McDonald’s is to introduce a “much more aggressive” vetting process before signing multi-million pound sponsorship deals of the World Cup and other global sports events to protect itself from becoming embroiled in a repeat of the FIFA scandal. The fast-food giant pays out millions of pounds as a sponsor of the World Cup but has faced calls to show an ethical stance by dropping its sponsorship amid the on-going scandal that has engulfed FIFA and its embattled president, Sepp Blatter. In light of the adverse publicity and reputational damage, McDonald’s will now insist that its future sponsorship deals of events such as the Olympics and World Cup will include a series of clauses so it is able to terminate agreements in light of a scandal. John Lewicki, a senior exec at McDonald's, said, “We are a FIFA World Cup sponsor and there is some issues with FIFA right at the moment. And that directly affects us and all the other sponsors who are involved with FIFA. The way we endorse an athlete, we vet that athlete. We have a morals clause in the contract so if there’s anything that goes wrong we are protected. That’s not necessarily the case with sponsorship of a property. But I think you will see some of that going forward now with some of the things that are happening. You will start to see sponsorship contracts with properties evolve to that type of relationship where it is vetted and you look at different types of morals or out clauses based on the actions of the property. It’s definitely our status but I also think it is something that will move forward in general.” Currently, McDonald’s includes such termination clauses in light of a scandal in its sponsorship deals with individual sporting stars but not when sponsoring global sporting events. The fast-food chain, which has been a World Cup sponsor since '94, is currently signed up as a World Cup sponsor until Qatar in '22. It is unclear if other sponsors will follow McDonald’s lead. Adidas’s current deal with FIFA runs until '30. Nick Johnson, a marketing law specialist at Osborne Clarke, said that FIFA’s current sponsorship deals are likely to be on “FIFA- friendly terms” and that McDonald's would face steep damages for breach of contract should it try and terminate it. Andy Sutherden, global practice director at Hill & Knowlton Strategies, said the move from McDonald’s made sense. He said, “Just because you do not like something as sponsor does not mean that you can necessarily terminate a contract. A company’s ability to terminate a contract relies on something where there is zero ambiguity in what represents a breach.”
WORKING TOGETHER: Lewicki also revealed that McDonald's and other World Cup sponsors, such as Visa and Coca-Cola, were in close consultation with the scandal-hit world governing body over reforms to how it is governed. He said, “We’ve sat through and listened to the reforms to make sure that they [FIFA] are following through with their reforms processes. We are not making any demands, we are listening, and we’re working with them.” Last week, it was revealed that Blatter is to face criminal proceedings. Blatter is suspected of criminal mismanagement or misappropriation over a TV-rights deal he signed with former Caribbean football chief Jack Warner in '05. Blatter is also suspected of “a disloyal payment” of 2M Swiss francs to UEFA President Michel Platini -- who was favorite to succeed him as president -- in '11. Commenting on Blatter, Lewicki said, “He has got a short tenure. As long as he is not influencing what is happening with the reform, then he can do what he wants." Lewicki was speaking at an event hosted by sports industry magazine SportsPro.
John Reynolds is a writer in London.
