Visa issued the sternest response to the FIFA corruption charges, saying it might withdraw its sponsorship. Photo credit: Entertainment Management Online
The FIFA corruption scandal illustrates the risk of sponsoring events, teams, celebrities and programs — and the need for brands to prepare to respond to crises caused by the sponsored organizations.
Seven senior officials of FIFA, the group that runs the World Cup, were arrested in Switzerland last week on U.S. corruption charges and faced extradition. U.S. authorities also charged 14 high-level FIFA officials, and sports and marketing executives with racketeering and other charges. The charges involve about $150 million in bribes for exclusive television contracts over a period of 24 years.
The arrests caused an uproar. Commentators have called for football associations to boycott FIFA and for its President, Sepp Blatter, to resign.
The charges pose a crisis for World Cup sponsors as well as FIFA. Leading sponsors include high-profile global brands such as Visa, Coca-Cola, Anheuser-Busch’s, McDonald’s, Hyundai/Kia and Budweiser.
What Sponsors are Saying
Offering the strongest response, Visa threatened to reconsider its sponsorship if FIFA doesn’t shape up. “Our disappointment and concern with FIFA in light of today’s developments is profound,” it stated.
The response from McDonald’s was more typical. The company called the situation “extremely concerning” and said it will “monitor the situation very closely.” In weaker response, Adidas said it’s committed to high ethics and compliance standards and urging FIFA to follow transparent standards.
Anheuser-Busch provided an even weaker answer, said Thom Weidlich, managing director of PRCG | Haggerty. It stated: “We expect all of our partners to maintain strong ethical standards and operate with transparency.”
In a situation like this, Weidlich recommends that a statement should include at least these three elements:
- outrage over the behavior,
- affirmation that the behavior goes against the sponsor’s own ethics, and
- notice that the sponsor has been in contact with the body governing the event.
Place at Arm’s Length
Sponsors should put FIFA at arm’s length and stress that they support the game itself rather than the organization behind it, Anastasia Kourovskaia, a brands expert at agency Millward Brown, told the BBC. Sponsors may also wish to consider forming their own committee to pursue ethical practices.
The scandal, she predicts, may encourage brands to become more involved in smaller, grass-roots events that may be more complex and costly to support rather than huge affairs that can tend to be more prone to scandal.
A bookmaker is offering odds on which sponsor will pull out first, according to the BBC. Visa is seen as most likely, followed by Hyundai-Kia. Russian gas firm Gazprom, which has said the scandal will not influence its sponsorship, has the lowest odds of withdrawing.
Some PR experts question if any corporations will withdraw sponsorships. The problem is that a competitor would quickly replace them. Losing sponsorship for the World Cup, an event that’s second only to the Olympics in brand marketing, could be a financial disaster, pointed out Erika Kauffman, general manager and executive vice president at 5W Public Relations.
Bottom Line: World Cup sponsors are walking a fine line in the FIFA corruption scandal. If they remain in involved in the event, they may suffer PR damage through association with the soccer organization. If they drop sponsorship, they would forfeit a branding bonanza. In varying degrees, brands are pressuring FIFA to reform and eliminate corruption.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
