No.1 sponsors could desert suspect FIFA

That four of the biggest FIFA sponsors Coca-Cola, Adidas, Visa and Emirates have registered their concern over recent allegations of corruption surrounding football’s governing body is highly significant for several reasons.

Sponsors have an enormous stake in FIFA, providing it with around 40% of its income. The recent past illustrates that sponsors don’t tend to get involved in controversy, at least publicly, unless they are seriously concerned.

Two have already withdrawn from high-profile contracts as a result of scandal. Coca-Cola dropped Wayne Rooney following the footballer’s liaisons with prostitutes, and Adidas withdrew from the Tour de France in 2008 because of doping scandals. Morality clauses in contracts make it quite easy for a sponsor to withdraw if it feels there are strong enough grounds.

The danger to FIFA is that if one sponsor pulled out, there might be a domino effect if others felt that the public might consider their ethical stance to be inferior to that of a rival. That would already be a massive blow in terms of confidence and short-term finance, but the long-term considerations suggest that commercially it would be devastating.

Many FIFA sponsors are first in their respective sectors: Coca-Cola is bigger than Pepsi, Visa is bigger that MasterCard, McDonald’s is bigger than Burger King and Budweiser is bigger than Heineken. If FIFA loses a leading sector sponsor it will have to approach the next best one, in which case its fee will be significantly lower. An organisation of FIFA’s stature strives to be first and to rub shoulders with the best.

With no allegations proved, especially those directed at Sepp Blatter, it is likely that the sponsors will hold fire. They want to be part of the World Cup and would have to be pushed to the limit to quit. But the pressure exerted in private will be much stronger than that in public, and will grow if increasingly savvy consumers use social media to call for sponsor boycotts.

Simon Rines
Publisher
International Journal of Sports
Marketing & Sponsorship

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