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Friday, November 4, 2011

Emirates considers dropping World Cup sponsorship because of FIFA corruption



By James M. Dorsey

Emirates Airlines is taking the lead in expressing widespread concern among FIFA’s corporate sponsors about the world soccer body’s handling of the worst corruption scandal in its 107-year history.

“We are seriously thinking about not renewing our partnership with FIFA beyond 2014,” Emirates divisional senior vice president of corporate communications Boutros Boutros told Australia’s B&T Media.

FIFA expressed surprise at the comment and said it was seeking clarification from Emirates. It said that it has “very positive relationship with all of our commercial affiliates and media rights licensees.” It said sponsors had demonstrated their confidence in FIFA by extending contracts until the 2022 World Cup.

Emirates said in a statement that it has “not yet commenced discussions with FIFA on the extension of our partnership agreement beyond 2014. Discussions will begin in due course.”

FIFA generated about $4 billion from television and marketing contracts for the last World Cup, held in South Africa in 2010. It’s sold out its global sponsorship packages for the next tournament in Brazil in 2014.

Nonetheless, a series of FIFA corruption scandals in the past year that have spooked sponsors, who pay millions to be associated with the World Cup, sport’s most-watched event. FIFA president Sepp Blatter has vowed to stamp out corruption.

In the worst of multiple scandals, FIFA in July banned for life its vice president and suspended Asian Football Confederation (AFC) chief Mohammed Bin Hammam from involvement in soccer because of an alleged attempt to bribe Caribbean Football Union officials. Mr. Bin Hammam, a Qatari national, has denied any wrong doing and is appealing his ban.

FIFA has further given executive committee member Worawi Makudi until December 1 to prove that FIFA development funds were invested in property belonging to the Thai football association rather than himself.

A British parliamentary committee this week demanded that FIFA launch an independent investigation into the last December’s awarding of the 2018 and 2022 World Cups to Russia and Qatar.

Brazilian authorities have requested Swiss court documents that allegedly link Ricardo Texeira to money laundering and kickbacks involving FIFA as well as International Olympic Committee (IOC) officials, including Nicolas Leoz and Mr. Makudi as well as African Football Confederation chief Issa Hayatou. The scandal is to be discussed next month at separate IOC and FIFA executive committee meetings who will be presented by a report into the scandal first disclosed by the BBC that was drafted by the IOC’s ethics committee.

Emirates signed an eight-year contract with FIFA in 2006 worth $195 million. Along with other lead partners, including Adidas AG, Sony Corp., Visa Inc. and Coca-Cola Co., it expressed concern about claims of impropriety within the organization in May when Mr. Bin Hammam was initially suspended and withdrew his challenge to Mr. Blatter in a FIFA presidential election.

Emirates’ Mr. Boutros suggested that the Dubai airline was considering its sponsorship of the World Cup because of FIFA’s lack of transparency.

“As a sponsor you expect they will come and write to you in the middle of the issue or at the end of it. To them they act as if it’s nothing for sponsors. For us, in our history of sponsorship, it is the only event that when it happened our clients started writing to us saying ‘why do you support this organization?’ We don’t get into politics but we believe the situation with FIFA went beyond an internal problem and became much bigger,” Mr. Boutros said.

James M. Dorsey is a Senior Fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University and the author of the blog, The Turbulent World of Middle East Soccer

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