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Why Qatar's Tarnished 2022 World Cup Is A Safe Bet For Sponsors

Bloomberg Business Week, June 09, 2014

By Ira Boudway

Add sponsors to the list of those raising questions about Qatar hosting the 2022 FIFA World Cup. They can go just behind bettors, human rights monitors, environmental engineers, and former U.S. President Bill Clinton.

Over the weekend, FIFA global partners Sony and Adidas issued statements expressing their concern about the latest allegations of bribery in Qatar’s winning bid. Those were quickly followed by Coca-Cola, Visa, Hyundai, and Anheuser-Busch inBev. “As a FIFA partner, we expect these allegations to be investigated appropriately,” Sony spokesman George Boyd said in a statement that captures the general message. “We continue to expect FIFA to adhere to its principles of integrity, ethics, and fair play across all aspects of its operation.”

The brands that together pay hundreds of millions to be associated with the World Cup stopped short of making specific demands or issuing ultimatums. This was the corporate equivalent of parents telling a wayward child not to let them down. “These are very tempered statements,” says Jim Andrews, vice president for content strategy at sponsorship consultant IEG. “I think that is all we can expect at this point.”

A World Cup sponsorship always comes with downside risk. In Brazil, for instance, Coca-Cola and others are currently dealing with the fallout from political protests that have turned their anger toward FIFA. By the time the matches begin, however, the intense interest of the largest global audience in sports usually overwhelms any negative associations. Sponsors absorb the routine bad press about construction delays, corruption, and misspent funds—and then share in the glory of last-minute goals and deliriously happy crowds. “In some ways, these sponsors are like the fans” says Andrews. “They wish this wasn’t happening. They wish they could just concentrate on the matches and pretend it wasn’t going on.”

Comedian John Oliver described this exact fan mindset in a bit on his HBO show Last Week Tonight. After calling FIFA a “comically grotesque organization” and describing Qatar’s World Cup as potentially “the most deadly Middle Eastern construction project” since the Egyptian pyramids, Oliver confesses that he is “still so excited about the World Cup next week” in Brazil:

With Qatar, where bribery allegations come amid concerns about player and fan safety in the extreme heat and worker safety in a repressive labor system, FIFA is testing the limits of the existing calculus for sponsors. So far, however, the math still works.

“I would be hard pressed to say to a company that had a clear target market that was perfectly aligned with World Cup fans to say, ‘Don’t sponsor the World Cup wherever it is going to be,’” says Andrews. “I have yet to be surprised by the fans’ willingness to forgive and forget. If I had to put a bet on the line right now, even if it does happen in Qatar the way it’s planned right now, I think it still could be a successful World Cup and sponsors could still get a return on their investment.”

Qatar’s World Cup, for all its ugly preamble, is still a better investment than, say, a Donald Sterling-owned Los Angeles Clippers. Sponsors didn’t just express concern in that case—they ran for the exits. Those investments were smaller, easier to undo, and easier to renew. And the goodwill from backing out was probably greater than any exposure from the sponsorship.

With a cumulative TV audience in the tens of billions, the World Cup might need an actual smoking gun in the hand of FIFA President Sepp Blatter before Adidas or anybody else backs out.