original sponsorship contract. That money, the U.S.
indictment alleges, was divvied up as "bribes and kickbacks" paid to an
official who negotiated the deal on behalf of Brazil although "there is
no suggestion that Nike knew." Nike "is not unused to crises." However, David Carter, the director of the University of Southern California’s Sports Business Institute, said that "this may prove more challenging for Nike" because the U.S. has said the corruption investigation is far from over. He said, "Nike are going to be paying attention whether they want to or not because this story is not going to be going away, at least until we’re through 2022 [and the World Cup in Qatar]." Rick Burton, the former head of the University of Oregon’s Warsaw Sports Marketing Center, who worked closely with Nike as it expanded its business in China, said, "FIFA has been under the microscope for a long time. Nike could have chosen to get out years ago but didn’t." However, Burton, who is now professor of sport management at Syracuse university, "is doubtful" the accusations against FIFA execs will damage the Nike brand so long as there is no firm evidence of criminal intent. Burton: "I don’t think it taints Nike at all. I think it taints FIFA and the World Cup" (GUARDIAN, 5/29).
