Are FIFA's sponsors staying put?
The world of power-punching sponsorship has never been as fickle as it is in the world of sport.
Unlike the music and film industry, scandal and impropriety are in no way ‘brand enhancers.’ “No publicity is bad publicity” definitely doesn’t bode well with sponsors.
Take Nike. After irrefutable proof of doping emerged, they dropped Lance Armstrong so fast his Tour de France t-shirts were still wet with the ink of his printed moniker. He had breached the codes of his contract, so Nike took the legal option available to them and ran with it.
Sponsor giants cannot, and will not, bear the brunt of any act or behaviour derogatory to their brand images. This actually becomes a sticking point when we take a look at the very recent FIFA controversy. In January, we were told that Castrol, Sony, and Emirates had jumped ship on the World Football’s Governing body, which along with Johnson & Johnson and Continental’s departure, left a huge hole in the £1 billion sponsor bank. Interestingly none of these companies blamed the problems on FIFA directly.
The deal breakers:
- Sony: One of the original Fifa 'partners’, they signed a £160 million contract in 2005. They renewed a seven-year deal in 2007, only after rival’s Philips’ association ended.
- Johnson & Johnson: Signed as the Brazil World Cup’s official healthcare sponsor in 2011, they have since decided against renewing their deal for Russia’s tournament in 2018 or beyond.
- Castrol: Made history in 2008 with the biggest deal in FIFA’s 100-year history.
- Continental: A sponsor since 2003, they were given the option to extend after the 2014 World Cup. They declined.
- Emirates: They became a sponsor at the 2006 World Cup, but decided not to continue beyond 2014, as the contract terms “did not meet expectations.”
The latest spate of allegations and indictments of multiple FIFA officials seemed a shoo-in for a mass sponsor exodus. However, although the rumour mill is buzzing with oohs and ahhs from the current sponsors, it’s surprisingly Visa that have risked breaking a confidentiality clause to state:
“As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organisation. Should FIFA fail to do so, we have informed them that we will reassess our sponsorship.”
With the human rights abuses and alleged corruption being aimed at individuals within FIFA, rather than the organisation as a whole, this does not fall within their ‘morals clause’. Otherwise, any company wishing to disaffiliate would be under threat of ‘significant consequences’ for breach of contract - ouch!
Putting the moral issues and scandalous element of the situation aside, there are other grounds for ‘staying put’ that go way beyond financial penalties. Nick Johnson, director for the European Sponsorship Association, explains:
"It’s all very well saying they should walk away, but does that really help? They’ve got established relationships, they’ve got leverage, it’s going to be easier for them to work within existing parameters than for any new sponsor coming in."
What to do about Blatter?
With the sword of CSR hanging heavy over sponsors’ heads, along with the combination of media pressure and social media interest, many of the brands are keeping their cards close to their chests. The current sponsors include:
- Adidas: FIFA's oldest sponsor, having been a partner since 1970. Their current deal is worth up to £95m over a four-year period and valid until 2030.
- Coca-Cola: Their deal is worth £75m over a four-year period, valid until 2022.
- VISA: Their deal began in 2007 and was extended until 2022.
- Hyundai: Hyundai’s deal, reportedly worth £182m, runs until 2022.
- Gazprom: They have a four-year deal with FIFA including the 2018 World Cup in Russia.
- Budweiser: They’ve been World Cup sponsors since 1986 in Mexico and have valid agreements for the 2018 and 2022 tournaments.
- McDonalds: A sponsor since 1994.
It remains to be seen how they will react to the recent resignation of FIFA president Sepp Blatter. Many saw him as the toxic element in world football, and have since been calling for a major review and restructuring of the organisation.Maybe, just maybe, the brand giants will err on the side of caution and break deals - no matter what the consequences.