Sports sponsorship in an era of scandal – how should brands respond?

Reports of corruption have dogged FIFA and the IAAF in recent months, so with high profile sporting events – namely the Olympics and Euro 2016 – taking place this year, what stance should sponsors take?

Sports marketers have plenty to look forward to this year, but ample reason for concern too. The UEFA Euro 2016 football tournament in France and the Rio Olympics both offer brands huge opportunity to reach diverse and engaged global audiences, but they will take place against an unprecedented backdrop of scandal and claims of corruption at the highest levels.

These challenges should prompt sponsors to tread carefully with their communications strategies. While the default stance for most brands is to remain silent in the face of a scandal, events have escalated to the point where sponsors are speaking up and playing a more active role in the politics of sport.

Sponsors call for change

Last May, Visa threatened to “reassess” its sponsorship of the World Cup if FIFA did not “take swift and immediate steps” to address the issues within its organisation. Meanwhile, Coca-Cola said it had “repeatedly expressed” its concerns about the serious allegations and expects FIFA to “continue to address” the problem as it has “tarnished the mission and ideals of the FIFA World Cup”.

The two brands, together with sponsors McDonald’s and Budweiser, took further action in October when they called for FIFA president Sepp Blatter to resign.

This drastic intervention followed a tawdry period for FIFA in which Swiss authorities arrested 14 officials on corruption charges and opened criminal proceedings into the awarding of the 2018 and 2022 World Cups to host nations Russia and Qatar. The scandal continued last month when Blatter and UEFA president Michel Platini were banned for eight years from all football-related activities after a FIFA ethics committee investigation into a payment of 2 million Swiss francs (£1.4m) by Blatter to Platini. Both plan to appeal.

Claims of systemic wrongdoing at FIFA have rumbled on for decades, but the scale of last year’s allegations and arrests prompted the sponsors to call for an overhaul of the organisation. In a statement, Coca-Cola said: “Every day that passes, the image and reputation of FIFA continues to tarnish. FIFA needs comprehensive and urgent reform.”

The question for brands using sporting events as a marketing vehicle is whether this action was a one-off born of extreme circumstances, or whether it signifies a new approach to sponsorship in which brands must act to bolster trust in increasingly damaged sports.

Sponsors contribute $1.63bn (£1.12bn) – around 28.5% – of FIFA’s revenues every four years,  so their intervention was seen as a major blow to Blatter’s position. It may even have influenced the FIFA ethics committee’s decision to ban him two months later.

Coca-Cola, McDonald’s and Visa are also worldwide partners of Rio 2016, so they could take similar steps to make their voices heard in athletics. The sport is grappling with the biggest scandal in its history after senior figures from the International Association of Athletics Federations (IAAF), including former president Lamine Diack, were arrested last November on suspicion of accepting bribes to protect Russian athletes who had failed drugs tests. A few days later, the World Anti-Doping Agency published a report accusing Russia of running a huge state-sponsored doping programme.

New IAAF president Sebastian Coe has pledged to restore trust in the sport but as investigations are ongoing it will be challenging, especially as one of his aides was implicated in the alleged cover-up in December. Lord Coe also reluctantly stepped down from his role as a paid ambassador of sportswear giant Nike after criticism that it created a conflict of interest. He said at a press conference that the “current noise” was not good for Nike or the IAAF.

Big events retain brand appeal

Despite the unusual activism of sponsors in relation to FIFA, it is unlikely this will herald a new era in which brands play an active role in combating corruption in sport. None of the sponsors threatened to withdraw their funding when Blatter initially refused to stand down, nor have they commented further in public about the new direction they would like FIFA to take. Some sponsors, such as Adidas, stayed out of the argument altogether.

Andy Clilverd, commercial director at sports marketing agency Stadia Solutions, argues that given the huge global audience of events such as Euro 2016 and the Olympics, sponsors will refrain from commenting on corruption except in the most acute circumstances. While FIFA and the IAAF may be under pressure as governing bodies, the events they organise still retain mass appeal.

He says: “The real question is: has what the sponsor bought into materially changed? There will still be billions of people watching Euro 2016 and the Olympics as they’re fantastic events and the sponsors will still get millions of impressions.”

Clilverd suggests that sponsors can counteract negative perceptions about their brands by publicising the positive aspects of their sponsorship, such as their investment in grassroots sport. He also warns that brands risk facing their own accusations of corruption if they become overly involved in the affairs of a governing body.

“People wouldn’t look kindly on sponsors if they started saying ‘we’ll put more money in or pull money out if you do this’,” he says. “That’s the same as any other form of bribery.”

Kelly Williams, managing director at media rights group Sports Revolution, agrees that sponsors have limited room for manoeuvre, but argues that they can play a positive role in helping to reform governing bodies.

“They should put the focus on the fact that, as sponsors, they are there for the fans and that as part of that role they are getting their hands dirty by cleaning up the mess behind the scenes,” she says. “Otherwise, you just look like a ‘superbrand’ that’s not making any decisions whatsoever.”

There are few examples of sponsors that have walked away from a sport on ethical grounds. In 2014, property website Zoopla ended its deal with West Bromwich Albion FC after one of its players, Nicolas Anelka, made an alleged racist gesture on the pitch.

Williams notes that given the greater levels of investment involved – and the potential returns – it is difficult for brands linked to FIFA or the Olympics to pull out. But she believes that all brands should prepare for the worst and decide on the “red lines” that would finally cause them to end a sponsorship. “You have to know your exit strategy, depending on where that hard line is,” she says.

In light of the endless stream of bad news circulating around FIFA and the IAAF, such forward thinking seems wise, even with the Rio Olympics and Euro 2016 fast approaching.



There is one comment at the moment, we would love to hear your opinion too.

  1. Stu Powell 18 Jan 2016

    With all the negative publicity surrounding corruption in elite sport, wouldn’t it be refreshing to see the big brands investing directly in grassroots sport. Nike sponsoring a local football club, Adidas a village cricket club etc etc

    This would in turn drive local brand loyalty, create distinct and memorable PR and could be easily incorporated into the overall brand strategy.

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