When can advertising violate the Foreign Corrupt Practices Act? Perhaps that is not a question often on the minds of compliance officers. The ongoing FIFA corruption scandal, however, demonstrates that any expenditure going out of a corporation may well need to be considered from an anti-bribery angle. This would also include any company that paid out monies to become the product sponsor of any national soccer federation.
Yet what about companies that may have purchased the right to become sponsors of FIFA itself?
A number of marketing opportunities exist that FIFA has employed to generate huge fees for itself. These include television rights, marketing rights, hospitality rights and licensing rights. These rights generated up to $5 billion for FIFA leading up to the 2014 Brazilian World Cup. Who knows how much they could garner for the 2018 World Cup in Russia?
Yet these same sponsors may well be the greatest drivers of change at FIFA. Several sponsors have consistently spoken publicly about the need for FIFA to engage in meaningful reform for their business partnerships to continue going forward. If FIFA starts to feel a squeeze to its finances through its marketing arm, this could be one piece of the incentive puzzle to help move the organization forward—not only to clean itself up, but to institute the necessary changes for greater transparency going forward.
As for the sponsors, do they really want to be associated with a corrupt organization that cannot or will not clean itself up? Would there be reputational damage to any major sponsor of the 2018 World Cup for the actions of FIFA or even the host country Russia, for its recent admission of massive illegal doping of athletes?
I think that the market will impose a business response to the legal issues that FIFA has created with its ongoing corruption scandal. If FIFA does institute meaningful reform, its sponsor base should be more assured and less likely to stop the flow of money to the organization. The next few months, however, may well be telling with the long-overdue election of a replacement for Sepp Blatter (the president of FIFA, currently suspended) and filling out of the top executive slots in FIFA.
As for any U.S. companies which have been marketing partners with FIFA, you may want to take much closer look not only at those contractual relationships, but also perform a forensic audit to follow the money.