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Beautiful blame

28 May 2015 By Peter Thal Larsen

Corporations hold the key to cleaning up FIFA. American prosecutors accuse soccer officials and marketing executives of channelling cash from sponsorship and media rights deals into their own bank accounts. Big companies will always pay up to attach their brands to hugely popular global sporting events. They also have the power to demand much-improved audit trails.

Like frustrated fans, multinationals have responded to the accusations as if shouting from the sidelines. Adidas and Coca-Cola have called on FIFA to increase transparency. Visa says it is reassessing its support for global soccer’s ruling body, which raked in revenue of $5.7 billion between 2011 and 2014. That’s good. But it ignores the reality that corporate sponsorship, as currently organised, is part of the problem.

The United States government’s 166-page indictment describes how middlemen and agencies helped channel payments from big multinationals into kickbacks for bureaucrats. For example, the indictment says Japan’s Toyota and Santander of Spain paid a combined $75 million to sponsor the Copa Libertadores, South America’s leading club competition, between 1998 and 2012, The current sponsor, tyre maker Bridgestone, paid $57 million for a five-year deal.

There’s no suggestion these companies knew that some of their cash was lining the pocket of Nicolas Leoz, who headed South American soccer’s governing body until 2013, as the U.S. prosecutors allege. Negotiating in secret with an intermediary may have allowed companies to cut a better deal. However, commercial confidentiality makes it hard to keep track of how much money is in play, let alone where it is going.

Take Nike, which is co-operating with the U.S. investigation over its role in a 10-year, $160 million sponsorship deal with Brazil’s national team. In its last full financial year the sportswear giant spent $3 billion on what it calls “demand creation”. Any further details are scarce.

There’s little chance that companies will suddenly turn off the money hose. Even if established sponsors and media partners pull out, substitutes will step in. But if companies insisted on being more forthcoming about how much they were paying, and to whom, it would be a big step toward cleaning up FIFA.

 

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