Major FIFA sponsor Visa "has threatened to withdraw" its backing and demanded that world football's governing body "clean up its act" in the wake of the £100M ($153M) corruption scandal, according to Adam Shergold of the London DAILY MAIL. Visa said its "disappointment and concern" were profound and demanded "swift and immediate" action following Wednesday's events. FIFA stands to lose millions if its stable of sponsors turn their backs on it and Visa's "was the most strongly-worded of the statements released on Wednesday." A Visa statement said, "As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organisation. This starts with rebuilding a culture with strong ethical practices in order to restore the reputation of the games for fans everywhere. Should FIFA fail to do so, we have informed them that we will reassess our sponsorship." FIFA's "partners" pay between £15M ($23M) and £28M ($42M) a year for their association with the governing body (DAILY MAIL, 5/28). REUTERS' Athavaley & Thomasson wrote sponsors "are trying to balance the growing sensitivity of consumers to corruption, human rights abuses and environmental issues against their relationship with the organisation that holds the keys to a billion soccer fans worldwide." Sponsors "have long faced risks to their brands from sports scandals ranging from doping to match fixing to misbehaviour of top players on and off the pitch." Sports marketing research group Repucom Founder Paul Smith said, "Brands have to take a longer-term view. Any sport is littered with controversy on and off the field. What fans care about most of all is the game itself rather than the business of the game. ... Being a sponsor of FIFA implies you are a sponsor of the game, not of the organization" (REUTERS, 5/28). In London, McLannahan, Shotter & Mundy wrote Dean Crutchfield, an independent brand consultant based in N.Y., said that "sponsors might look to renegotiate their contracts in view of the scandal." Atlanta-based Romance the Brand President Tim Halloran said that "companies were likely to weigh the risk of collateral damage from the scandal against the brand visibility generated by the tournament." Halloran: "Is what I’m trying to leverage out of FIFA, is that still trumping what is going on behind the scenes?" (FINANCIAL TIMES, 5/28). In London, Phipps & Gayle wrote World Cup sponsors "are in an awkward position because they are under pressure from consumers to distance themselves from any corruption, but such sponsorships are lucrative in the long term." British Culture, Media & Sport Secretary John Whittingdale told parliament that sponsors should follow the lead of Visa and "reflect on their links to FIFA" (GUARDIAN, 5/28). The London TELEGRAPH reported South Korean car manufacturer Hyundai, a top-tier World Cup sponsor, issued its own "strongly-worded statement," although it stopped short of threatening to end its deal. It said in a statement, "As a company that places the highest priority on ethical standards and transparency, Hyundai Motor is extremely concerned about the legal proceedings being taken against certain FIFA executives and will continue to monitor the situation closely" (TELEGRAPH, 5/28).
A BAD NAME: The BBC's Bill Wilson wrote "having spent tens of millions of pounds to be associated with sporting excellence," adidas, Gazprom, Hyundai-Kia, McDonald's, Budweiser, Coca-Cola and Visa now find their names and products associated with the "increasingly tarnished" FIFA brand, arrests and allegations of "rampant, systemic, and deep-rooted corruption." One "publicity-savvy bookmaker has offered odds on which sponsor will be the first to pull out of its association with football's Swiss-based powerbrokers." It has Visa as the favorites, followed by Hyundai-Kia, although none of FIFA's backers "have said yet they are ending their deals." What damage "is being done to these well-known companies?" Millward Brown brands expert Anastasia Kourovskaia said, "This is disastrous for the main core group of big FIFA sponsors. For them, this is a major issue. The idea of sponsorship is to transfer the goodwill that supporters feel for the sport, to the benefit of a brand's equity." One other unforeseen outcome of the furor "may be that in future, potential sports sponsors may look to back smaller, grass-roots, events -- which traditionally have been more complex and costly to back -- rather than global blockbusters such as World Cups, which have a greater potential for scandal" (BBC, 5/28). MARKETING MAGAZINE's Shona Ghosh wrote this "toxic combination, plus FIFA's own strained history of sponsor relations, might mean the World Cup has finally lost its sparkle for the world's top brands." Sports marketing research agency IMR Editor-in-Chief Simon Rines pointed out that "this is not the first time FIFA has been challenged by sponsors." Rines: "There are several major problems for FIFA now. Will more sponsors follow suit and pull out? It is almost certain that they will have clauses that allow them to do so if they can demonstrate that the organization is either behaving unethically or bringing adverse publicity on them as sponsors." Rines added that FIFA "would have difficulty replacing tier-one sponsors who do drop out." He said, "FIFA seeks to align itself with number one brands in its various categories. If, for example, adidas withdrew, would Nike step in? It's highly unlikely given that Nike tends to prefer national federations and individuals rather than partnering 'mega-events.' I would say that this is crunch time for FIFA, the sponsors will be watching what happens over the next few weeks very carefully and if they are not reassured, then a mass exodus is certainly possible" (MARKETING MAGAZINE, 5/28).
ASSESSING THE DAMAGE: AD AGE's E.J. Schultz noted marketers affiliated with FIFA "could face more pressure to take a stand." Marketing and media agency rEvolution Exec VP/Consulting & Research Darren Marshall said, "This is now at the point where the sponsors have to take action or their image is going to get tarnished." But Intersport VP/Sponsorship & Event Marketing Rita Battocchio said that brands are "wise to take a wait-and-see approach" (AD AGE, 5/27). ESPN reported Former IOC Marketing Dir Michael Payne said that sponsors "can start to distance themselves with FIFA, but can still keep their deal." Payne: "This is the first time this is a criminal issue, which takes things to a new level. What they should do is say, 'We are a sponsor of the World Cup and the sport of soccer, we are not a sponsor of FIFA itself'" (ESPN, 5/27).
FINDING A LOOPHOLE: ADWEEK's Garett Sloane asked in the "age of Twitter, Snapchat, Instagram and Tumblr, who needs to be an official partner" of the World Cup? Media and marketing agency Mindshare Chief Strategy Officer Jordan Bitterman said, "Brands have found great ways to be involved in big events like the World Cup without actually being an official sponsor." Bitterman said that FIFA "could see sponsors revolt, but marketers will still spend on Twitter, Instagram and the rest come game time." He added that it "doesn't matter how many indictments FIFA has, 'brands are activating their affiliation with the game,' not the governing body" (ADWEEK, 5/27).
