Visa threatens to pull FIFA sponsorship: Will other brands follow suit?

Visa has threatened to withdraw sponsorship support from FIFA, finally making its exasperation public in the wake of multiple scandals.

 

If the company follows through, this might have a "domino effect" on remaining sponsors Coca-Cola, McDonald’s, Kia/Hyundai, Adidas, Budweiser and Gazprom.

 

The majority of sponsors have condemed FIFA after two corruption probes were launched by U.S. and Swiss authorities this week.

 

This comes only weeks after the organization was slammed for ongoing human rights issues in Qatar, where hundreds of migrant workers are thought to have died during the construction of World Cup 2022 sites.

 

This toxic combination, plus FIFA's own strained history of sponsor relations, might mean the World Cup has finally lost its sparkle for the world's top brands.

 

There are several major problems for FIFA now. Will more sponsors follow suit and pull out?

 

Simon Rines, editor-in-chief of sports marketing research agency IMR, points out that this is not the first time FIFA has been challenged by sponsors.

 

Sony, Emirates, Johnson & Johnson and other sponsors have pulled out in previous years, though not all for ethical reasons.

 

Rines told Campaign’s sister title Marketing: "There are several major problems for FIFA now. Will more sponsors follow suit and pull out?

 

"It is almost certain that they will have clauses that allow them to do so if they can demonstrate that the organization is either behaving unethically or bringing adverse publicity on them as sponsors."

 

Crunchtime for FIFA

 

Rines added that FIFA would have difficulty replacing tier-one sponsors who do drop out. He said: "FIFA seeks to align itself with number one brands in its various categories.

 

"If, for example, Adidas withdrew, would Nike step in? It's highly unlikely given that Nike tends prefer national federations and individuals rather than partnering 'mega-events'."

 

This is crunch time for FIFA, the sponsors will be watching what happens over the next few weeks very carefully

 

Likewise, MasterCard may not be the obvious replacement for Visa, given previous strained ties with FIFA.  

 

Rines said that Pepsi might find FIFA "too risky" in wake of recent events. Meanwhile, major car brands such as Toyota, Chevrolet and Nissan have all committed their sponsorship budget to the Olympics, Manchester United and the Champions League respectively.

 

Rines added: "I would say that this is crunch time for FIFA, the sponsors will be watching what happens over the next few weeks very carefully and if they are not reassured, then a mass exodus is certainly possible."

 

The ugly game

 

Trevor Cairns, CEO of agency Love and former Umbro CMO at Nike, said this week’s arrests "should be a watershed moment" for the sponsors.

 

He told Marketing: "I say should, because if this was any other organization in any other sport, brands would have run a mile and action would have been taken long ago to clean up the sport. 

 

"However, I’ve worked in football long enough to know that sadly there are elements of the beautiful game that are ugly and remain so."

 

Both Cairns and Rines questioned the longevity of FIFA's brand if top sponsors pull out. Rines predicted a possible reduction both in rights fees and stature of sponsors, while Cairns said brands who don't push for change at FIFA would become "tarnished" by association.

 

He said: "For years there’s been rumors, claims, counter claims, denials and media scrutiny, but I believe this criminal investigation, particularly coming in the wake of the terrible issue around the welfare of migrant workers in Qatar, means FIFA sponsors must now use their power to demand root and branch reform of the organization."

 

(This article first appeared on marketingmagazine.co.uk)