FIFA Loses Sponsor Emirates Amid World Cup Award Probe

FIFA World Cup Logo Sits On An Emirates Aircraft
Germany's Spiegel reported this weekend that FIFA is in talks with Qatar Airways to replace Emirates. Photographer: Jasper Juinen/Bloomberg

Emirates is dropping its sponsorship of FIFA, becoming the first backer to abandon soccer’s governing body after allegations of corruption linked to voting on World Cup hosts and the group’s presidency.

Emirates, the world’s biggest international airline, said it won’t extend the contract that began in 2006 and concludes this year.

“This decision was made following an evaluation of FIFA’s contract proposal which did not meet Emirates’ expectations,” the airline said yesterday in an e-mailed statement.

FIFA’s major partners -- Adidas AG, Coca-Cola Co., Hyundai Motor Co., Sony Corp. and Visa Inc. -- have helped the sport’s governing body generate $350 million in annual sponsorship. Last month, Michael Hershman, a one-time adviser to FIFA on corporate reform, criticized the companies for standing by while scandals unfolded.

“They have basically paid lip service so far to the issues of values and ethics and compliance and governance,” Hershman, a co-founder of Transparency International, said in an interview. “It’s time for them to come out more strongly, more forcefully.”

The companies haven’t done so yet, Hershman said, because there’s “too much at stake. It’s all about the money.” The World Cup, the world’s most-watched sporting event, generates $5 billion from television and marketing contracts.

Four of the top-tier sponsors have renewed through at least the next World Cup in Russia and Sony is in discussions about an extension.

Sponsors

“Due to the ongoing negotiations, we cannot give any further information about future partners in this category at this stage,” FIFA spokeswoman Delia Fischer said yesterday by e-mail.

Adidas, which sponsored nine teams at this year’s tournament including winner Germany and runner-up Argentina, said it was up to FIFA to comment when asked about Hershman’s criticism. Visa said it expects all of its partners to “maintain strong ethical standards and operate with transparency.” Coca-Cola and Hyundai didn’t respond to e-mailed requests for comment, while Sony declined to comment.

“I naively thought the bad reputation of FIFA in general cannot be good for the reputation of the ones who are marketing with the help of FIFA,” said Mark Pieth, a Swiss law professor who chaired an independent governance committee that advised FIFA on reforms for two years through December 2013.

Pieth says only about half of his group’s recommendations were implemented, and more could have been done had sponsors flexed their financial muscles.

Company Clout

“We need your clout here,” Pieth, a criminal law professor at the University of Basel who advises the World Bank on integrity issues, said he told the sponsors in meetings. Companies don’t abandon FIFA because competitors are lining up to take their place, he said.

Germany’s Spiegel reported this weekend that FIFA is in talks with Qatar Airways to replace Emirates. Qatar won rights to stage the 2022 World Cup in 2010, the same time Russia was chosen as 2018 host.

Former U.S. Attorney Michael Garcia investigated the voting process. FIFA will announce the results of the inquiry this month though its ethics head has said the report can’t be published in full. About one-third of the voters who participated in choosing Qatar as a World Cup host have quit or been suspended.

Sepp Blatter, FIFA’s 78-year-old president, will stand for a fifth term next year after earlier saying that his current term would be his last.

Vocal

Some sponsors did speak out before Blatter won a fourth term in 2011. Blatter’s only challenger Mohamed Bin Hammam was suspended following allegations he offered voters in the Caribbean envelopes stuffed with $40,000 in cash.

Emirates spokesman Boutros Boutros said after the presidential election that the airline was considering ending its agreement because of the corruption allegations at FIFA .

Adidas, committed to the soccer body through 2030, released a statement in response to a June report in the Sunday Times of London that Qatar offered bribes to host the World Cup. The company’s comment was almost exactly the same as one it issued in 2011.

The “negative tenor of the public debate around FIFA at the moment is neither good for football nor for FIFA and its partners,” it said.

Coke’s director of football management Amber Steele said last month the World Cup gave the company “a huge platform that we can use globally through all of our markets.”

Criticize Facts

Coke has sponsored the World Cup since 1978, and Steele said it had advertising campaigns around the event in 180 of 207 markets during this year’s World Cup in Brazil.

Steele, a former FIFA employee, fielded questions from journalists while she appeared on a panel at the Leaders Sport Business Summit in London about the damage done to her company’s brand by the links with FIFA. Thierry Weil, FIFA’s marketing director, also on the panel, came to her defense.

“Is it fair that you’re always saying that FIFA is not transparent and trying to put a sponsor in a situation and make them say something?,” Weil said. “Then tomorrow, this will be ‘Coke is not happy with FIFA.’ Guys, let’s once wait and then criticize on the facts that may have come out.”

It’s not a sponsor’s responsibility to change the behavior of an organization they’re endorsing, said Jonathan Hemus, a consultant who advised the International Cricket Council after it faced allegations of match-fixing and corruption a decade ago.

Still, “we must be getting near a tipping point,” where some may walk away, Hemus said.

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