Sony Should Extend World Cup Sponsorship, Brazil Executive Says

Sony Corp. should extend its sponsorship with soccer’s governing body FIFA and the World Cup beyond next year’s tournament, according to the president of its Brazil operation.

Sony’s two-tournament deal ends after the 2014 edition in Brazil. Osamu Miura, president of Sony Brasil Ltda., said officials at the electronic goods maker’s headquarters in Tokyo have yet to negotiate an extension to the company’s biggest sponsorship.

“I really hope Sony headquarters will decide to continue because the next World Cup after Brazil will be Russia, and after Russia will be Qatar,” Miura said in an interview. “These markets are also very important for Sony.”

Brazil’s importance to Sony has grown over the past decade, and the country is now ranked in the top “five or six” biggest markets, according to Miura, who didn’t provide financial details. “Russia is also one of the BRIC countries so for us it’s very important,” he added, referring to Brazil, Russia, India and China.

Sony’s rise in Brazil has matched the growth in the size of the middle class in South America’s biggest country.

“We took 12 years to double size of company, then in three years we doubled again,” said Carlos Paschoal, Sony Brasil’s marketing and communications director.

FIFA recently underwent a reform program following complaints from stakeholders including sponsors after corruption allegations against senior officials. Even after the criticism none of its sponsors, which include Coca-Cola Co. and Hyundai Motor Co., pulled out. FIFA generated $350 million from World Cup-related sponsorship last year.

FIFA spokeswoman Delia Fischer said yesterday the organization doesn’t comment on ongoing negotiations.

Adidas Relationship

Last month Adidas AG, the world’s second-biggest sporting goods manufacturer, extended its agreement to 2030, meaning its relationship with FIFA would have been unbroken for 60 years.

“The World Cup is very important for Sony,” Miura said during last week’s draw for the competition, which runs from June 12 to July 13. “We are expecting huge growth, a golden six months may come for us.”

Sony, Japan’s biggest electronics exporter, is pushing its new ultra high-definition 4K television after giving up on 3D technology. A 65-inch version of the latest model costs around $10,000 in Brazil, far more than it would in the U.S. or Europe because of higher taxes. Sony has to manufacture most of its goods for sale in Brazil in Manaus, the capital of the Amazon region, because imports would push consumer prices even higher, according to Miura. For the rest of the world goods are produced in China and Japan.

Overshadowed by Protests

Television sales this year during the Confederations Cup, a test event for the World Cup, were lower than expected because the competition was overshadowed by protests in the country’s biggest cities including Rio de Janeiro, Sao Paulo and the capital, Brasilia.

“At that time it was very unfortunate because lots of demonstrations happened and they blocked the streets every day,” Miura said. “People couldn’t go to the shopping center so we lost all opportunity during the Confederations Cup.”

At the height of the protests a million people took to the streets complaining about inequality, political corruption and the $11 billion price tag of the World Cup in a country with poor health and education. Coca-Cola covered up its display in front of Rio’s Maracana Stadium, the venue for the event’s final, as protestors clashed with police firing tear gas and rubber bullets.

Special Measures

Miura said Sony had to take special measures to ensure its corporate guests were not affected. Steps included leaving hotels “much earlier” than planned and increasing the security detail. Organizers say there may be more demonstrations during the World Cup.

“If they do we will create some barriers from them,” Miura added.

Sony plans to distribute 2,000 tickets to consumers in Brazil, and will offer thousands of others to its retailers and other clients. At the 2010 World Cup in South Africa sponsors were criticized for leaving banks of empty seats in matches that sold out to the public.

“We will never have tickets in our hands,” said Paschoal, explaining that the company has contingency plans if an invited guest fails to show up. One measure is to distribute tickets to a Brazilian children’s charity the company has partnered with, he said.

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