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FIFA Balance Of Power Tips From Sepp Blatter To Outraged Sponsors

Sepp Blatter’s days are numbered. And that number may not be a big one.

After 17 years atop sport’s most lucrative, powerful and seemingly corrupt organization, FIFA’s anachronistic president was dealt a major blow this week when the U.S. Department of Justice unsealed a 47-count indictment that painted soccer’s global governing body as a criminal enterprise involved in bribery, corruption, money-laundering, racketeering and fraud.

Blatter hasn’t been charged, but there have already been calls for his resignation, including from UEFA President Michel Platini. Yet Blatter, soccer’s “Teflon Don,” has repeatedly and improbably avoided sanction during his four decades as a high-ranking FIFA executive, though U.S. and Swiss officials are continuing their investigations.

Swiss authorities raided FIFA’s Zurich headquarters this week, seizing documents and electronic data as part of a separate criminal proceeding focused on the bidding for the rights to host the 2018 and 2022 World Cups. Those tournaments were awarded to Russia and Qatar, respectively, after a vote that a Sunday Times of London inquiry showed was influenced by millions of dollars in bribes.

The courts are no longer Blatter’s biggest concern, though. The pressure that will ultimately bring him down will come from the same people who built him up: corporate stakeholders who have helped FIFA’s revenue grow to more than $5.7 billion over the last four years .

In the wake of the indictments, VISA, which spent more than $31 million a year to be one of five official FIFA partners, issued a strongly worded statement that expressed “disappointment and concern” and demanded the organization rebuild “a culture with strong ethical practices.”

“Should FIFA fail to do so we have informed them that we will reassess our sponsorship,” warned the company, a FIFA partner since 2007.

Coca-Cola and Adidas, FIFA’s longest-tenured official partners, joined Budweiser and McDonald’s in echoing that call for reform.

FIFA President Joseph Blatter arrives for the opening ceremony of the FIFA Congress in Zurich, Switzerland. (Walter Bieri / EPA)
“This is the inflection point. The balance of power has shifted to the sponsors,” said Weston Anson, an expert in global marketing and intellectual property valuation. Blatter “has damaged the brand in ways that can be measured in billions of dollars.”

Anson has valued sponsorship and merchandise rights to the 2018 World Cup at $650 million but said that money, combined with the cachet sponsors bring to the event, creates a brand value of $5 billion for the event — a value that will drop by about 40% if major corporate partners turn their backs on FIFA.

Some already have. Sony, the Japanese electronics giant, abruptly ended a 10-year, $277-million partnership with FIFA last fall after Blatter quashed an internal investigation into the 2018 and 2022 World Cups votes. Emirates Airline also ended its lucrative relationship with FIFA last year.

So even if Blatter, as expected, wins reelection to a fifth term as president Friday, it’s unlikely he’ll serve much longer.

“He’s going to have to go,” said Anson, who added that FIFA’s corporate sponsors won’t be satisfied with anything short of substantial reform, the kind Blatter has repeatedly argued against.

“Who will be the sponsors and how will they be effective unless Blatter goes?” Anson continued. “His days are numbered because he just cost the World Cup about $8- to $10-billion in brand value. He just cost the next World Cup a reduction in sponsorship, merchandising and TV revenue somewhere in the neighborhood of $300 million.

“That’s why he’s got to go.”

But if Blatter leaves, the question becomes what happens next? Critics have long called for an end to FIFA’s penchant for secrecy and backroom deals, believing transparency and openness will make bribery and corruption more difficult. However, that won’t do near enough to restore the credibility of an organization that appears to be corrupt to its core.

As a start, Anson favors the formation of a panel within FIFA made up of administrators, sponsors, broadcasters and players. It’s that last group, the players, who have been most responsible for soccer’s success. Yet the players have long been denied a seat at the table where decisions about the game’s future are made.

“The first step is taking a real serious look at the organization,” echoed Mary Scott, president of sports and brand experiences for United Entertainment Group in New York. “How do you rebuild the structure? The reality is the actual World Cup, the players, the teams, have never been stronger. You only have to look at the rising of popularity of soccer around the world.

“When you think about sponsors, that is a big part of what they’re signing up for. And the last thing sponsors want is for that value to be tarnished by the political operation. It’s got to get back to the core mission of what FIFA is about and start to rebuild that.”