Just days before another World Cup begins, FIFA once again is dominating the headlines.
This time around, though, it’s for obviously far different reasons than last year’s excitement over the U.S. team’s play in Brazil.
The unveiling last week by the U.S. Department of Justice of a 47-count indictment that charged nine FIFA officials and five sports marketing officials with racketeering, wire fraud and money laundering conspiracies brought the game’s international governing body to the fore of global news cycles. Swiss authorities arrested a number of those implicated in an early-morning operation at a Zurich hotel, ahead of FIFA’s annual meetings that were taking place in the city.
While corporate backers of FIFA and soccer globally hadn’t taken immediate action in response as of late last week, many of those companies made public comments in the wake of the news (see related story).
TV and sponsor revenue accounted for 83 percent of FIFA’s total income related to the 2014 Brazil World Cup, according to the organization’s 2014 financial report, so any effort to void such contracts would be monumental. Many sponsors, however, also have spoken out against FIFA in the past with little or no result — and with their financial support continuing.
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CONCACAF President Jeffrey Webb was among the nine FIFA officials charged.
Photo by: GETTY IMAGES
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According to the report, sponsors brought FIFA more than $465 million in revenue last year. The group’s then six top-tier sponsors — Adidas, Coca-Cola, Emirates, Hyundai-Kia, Sony and Visa — paid FIFA $117 million during the year.
Emirates and Sony had their contracts with FIFA expire following the 2014 World Cup, while a previously signed deal with Russian energy company Gazprom began this year. FIFA typically has between six and eight top-tier partners, according to its sponsorship structure.
FIFA generated another $131 million last year from second-tier, World Cup-level sponsors, a tier in which it also typically has between six and eight partners, according to the group’s sponsorship structure. The organization has a national level of sponsorship, as well, from which it generated nearly $46 million in revenue in 2014.
Additional revenue came from value-in-kind transactions from several commercial affiliates and from FIFA’s Fan Fest.
Last week’s indictment focused heavily on North America and South America, as many of the schemes outlined in the indictment involve CONCACAF and CONMEBOL, the two groups that serve as governing bodies for the sport on those respective continents. Among the nine FIFA officials charged was CONCACAF President Jeffrey Webb.
While some of the allegations date back as many as 25 years, the Department of Justice investigation also found that $110 million in bribes were paid related to the planning of the 2016 Copa America, the century-old tournament that is scheduled to be played next year in the United States. It will be the first time the tournament is played outside of South America.
The tournament is scheduled for June 3-26 next year. Its host cities had yet to be selected as of late last week, but a bidding process between 24 venues that submitted proposals has been underway, and the selected cities were scheduled to be announced this summer, according to U.S. Soccer. Between eight and 13 stadiums are expected to be selected.
Additionally, Fox has been deemed the front-runner to pick up English-language rights for the tournament, adding to its growing soccer portfolio that includes the FIFA Women’s World Cup, which begins this week, as well as MLS, the 2015 CONCACAF Gold Cup, the 2017 FIFA Confederations Cup, and the 2018 and 2022 World Cups.
Univision signed a deal last year for Copa America’s Spanish-language rights.
CONCACAF issued a statement last week noting that while it is “deeply concerned by [Department of Justice] developments,” it “continue[s] to operate in the ordinary course of business, hosting all of its upcoming tournaments in a successful and timely manner.” The federation also announced that a special committee consisting of U.S. Soccer Federation President Sunil Gulati, Mexican Soccer Federation President Justino Compean and Canadian Soccer Association President Victor Montagliani would be responsible for “evaluating and sustaining all of the business operations of the Confederation” following the announced indictment.
Immediate attention was also turning last week toward the Women’s World Cup, which the Canadian Soccer Association said will not be affected by the FIFA turmoil. In a statement, the group said it is “confident that the current situation will not impact the competition.” It declined further comment.
