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World Cup Sponsors’ Situation Is Complex

The New York Times, May 28, 2015

By Richards Sandomir

World Cup sponsors demonstrated various levels of caution in their responses this week to the United States Justice Department’s indictment of nine FIFA officials on corruption charges.

The sponsors did not threaten to drop their deals, but Visa, the most indignant, said that it would “reassess our sponsorship” if FIFA did not change its ways.

The sponsors did not criticize any of the individuals indicted. They did not mention Sepp Blatter, the powerful president of FIFA, who was not charged. Instead, they focused largely on broad, nonspecific concerns about ethics and the allegations, with little elaboration.

But Visa’s statement stood out among the sponsors who made comments.

“Our disappointment and concern with FIFA in light of today’s developments is profound,” the company said Wednesday. “As a sponsor we expect FIFA to take swift and immediate steps to address these issues within its organization.”

Coca-Cola said: “This lengthy controversy has tarnished the mission and ideals of the FIFA World Cup, and we have repeatedly expressed our concerns about these serious allegations. We expect FIFA to continue to address these issues thoroughly.”

McDonald’s said that it “takes matters of ethics and corruption very seriously,” and Adidas said it was “fully committed to creating a culture that promotes the highest standards of ethics and compliance.”

Adidas added, “We expect the same from our partners.”

Jim Andrews, a senior vice president of IEG, a sponsorship research and valuation firm, said that sponsors who were otherwise satisfied with their association with the World Cup as an event would be under pressure to dissociate themselves from FIFA, which has been the subject of corruption allegations for years.

“They know that fans of the sport make a very distinct separation between their love of the World Cup tournament, their national teams and favorite players, and in some cases, their hatred for FIFA,” Mr. Andrews said. “In an ideal world, sponsors would be able to do the same thing, but it’s not as easy. A lot of groups will demand that they take a stance against the type of corruption that’s charged here.”

Phil de Picciotto, president of Octagon Worldwide, a sports marketing company, said that sponsors were cautious when asked to respond immediately to issues like the FIFA indictments because they have not had time to speak to their stakeholders — business partners, customers or shareholders.

“Stakeholders expect two things,” Mr. de Picciotto said. “One, that you will respond quickly to show that you’re on top of things and paying attention, and two, to make a decision about the steps you will take. Those two elements don’t have to happen at the same time, which is why you find caution in the first element.”

Mr. de Picciotto suggested that sponsors should not have been surprised by the indictments, given the prolonged speculation about corruption within FIFA.

“It’s such a powerful property,” he said. “It’s had a lot of consistency over the decades about how it’s been managed and by whom.”

Mr. Andrews said that the World Cup was such a potent asset that companies would have to think carefully about exercising any possible option to escape their contracts.

“If you walk away from this incredibly valuable marketing opportunity,” he said, “you’re allowing your competitor to take it.”