Coca-Cola has become the first tier-one sponsor of the World Cup to publicly criticise FIFA for its handling of the investigation into corruption over the bidding process for the 2018 tournament in Russia and 2022 competition in Qatar, according to a report in The Sunday Times.
FIFA’s latest crisis came earlier this month when it published a summary of the report, clearing the winning Qatar and Russia bids of any corruption. Shortly after its publication, the summary was disowned by FIFA’s own ethics chief Michael Garcia, who said the report had been “misrepresented” by football’s governing body, as reported in The Daily Telegraph.
Coke has said the handling of the botched investigation has been “disappointing.” It is extremely unusual for sponsors to publicly come out against the media they sponsor (they’d much rather just pick up the phone and thrash out issues in private.) But in recent months, sponsors including Adidas, Hyundai, Visa, Sony and Budweiser have all released statements effectively denouncing the negative tenor surrounding FIFA’s decision to award the 2022 World Cup to Qatar. It shows just how tense the situation is at FIFA right now and how poisonous association with the football body is becoming.
FIFA announced last week it was lodging a criminal complaint with the Swiss attorney general regarding “possible misconduct of individual persons in connection with the awarding of the hosting rights of the 2018 and 2022 World Cups.” The Mail on Sunday reports that five officials with connections to FIFA are at the center of the investigation. But FIFA’s ethics judge Hans-Joachim Eckert said there was not enough evidence to question the entire bidding process.
Awarding the 2022 World Cup to Qatar has been particularly controversial. Qatar said earlier this month it will not be able to keep its promise to hold the 2022 World Cup in the summer — completely disrupting European football seasons and potentially clashing with the Winter Olympics — its original $US200 billion construction proposal has already seen 12 stadiums cut to eight, and the country’s football body is continually fending off accusations of poor workers’ conditions and a mounting death toll, which at the last report stood at around 900.
A Coca-Cola spokesman told The Sunday Times: “Anything that detracts from the mission and ideals of the FIFA World Cup is a concern to us.
“The current conflicting perspectives regarding the investigation are disappointing. Our expectation is that this will be resolved quickly in a transparent and efficient manner.”
Coke has sponsored the tournament since 1974. Its current contract with FIFA lasts until 2022 and is estimated, by sponsorship experts BrandRapport, to be worth £75 million ($US117 million) over a four year period (the World Cup takes place every four years.)
Some 40% of FIFA’s commercial revenue comes from sponsorship, advertising and ticket sales, while the rest comes from TV broadcasting. FIFA reported revenue of $US4 billion (£2.4 billion) in the 2011-14 period. The figures highlight just how important the continued financial support of sponsors is to the organisation.
Adidas, another top tier sponsor of the tournament, which is signed up with FIFA until 2030 with a contract estimated to be worth £95 million ($US149 million) over a four year period, has been less damning in its response to the corruption investigation. The sportswear manufacturer told The Sunday Times it was planning to discuss the report with FIFA directly.
McDonald’s, a tier two sponsor, has said it is “monitoring the situation.”
Meanwhile, earlier this month Emirates announced it was ending its sponsorship of the World Cup, after an eight year partnership with FIFA. The Dubai airline’s contract was due to come to an end in 2014 anyway, but put out a statement saying the decision not to renew was made “following an evaluation of FIFA’s contract proposal which did not meet Emirates’ expectations.”
Most people took that to read that Emirates was uneasy about the corruption claims surrounding the bid process for the World Cup, particularly the 2022 tournament held in Dubai. However, the decision may also have been made because the brand is in a far more prominent place than it was back in 2006, and the brand awareness opportunity a World Cup can offer is no longer necessary.
Sony’s contract also comes to an end this year and the company is also rumoured to be the next to opt not to renew.
Outside of brand partners, the English, German, Dutch, Belgian, Swedish and Danish football federations have also all criticised FIFA for not publishing the full 350-page corruption report.
But despite the very public outcry over FIFA’s handling of the World Cup bidding process, most sponsorship experts Business Insider has spoken to don’t think a widespread boycott is likely — despite the potential damage to sponsors’ brands by being associated with football’s governing body if it is found guilty of any wrongdoing, or if anything goes wrong at one of the tournaments.
Nigel Currie, director at sports marketing and sponsorship agency BrandRapport told Business Insider: “Unless they all get together to put pressure on FIFA…there’s a question of whether sponsors have influence. I think it’s unlikely they will all come together. The World Cup is such a valuable property to these brands that they need to be part of it — and if they pull out, their main competitors will be all to glad to step in.
“All major sponsorship contracts will have embarrassment or insurance clauses if something significant happens [like the unlikely event that the World Cup was held in a war zone] or if they can prove it has fundamentally negatively impacted on their business.”
It appears Coke’s attack on FIFA may well be a none-too-subtle reminder that these clauses are firmly in place.
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