Business

FIFA sponsors like Scotiabank, Coke and Visa demand change as scandal rocks soccer world

Worried that their reputations will be tarnished by their links to FIFA, major sponsors are demanding that soccer's global governing body clean up its act, with some even saying they are prepared to jump ship.

Sponsors provide almost one-third of FIFA's revenues

Renee Filippone reports that major sponsors are threatening to rethink their relationships with FIFA, but would they really abandon such worldwide exposure 2:29

Worried that their reputations will be tarnished by their links to FIFA, major sponsors are demanding that soccer's global governing body clean up its act, with some even saying they are prepared to jump ship.

On Wednesday, seven officials were arrested in a dawn raid at a luxury hotel in Zurich while Swiss prosecutors opened criminal proceedings into FIFA's awarding of the 2018 World Cup to Russia and the 2022 tournament to Qatar.

Coca-Cola was one of the loudest corporate voices condemning an organization it gives millions of dollars a year to, in order to associate itself with the world's most popular sport. 

"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," the company said in a statement.

But Visa provided the most acute criticism, saying it expects the organization to take "swift and immediate steps to address" its issues.

"This starts with rebuilding a culture with strong ethical practices in order to restore the reputation of the games for fans everywhere," it said in a statement late Wednesday. "Should FIFA fail to do so, we have informed them that we will reassess our sponsorship."

Canadian companies swept up

Canadian financial firm Scotiabank is a major sponsor of soccer events organized by CONCACAF, a feeder-organization for FIFA that governs the sport in North and Central America.

The president of CONCACAF, Jeffrey Webb, was one of the men arrested this week.

"We are deeply disturbed by these allegations involving CONCACAF officials and take them very seriously. We have zero tolerance for these types of actions from any of our partners," a spokesman with the bank said in a statement.

"We are monitoring the situation very closely and will review our involvement as more details become available."

The range of companies involved more or less directly with FIFA and the soccer world is large.

FIFA's partners, which are companies that support the soccer body through long-term contracts, include Adidas, Coca-Cola, Visa, Gazprom and Hyundai/KIA Motors. They have the right to use official FIFA trademarks in their advertising campaigns, exposure in and around stadiums and protection against ambush marketing.

There are second-tier sponsors, too, such as Budweiser and McDonald's, who pay to be involved during and around the World Cup tournaments themselves.

Beyond those corporations, there are companies that make deals with national soccer associations. Nike, for example, pays to have the Brazilian national team wear its shirts.

Though Nike was not referenced in the Department of Justice indictment that lay behind Wednesday's dawn raids in Switzerland, a "multinational sportswear company headquartered in the United States" is mentioned with regard to bribery allegations involving Brazil stemming back to a sponsorship deal in 1996.

Without directly referring to speculation it is that multinational company, Nike said it was concerned by the "very serious allegations" and was cooperating with authorities. "Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery," it said.

Women's World Cup impact

A major FIFA event, the Women's World Cup, is set to kick off in Canada this summer. The unfolding scandal could leave sponsors who've spent millions to associate themselves with it in a tight spot, one sports marketing expert says.

With less than two weeks to go until the tournament starts, national sponsors including Bell Canada, Labatt Breweries of Canada and Trend Micro have little choice but to go on with the show, says Vijay Setlur, an adjunct sport marketing professor at York University in Toronto.

"Those deals are already in place, the money has already changed hands so to speak," Setlur said Wednesday. "So if anything, brands are probably trying to figure out how they can ensure these associations with corruption don't tarnish their own brand."

Setlur says that this close to the women's World Cup, which starts June 6 in Edmonton, brands will have to try to keep the message about soccer, not FIFA.

"At this stage it's more about emphasizing their own values as a brand, what soccer means to them, but also what soccer means to the communities that it serves," he said. "About teamwork and camaraderie, and fair play, and health and fitness and all those more positive associations."

A spokesman for Bell Media told CBC News in a statement that the company "will closely monitor the investigation as it continues to unfold."

Is the entire sport tarnished?

Because of their more direct connections with FIFA, the sponsors and partners are among the most exposed to damage to their brands.

They will be more inclined to seek change than to end their commercial relations with FIFA, however, as these marketing deals are too lucrative.

Corporations with long-term connections to the World Cup know that ending their relationships with FIFA could hand over to rivals what is, alongside the Olympic Games, one of the crown jewels in sports marketing.

Several big sponsors have in recent months shown a growing willingness to voice their concerns publicly about a string of recent scandals.

Just last week, Adidas, Coca-Cola and Visa urged FIFA to push Qatar to improve conditions for migrant workers as the small Arabian Gulf country prepares to host the 2022 World Cup.

The views of the sponsors aren't something FIFA can ignore, as the sponsors provide almost a third of its revenues. Recent figures showed that the organization generated $5.7 billion US in 2011-2014, which encompassed the Brazil World Cup, with sponsors and commercial partners contributing almost $1.6 billion US.

"When a business sponsors an event or association such as FIFA, it is effectively tying part of its brand with them," said Peter Walshe, Global BrandZ Director at London-based Millward Brown. "There needs to be a fit and when trust issues threaten the organization, the sponsor will need to monitor whether that will have a negative effect on the trust of the brand."

With files from The Canadian Press and The Associated Press

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