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The World Cup

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No sporting event is more popular than the World Cup. Almost half of humanity — more than 3.2 billion people – tuned in to the month-long competition in Brazil in 2014. But long before nations compete on the field, they vie for the prestige of hosting the tournament that generates billions of dollars in television and sponsorship rights for FIFA, soccer’s ruling body. That competition can spell trouble. Graft scandals have dogged previous tournaments as well as upcoming events in Russia and especially Qatar, raising the question: Is corruption indelibly staining the beautiful game?

The Situation

It's been a challenging few years for the Fédération Internationale de Football Association. Its long-time president, Sepp Blatter, was banned from soccer for six years, five top officials pleaded guilty to corruption-related charges in the U.S., and its vice president was arrested by Spanish police investigating graft claims. Yet Russia and Qatar, the 2018 and 2022 World Cup hosts, were exonerated by a FIFA probe into allegations surrounding their bids, clearing the way for the next tournament to begin in Moscow on June 14. The wider scandal erupted in 2015 when dozens of soccer executives were arrested in Swiss police raids on a luxury Zurich hotel and the U.S. Justice Department filed multiple charges relating to bribery allegations involving hundreds of millions of dollars. The U.S. probe has led to more than 20 convictions, including that of the deceased American, Chuck Blazer, whose whistle-blowing revelations spurred the inquiry. Blatter's successor as FIFA president, Gianni Infantino, has pledged to restore the ruling body's reputation, but multiple corruption investigations continue, including FIFA's own inquiry into the awarding of the 2006 World Cup to Germany and a French state probe into the Russian and Qatar winning bids. FIFA may be feeling the pinch: In the two years after the scandal broke, it failed to attract new major sponsors from Europe or the U.S., striking deals with partners from only Qatar and China, an aspiring World Cup host. Added to that, its legal bills are mounting. 

 

The Background

Disputes over where to hold the event have afflicted the World Cup since it began in 1930. Then, the selection of Uruguay resulted in only four European teams taking part. Uruguay and Argentina boycotted the 1938 competition because Europe was hosting it for the second straight time. FIFA experimented with a rotation system; now, it will take bids only from those continents that haven’t staged either of the last two tournaments. Recent history shows there is little — if any — financial benefit to holding the World Cup. South Africa recouped just a 10th of its outlay on stadiums and infrastructure for the 2010 event, the first in Africa. Recent World Cup hosts were chosen in a secret vote by the two dozen members of FIFA’s executive committee (now called the FIFA Council). Blazer alleged that he and other committee members accepted bribes in connection with the selection of South Africa. For the 2026 tournament, all of FIFA’s 200-plus member countries will get to choose the winner in a vote in May 2020. There are two bids: one from Morocco and a joint bid by the U.S., Canada and Mexico.  

The Argument

Blatter said FIFA deliberately pushed the tournament into “new lands” to spread soccer’s popularity and give countries a chance to showcase their culture. Critics highlight the money-losing proposition for developing nations, such as Brazil, that spend billions of dollars on facilities which might be better invested in other ways. Others say the selection process is made a farce by a voting system that has bred foul play, from horse-trading votes to straight up paying for them. While FIFA says it wants to root out its problems and has made changes to its corporate governance, as well as the World Cup selection process, critics say the moves haven’t gone far enough and the ruling body remains resistant to scrutiny and transparency. They question whether appropriate reforms can be carried out by officials long part of the system and argue that FIFA’s one country-one vote system opens the door to skullduggery by giving disproportionate sway to smaller nations. Detractors note that it took pressure from the big corporate sponsors, which each pay about $1.6 billion per World Cup, rather than from FIFA itself to push for Blatter’s removal and press for Qatar’s bid to be investigated. In a 2017 poll of 25,000 soccer fans from 50 countries, 98 percent said they were concerned about corruption at FIFA, with more than half having no confidence in the organization.

The Reference Shelf

  • An Amnesty International report about workers’ rights in Qatar and a Human Rights Watch report on the exploitation of foreign workers building's Russia's stadiums.
  • Washington Post: How a curmudgeonly old reporter exposed the FIFA scandal that toppled Sepp Blatter.  
  • Guardian article on the American FIFA executive who took bribes before turning whistle-blower.
  • FIFA's new process for selecting a World Cup host.
  • Bloomberg Businessweek chronicled Sepp Blatter’s dominance of international soccer in April 2015.
  • The BBC detailed FIFA’s corruption woes.
  • Full text of the U.S. government’s indictment against nine FIFA officials and five corporate executives. Full text of a second U.S. indictment against 16 other FIFA officials and guilty pleas from two former FIFA executives.
  • “Brazil’s Dance With the Devil,” a 2014 book by Dave Zirin.
  • A report on the impact of the 2006 World Cup in Germany, and South Africa’s report about the 2010 tournament. A study by the accounting firm KPMG that includes an analysis of the 2010 event in South Africa and a Bloomberg News article about its legacy for Johannesburg commuters.
  • John Oliver, host of “Last Week Tonight” on HBO, ranted about FIFA in a June 2014 broadcast.
  • A 2016 report by law firm Freshfields Bruckhaus Deringer, in German, on the award of the 2006 World Cup to Germany. FIFA began an investigation into six individuals following the report.

    Tariq Panja and Eben Novy-Williams contributed to the original version of this article. 

    First published June 10, 2014

    To contact the writer of this QuickTake:
    James Ludden in London at jludden@bloomberg.net

    To contact the editor responsible for this QuickTake:
    Grant Clark at gclark@bloomberg.net

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