Crisis? Hardly! This is business and FIFA’s World Cup just got a lot more valuable
IMD Professor Reacts: Seán Meehan on the current FIFA corruption scandal
June 1, 2015
To the frustration of reformists, Sepp Blatter has been re-elected President of FIFA despite sensational dawn raids and longstanding accusations of widespread corruption. Detractors now call on sponsors to use their economic power, withdraw support and force FIFA's hand on issues of leadership and the bidding processes.
This is not going to happen. This storm strengthens FIFA's hand. The World Cup will be more valuable, FIFA's coffers fuller, and the leadership, those that avoid criminal prosecution, more secure. Sponsors will not withdraw because it is not in their interests. We've been here before.
The 1998 session of the International Olympic Committee (IOC) was disrupted on news that votes had been "bought" in the process of awarding Salt Lake City the 2002 Winter Games. 24-hour saturation media coverage was damning. The US Senate investigated. Sponsors protested and threatened to withdraw support. One sponsor, insurance giant John Hancock, removed the iconic Olympic rings from its materials and tried to rally sponsors from words to action.
Ultimately, some of those accused were sanctioned by the IOC, others were expelled. None were convicted. The IOC implemented governance reforms and the sponsors, including John Hancock, not only stayed put, they spent unprecedented sums to renew their sponsorships. Far from making the Olympics "toxic", the crisis enhanced its value. Consumers realizing their much loved Games had been placed in jeopardy, paused to examine what it is about the Games they love and why. Consumers engaged with and reaffirmed their support for its ideal. The bond was stronger than ever.
The sponsorship value of the Olympic Games and World Cup emanates from organizations associating with positive emotions experienced by consumers as they anticipate, experience and reflect upon the events themselves – not the sports administrators. They follow teams and individuals. They cherish the contests that bring the elite sportsmen and women together in world-class competition. They resent the misconduct of those who jeopardize these contests. These crises serve to remind consumers of what they love about these contests and heighten their affection and attachment to them. More engaged consumers equate to a more valuable marketing property.
Expect sponsors to make noise and advocate reform but do not expect them to abandon the sports that served them so well.
Seán Meehan is the Martin Hilti Professor of Marketing and Change Management at IMD. He directs the Breakthrough Program for Senior Executives (BPSE), which caters to a carefully selected group of senior executives searching for game-changing moves in their business through high-impact strategy and leadership.