Whatever the outcome of the investigations into corruption for staff at FIFA, its "status as a moneymaking machine seems assured," according to Moore & Scannell of the FINANCIAL TIMES. Sports marketing exec Patrick Nally: “Broadcasters and sponsors are not going to be dissuaded from supporting the World Cup, a massive global event, which will go on and on." The football federation, a global clearing house for TV rights and sponsorship deals "for a phenomenally popular sport," made $5.7B in revenues in the four years leading up to last year’s World Cup in Brazil. In a report to FIFA delegates ahead of this week’s Congress, FIFA President Sepp Blatter said that the football body "had finished its four-year financial cycle 'on a great high.'"
And as the appeal of football has widened, so has FIFA’s "earning potential." Nearly half of its revenues come from TV screening, with FIFA earning $2.43B from TV rights around the world for the 2014 World Cup, with the U.S. now FIFA’s fourth-largest market for screening rights.
U.S. prosecutors said that as the value of FIFA’s TV and marketing rights went up, "so did the bribes." In one deal alone, two sports marketing groups allegedly paid $100M in bribes. Even before Wednesday’s arrests, there "were frequent questions about the organisation’s finances, centring on how it allocates sponsorships and TV rights" (FT, 5/28).
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| Source: Financial Times |
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| Source: Financial Times |
BANK FALLOUT: REUTERS' Thomas & Barreto reported Hong Kong's de-facto central bank, the Hong Kong Monetary Authority, said on Thursday that "it was aware of bribery and corruption charges" against officials from FIFA, and was "monitoring the implications for banks."
More "than a dozen banks" were named in a U.S. Department of Justice indictment. The indictment specifically mentioned $1.2M being wired to an unnamed bank account at HSBC in Hong Kong. Later, $1M was transferred from the HSBC account through Standard Chartered Bank in N.Y. to a bank in the Cayman Islands (
REUTERS, 5/28). In London, Chon & McLannahan wrote FIFA officials and the sports execs who allegedly paid them bribes "used accounts at major global banks, including JPMorgan Chase, Citigroup and HSBC, to facilitate payments and wire transfers." Other banks named in the 164-page complaint include Bank of America, UBS and Julius Baer in Zurich, raising the prospect that Wall Street "could be in the spotlight again over its involvement in yet another scandal." Acting U.S. Attorney for the Eastern District of N.Y. Kelly Currie: "It's too early to say whether there is any problematic behavior but it will be part of our investigation" (
FT, 5/28).
