FIFA Crisis Grounds Search for $200 Million World Cup Sponsor

The FIFA scandal is hurting the global soccer organization’s ability to attract new sponsors, outgoing Secretary General Jerome Valcke said.

Criminal inquiries in the U.S. and Switzerland, where FIFA is based, have created a crisis at the 111-year-old body and pushed President Sepp Blatter to announce he would step down just four days after winning a fifth term in May.

FIFA, which derives more than 90 percent of its revenue from the World Cup, hasn’t been able to replace top sponsors Sony Corp. and Emirates, which ended their relationships with the group in December. Valcke suggested in April FIFA could be looking for as much as $200 million for a top-tier global partner.

“Definitely the current situation does not help to finalize any new agreement. That is a fact,” Valcke said Friday in St. Petersburg ahead of this weekend’s qualifying draw for the 2018 World Cup.

Blatter said Monday his replacement would be chosen at a special election on Feb. 26. Valcke said it’s unlikely any sponsors would sign on before then.

That’s in contrast to comments he made to Bloomberg in April when he said “new sponsors are coming very soon” and suggested Korean electronics maker Samsung and Qatar Airways were in discussions. Agreements have “to be signed by the end of 2015,” he said in the interview.

Valcke, who’s been FIFA’s secretary general since 2007, said he expects to leave with Blatter. During the pair’s tenure, the organization has become richer even as accusations of impropriety against senior officials grew. Until recently, sponsors kept their criticism to a minimum.

That changed after the U.S. Department of Justice said FIFA officials received bribes and kickbacks that were meant to influence the awarding of media and marketing rights, along with the choice of the host country for the World Cup. A Swiss criminal investigation is looking at the decision that ended with Russia and Qatar winning the rights to stage the next two tournaments.

Visa Response

Visa Inc. on Thursday joined Coca-Cola Co., FIFA’s oldest partner along with Adidas AG, in criticizing the reform plans. Visa called FIFA’s response to the crisis “wholly inadequate.”

“Two things need to happen to ensure credible reform,” Visa’s Chief Executive Officer Charlie Scharf said on a conference call. “First, an independent, third-party commission led by one or more impartial leaders is critical to formulate reforms. Second, we believe no meaningful reform can be made under FIFA’s existing leadership.”

FIFA has created an internal task force to come up with corporate governance reforms that will be voted on by its 209 members in February. The group rejected similar reform efforts in the past.

Valcke said FIFA received a joint letter this week from sponsors calling for a summit to discuss the situation. He said the meeting would take place next month.

The task force is likely to be led by Domenico Scala, the independent chairman of FIFA’s audit and compliance body. The Swiss businessman, who began his role at FIFA in 2012, is also responsible for a committee overseeing the presidential election.

FIFA is targeting revenues of almost $6 billion from the World Cup in Russia. FIFA made $5.72 billion during the last four-year cycle, including $1.58 billion in marketing income from the Brazil World Cup.

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