Allegations of malpractice at the international body which governs soccer have spanned decades, but up until now it has not had to face any real consequences. However the decision to allow Qatar to host a World Cup during its searing hot summer provoked a rash of investigations into alleged corruption, and journalists have dug up evidence of vote-trading and bribery during the reign of executive director Sepp Blatter.
Naturally FIFA has refuted these rumors and employed former U.S. prosecutor Michael Garcia to carry out an internal investigation. Suspicions were raised after the organization did not release the full report, preferring to send out its own edited summary. Garcia has since claimed that the summary contains “numerous materially incomplete and erroneous representations of the facts and conclusions.”
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It would seem that Garcia’s comments were enough to make corporate sponsors reconsider their association with FIFA. Emirates Airlines has already decided not to renew its deal with the organization, with state-owned Qatar Airlines unsurprisingly being touted as a possible replacement. The loss of Sony Corp (ADR) (NYSE:SNE) (TYO:6758) is a completely different proposition, with no state-owned equivalent which can be persuaded to join up with FIFA.
An impending rash of desertions?
Leagues of other sponsors such as The Coca-Cola Co (NYSE:KO), adidas AG (ADR) (OTCMKTS:ADDYY) (ETR:ADS), Hyundai Motor Co (KRX:005380), Visa Inc (NYSE:V), and Budweiser have criticized FIFA’s handling of the investigation, but have yet to sever sponsorship ties. It would seem unlikely that companies would desert the very organization which controls one of the most-watched television events in the world.
So far McDonalds have said that they will be “monitoring the situation,” and Adidas stated their intention to speak directly with FIFA on the matter of corruption. Coca Cola is one of the organization’s most visible sponsors, and was more damning in its criticism with a spokesman claiming the company was “disappointed” by the conflict between Garcia and FIFA.