Hill+Knowlton Strategies 29 May 2015 // 8:03AM GMT
What an irony! The reason why Fifa top partners such as Coke, Hyundai, Visa and adidas have vested millions into football in the first place is because of its ability to help them emotionally connect with a global audience, that builds reputation, customer loyalty and ultimately sales. Some would say the absolute opposite is now true. Current allegations surrounding football’s world governing body remind us that modern day sport brings as much - if not more – reputational risk as it does opportunity.
Sponsor reaction has been unequivocal: Visa “… expect Fifa to take swift and immediate steps to address these issues within its organization”. Coca-Cola “… has repeatedly expressed concerns about these serious allegations and expect FIFA to continue to address these issues thoroughly”. adidas “…encourage Fifa to continue to establish and follow transparent compliance standards in everything they do”.
Surely the way to really hurt Fifa would be to cut off a vital revenue stream? After all, sponsorship fees delivered just over £1billion in commercial revenue to Fifa during 2011-14. However, this assumes sponsors have the contractual ability to get out?
Whether they can or not opens a debate about the need for all sponsors and rights holders to agree contracts that are absolutely clear on what constitutes a breach that triggers a right to terminate, especially in the notoriously contentious area of disrepute. There can be no ambiguity. Not liking something does not necessarily mean you can simply walk away. ”Fifa sponsor threatens to leave” is a powerful headline potentially grounded on weak legal foundation. A good partnership is built on knowing exactly what is expected of each party and what happens in the event of something going wrong.
This Fifa episode is also a reminder of the need to mandate professional issues and crisis management as part of any sponsorship planning process. Companies marketing their brand via third party associations have always been very good at planning for the best; less good at preparing for the worst. Reputation management has become a pre-requisite to helping companies deliver maximum ROI through sponsorship.
So whether existing sponsors are prepared to ride the storm or not remains to be seen. In the current climate, the bigger question must surround Fifa’s ability to attract new brands - and new revenues - to the less beautiful game.
Andy Sutherden is global sports practice director at H+K Strategies.