FIFA Sponsors Concerned About Corruption, But Few Pull Ads 2015-07-10

NEW YORK- Today, when news of a sports scandal breaks, it becomes a problem for everyone involved, including corporate sponsors and advertisers. They can pay a heavy price for their actions, or inaction.

"Sponsors and advertisers really have to react almost immediately when news of a scandal breaks," said Lee Igel, co-director of Sports & Society, a New York University academic program. "Before, in the past, even in the past handful of years, we've been able to see that there can be a little bit of a waiting. You can really try to read the market, read customers and see how people are feeling. Now, that no longer exists."

In the case of football's governing body FIFA, the stakes are particularly high, perhaps so high that no major sponsor has yet to pull out. Igel said there is too much money and too many years of planning involved for any sponsor to easily back down.

Meanwhile, four sports marketing executives and an unnamed "major U.S. sportswear company", widely presumed to be Nike, are at the center of investigations into alleged bribes and kickbacks.

Economist Fredy Marin said FIFA established its own set of financial rules, leaving corporations with little choice.

"The rules were there," Marin said. "The only thing that they had to do was accept it. They say, 'OK, if you want to advertise, you have to pay extra fees in order to gain your rights. Are you willing to do it?' 'Oh, is there another option? No! So, I have to do it.' "

Ethics and compliance expert Jeff Thinnes of JTI Inc., a business strategy consultant, thinks otherwise. He said corporations collectively carry heavy economic weight and influence, and only need to understand how to use it effectively.

"Of the roughly 12 tier-one and tier-two corporate sponsors, if you look at their collective annual revenue, you reach something like $450 billion," Thinnes said. "I mean, if they were a country, that would put them roughly 25th or 27th on the list of GNI top countries in the world."

Thinnes said that what's missing in the world of sports is an "integrity pact" - an agreement among competing corporations to increase transparency about how they pursue opportunities.