The big bucks brands spend to use FIFA’s trademarks likely impacted Sepp Blatter’s decision to resign.
A week ago today (on May 27), United States prosecutors issued an indictment accusing nine FIFA officials and five other executives of racketeering, wire fraud, money laundering, and other charges relating to more than $150 million in bribes. Simultaneously, Swiss authorities announced an investigation into the bidding process for the 2018 and 2022 World Cups. Most big soccer fans will tell you, FIFA had it coming.
Despite the ongoing corruption scandal, on Friday, the much maligned President of FIFA, Sepp Blatter, was re-elected to a fifth term.
Many people were not pleased with this result. I am going to let John Oliver explain this one:
Then, yesterday happened. In a stunning turn of events, Sepp announced that he would resign as President.
So, what happened between Friday and yesterday to force Sepp to step down?
Likely, two things: (1) The ongoing investigation was drawing closer to the President – his number two was linked to a possible $10 million bribe related to the 2010 World Cup in South Africa; and (2) pressure for reform from the brands that support FIFA was continuing to mount.
Let’s talk about the latter. Since the scandal broke, soccer fans around the world had turned their attention toward the brands that sponsor FIFA to take action.
Images began appearing all over the Internet blaming FIFA’s sponsors for the scandal and other atrocities FIFA has been accused of perpetrating (some mentioned in the video above).
My beloved Men in Blazers took to Twitter when it appeared Blatter’s re-election was imminent and called on the public to push FIFA’s sponsors for change, claiming it was the only way.
XThe Men in Blazers were onto something. Fans began calling for a boycott of FIFA sponsors. That is a big deal because recent reports indicated that FIFA (a non-profit) generated $5.7 billion from 2011 through 2014, with sponsors and commercial sponsors contributing a whopping $1.6 billion of that tally.
FIFA’s six main partners – Adidas, Visa, Coca-Cola, McDonald’s, Budweiser, Hyundai – paid a total of $177 million in 2014 alone for the right to advertise in World Cup stadiums and use the FIFA trademark.
After paying that much money to use a trademark, FIFA’s partners were not be happy with all of the negative publicity.
Prior to Blatter announcing his resignation, Visa took the hardest line, threatening to end its sponsorships, while other sponsors, including Hyundai indicated that they were “extremely concerned.”
After Blatter announced his resignation each of the six main sponsors released a statement praising FIFA for the decision. Here is a rundown (h/t to PR Week):
Adidas: “We welcome FIFA’s commitment to change. As stated before, the Adidas Group is fully committed to creating a culture that promotes the highest standards of ethics and compliance. Today’s news marks a step in the right direction on FIFA’s path to establish and follow transparent compliance standards in everything it does.”
Budweiser: “We expect today’s announcement to accelerate FIFA’s efforts to resolve internal issues, install positive change and adhere to the highest ethical standards and transparency. We look forward to the beauty of the game taking centre-stage again for football fans around the globe.”
Coca-Cola: The soda company called Blatter’s resignation “a positive step” and pushed FIFA to “act with urgency” to “win back the trust of all who love the sport of football.” The company further stated, “We believe this decision will help FIFA transform itself rapidly into a much-needed 21st century structure and institution.”
Hyundai: The auto company called Blatter’s resignation “a positive first step in creating a governance structure that ensures the highest ethical standards for the sport.”
McDonald’s: “Football has the unique ability to bring the world together while positively impacting communities and economies. The allegations of corruption and questionable ethics within FIFA have overshadowed the game and taken away from the sport, players and fans.
“We’re hopeful that the changes being implemented within FIFA will be a big first step in positively reforming the organisation and gaining back trust from fans worldwide.”
Visa: “We are encouraged by the recognition by FIFA that extensive and fundamental reform is needed as reflected by the announcement that President Blatter is resigning and that FIFA will be undergoing a ‘profound overhaul’. This is a significant first step towards rebuilding public trust, but more work lies ahead.”
Visa further stated, “It is our expectation that FIFA will take swift and immediate steps towards addressing the issues within its organisation to quickly rebuild a culture with strong ethical practices that will restore the reputation of the game for fans around the world. We look forward to understanding the nature and scope of the intended reforms in the very near future.”
FIFA certainly will do everything it can to please its sponsors and continue its lucrative licensing and sponsorship activities as the 2015 Women’s World Cup kicks off in Canada later this week and businesses begin looking toward the 2018 World Cup.