29th May 2015
The never-ending series of financial scandals means FIFA continues to dominate headlines across the world for all the wrong reasons. Along with the arrests of 14 people – nine of them FIFA officials – the US Justice Department’s 47-page indictment contains some eye-catching language and charges.
The numbers will doubtless rise as US and Swiss investigators continue their work, but currently it’s thought that the amount of corruption involved totals £100m.
All of which further underlines the fact that football is a big, global business.
During 2011 to 2014 – a period covering the World Cup in Brazil – FIFA enjoyed revenues of $5.72bn, along with a record profit of $338m. The key revenue streams were the sale of the tournament’s television and marketing rights, with global sponsors including Adidas, Coca-Cola, Gazprom, Hyundai/Kia Motors, Visa and Budweiser queuing at FIFA’s door.
But what’s interesting about the indictment is the time frame – the reference to 24 years of fraud coincides with FIFA’s decision to embrace globilisation and expand the “beautiful game” into new corners of the world.
1994 saw the World Cup on US soil for the first time. Eight years later it was Asia’s turn when South Korea and Japan co-hosted the tournament – and in 2010 FIFA continued to expand into new territory when the event moved to Africa.
Football – and FIFA – had gone global. Job done.
Key to its growth over those decades were advances in technology – and in particular the explosion in cable TV companies, which enabled FIFA to deliver its product into an unprecedented number of homes around the world.
Central to FIFA’s globilisation plan was the world’s largest and most dynamic country, the USA. From a marketing and merchandising point of view, the World Cup had to make inroads into mainstream America – and the marketing budgets of its blue-chip corporates.
But in doing so, FIFA unwittingly moved out from under the protection of Swiss law and within sight of US regulators and their strict currency and banking laws.
The Department of Justice is able to bring charges against FIFA officials and marketing executives in much the same way that it can bring charges against a foreigner accused of terrorism.
If a suspected criminal has any link to the United States, Washington believes it has the authority to charge them with a crime. The reality is that although FIFA is a global player, its focus on globalisation has made it vulnerable to the laws of the world’s most powerful country.
I suspect the irony of this is not lost on those in charge of the “beautiful game”.
