- Title: SOCCER-FIFA/ARRESTS-SPONSORS FIFA faces warnings from sponsors
- Date: 28th May 2015
- Summary: SEOUL, SOUTH KOREA (FILE) (REUTERS) VARIOUS OF HYUNDAI HEADQUARTERS EXTERIORS LOS ANGELES, CALIFORNIA, UNITED STATES (FILE - OCTOBER 2011) (REUTERS) VARIOUS OF MCDONALD'S RESTAURANT EXTERIORS LEUVEN, BELGIUM (FILE) (REUTERS) (MUTE) PHOTOGRAPH OF AN ANHEUSER-BUSCH INBEV SIGN OUTSIDE THE BREWER'S HEADQUARTERS (MUTE) UNIDENTIFIED LOCATION (FILE) (ORIGINALLY 4:3) (REUTERS) VARIOUS OF MAN DRINKING BUDWEISER BEER IN BAR
- Embargoed: 12th June 2015 13:00
- Topics: General
- Reuters ID: LVAA928VBVHFUDK8GRSX9M2LFNU6
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: THIS EDIT CONTAINS MATERIAL WHICH WAS ORIGINALLY 4:3
Sponsors mounted pressure on FIFA to act fast to restore the reputation of the game after senior officials were arrested on corruption charges.
Visa Inc has threatened to end its sponsorship if soccer's governing body does not take "immediate steps" to address issues within its organization.
In a statement, Visa called on FIFA to rebuild with a culture of "strong ethical practices in order to restore the reputation of the games for everywhere".
The statement from Visa was the strongest so far as sponsors lined up to express concern about the scandal engulfing the world's most popular sport and their customers took to social media to threaten a boycott of brands associated with FIFA.
Sponsors are trying to balance the growing sensitivity of consumers to corruption, human rights abuses and environmental issues against their relationship with the organization that holds the keys to a billion soccer fans worldwide.
"This is really a tricky situation because it's been the worst kept secret in sports. Everyone's known there has been something cooking, going on there. But the marketers and the sponsors need to reach those fans. They need to connect with the fans and until now, there was no other way to get around this problem. Now, hopefully, they will clean it up and the sponsors will do the right thing and be able to maintain their linkage to football and soccer," said Allen Adamson, a branding and advertising expert.
U.S. prosecutors issued an indictment on Wednesday (May 27) accusing nine officials from soccer's world governing body and five sports media and promotions executives of bribes involving more than $150 million (USD) over 24 years.
Sponsors have long faced risks to their brands from sports scandals ranging from doping to match fixing to misbehavior of top players on and off the pitch.
Sponsors including Nike Inc dropped American cyclist Lance Armstrong in 2012 after he was banned for doping, but Germany's Adidas decided last year to stick with Uruguay's Luis Suarez after FIFA banned him for nine matches for biting an Italy defender.
FIFA's longest standing partners are Adidas and Coca-Cola Co.
Adidas has been the provider of the World Cup match ball since 1970 and has a partnership lasting until 2030, while the current deal for Coca-Cola, which has had a formal association since 1974 and has advertised in every World Cup stadium since 1950, lasts until 2022.
That perhaps explains why they stopped short of threatening to cut ties like Visa, the world's largest credit and debit card company, which only became a FIFA partner in 2007 and recently extended the relationship until 2022.
"The financial risk is there is no other easy way to reach those millions of fans around the world, and sports and football is hugely popular. The fans don't have an issue with the game. They have an issue with the organizing committee. So they need to somehow sidestep the organizing committee and connect directly with the fans," said Adamson.
Adidas, which is the world's biggest manufacturer of soccer balls, boots and shirts, side stepped outright criticism, calling instead for FIFA "to continue to establish and follow transparent compliance standards". Its shares fell 1.5 percent on Thursday.
Adamson said companies need to pay close attention to the developments in the FIFA scandal and be prepared to act quickly.
"They should pay close attention, be very agile and be able to move quickly should the situation change. Because consumers are watching. Everyone is watching. And unfortunately, this won't go away too quickly. The legal investigations drag on. This is not going to necessarily disappear in 30 seconds. So they have to play for the long game."
Meanwhile, Nike, which is not a FIFA partner but is challenging Adidas' dominance in soccer by sponsoring many of the world's top players and teams, said it was cooperating with authorities after it was indirectly identified in the U.S. indictment in relation to a 1996 deal with the Brazil team.
U.S. Attorney General Loretta Lynch declined to comment on whether there was any liability for companies that had won marketing rights and if they were being investigated. But she said "the investigation is continuing and covers all aspects."
She declined to comment when asked if one of the companies was Nike.
Nike later said in a statement it was "concerned by the very serious allegations, adding: "Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery."
FIFA's main sponsors were already getting uneasy even before the latest revelations.
Adidas, Visa and Coca-Cola all made statements last week pushing FIFA to take seriously the issue of rights for migrant workers in Qatar, responding to reports of abuses at the 2022 World Cup construction sites.
That came after campaigners designed spoof ads for major FIFA sponsors subverting their brand images, including a Coca-Cola can dripping with oil and the iconic three stripes of Adidas tweaked to look like a line of gravestones.
The pressure only mounted after Wednesday's news, with social media full of appeals for brands to cut ties with FIFA.
"It's a tricky situation because consumers don't have to wait for the Justice Department to make their ruling. They can vote with their pocketbook. And millennials are particularly concerned with not only what the company sells, but how they act and how they behave. So around the world, they have to balance and be very agile, managing both connecting with consumers, but also realizing that consumers expect more than just a great shirt, a great sneaker, a great product, a great beverage, a great hamburger. They expect the company to do the right thing and live by the rules and set a good example," said Adamson.
South Korean automaker Hyundai Motor, the sole Asian FIFA partner for the 2018 World Cup due to be held in Russia, said it was "extremely concerned" about the legal proceedings, while Bud-owner Anheuser-Busch InBev and McDonald's Corp said they were in contact with FIFA.
Meantime, Airline Emirates and Japanese electronics maker Sony Corp announced in November they would not renew deals with FIFA, although rivals Qatar Airways and Samsung are reportedly in talks to replace them.
Emirates and Sony were among FIFA's six main partners who together paid a total of $177 million in 2014 for the right to advertise in World Cup stadiums and use the FIFA trademark.
A source familiar with the Sony decision said suspected corruption was one factor behind Sony's withdrawal although the main reason was the high cost of the sponsorship deal.
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