Visa Threatens to Ditch FIFA as Sponsor Dismay Mounts

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Visa Inc has told FIFA it could end its sponsorship if soccer's governing body does not act fast to restore the reputation of the game after senior officials were arrested on corruption charges.

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The statement from Visa was the strongest so far as sponsors lined up to express concern about the scandal engulfing the world's most popular sport and their customers took to social media to threaten a boycott of brands associated with FIFA.

Sponsors are trying to balance the growing sensitivity of consumers to corruption, human rights abuses and environmental issues against their relationship with the organization that holds the keys to a billion soccer fans worldwide.

"Our disappointment and concern with FIFA in light of today’s developments is profound. As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organization," Visa said.

"This starts with rebuilding a culture with strong ethical practices," it said. "Should FIFA fail to do so, we have informed them that we will reassess our sponsorship."

U.S. prosecutors issued an indictment on Wednesday accusing nine officials from soccer's world governing body and five sports media and promotions executives of bribes involving more than $150 million over 24 years.

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Airline Emirates [EMIRA.UL] and Japanese electronics maker Sony Corp announced in November they would not renew deals with FIFA, as corruption allegations mounted around the bidding process for the next two World Cups in Russia and Qatar.

The two were among FIFA's six main partners who together paid a total of $177 million in 2014 for the right to advertise in World Cup stadiums and use the FIFA trademark.

A source familiar with the Sony decision said suspected corruption was one factor behind Sony's withdrawal although the main reason was the high cost of the sponsorship deal.

CLOSE TIES

FIFA's longest standing partners are German sportswear company Adidas and Coca-Cola Co.

Adidas has been the provider of the World Cup match ball since 1970 and has a partnership lasting until 2030, while the current deal for Coca-Cola, which has had a formal association since 1974 and has advertised in every World Cup stadium since 1950, lasts until 2022.

That perhaps explains why their reactions to Wednesday's news were more muted than Visa, the world's largest credit and debit card company, which only became a FIFA partner in 2007 and recently extended the relationship until 2022.

"This lengthy controversy has tarnished the mission and ideals of the FIFA World Cup and we have repeatedly expressed our concerns about these serious allegations," Coca Cola said.

Adidas, which is the world's biggest manufacturer of soccer balls, boots and shirts, stopped short of outright criticism, calling instead for FIFA "to continue to establish and follow transparent compliance standards".

Meanwhile, Adidas' arch rival Nike Inc, which is not a FIFA partner but sponsors many of the world's top teams, said it was cooperating with authorities.

The indictment said that in 1996, a global sports company, which was not identified in court documents, agreed to pay $40 million in "marketing fees" to an affiliate of the marketing agent of the Brazil national team with a Swiss bank account.

That was an apparent reference to Nike, which sponsors the Brazil national team.

U.S. Attorney General Loretta Lynch declined to comment on whether there was any liability for companies that had won marketing rights and if they were being investigated. But she said "the investigation is continuing and covers all aspects."

She declined to comment when asked if one of the companies was Nike.

Nike later said in a statement it was "concerned by the very serious allegations, adding: "Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery."

OTHER SPONSORS BRISTLE

FIFA's main sponsors were already getting uneasy even before the latest revelations.

Adidas, Visa and Coca-Cola all made statements last week pushing FIFA to take seriously the issue of rights for migrant workers in Qatar, responding to reports of abuses at the 2022 World Cup construction sites.

That came after campaigners designed spoof ads for major FIFA sponsors subverting their brand images, including a Coca-Cola can dripping with oil and the iconic three stripes of Adidas tweaked to look like a line of gravestones.

The pressure only mounted after Wednesday's news, with social media full of appeals for brands to cut ties with FIFA.

"Adidas, Visa, Coca-Cola, McDonald's, Budweiser, Hyundai: stop supporting corrupt FIFA or I stop buying your brands," wrote Stefan-Joerg Goebel on Twitter.

The Institute of Directors (IoD), a leading UK authority on corporate governance, said risks were mounting for sponsors.

"They have a responsibility to their shareholders to make certain that the company’s cash is not going towards sporting events mired in bribery and corruption allegations," said Roger Barker, IoD director of corporate governance.

South Korean automaker Hyundai Motor, the sole Asian FIFA partner for the 2018 World Cup due to be held in Russia, said it was "extremely concerned" about the legal proceedings, while Anheuser-Busch InBev and McDonald's Corp said they were in contact with FIFA.

Australian sportswear company SKINS, which announced in a tongue-in-cheek campaign in January that it was the first "official" FIFA non-sponsor, urged the brands to clean up FIFA.

"The only people FIFA will listen to are the sponsors. The real money is with the broadcasters but their brands aren't exposed in the same way as the sponsors," said SKINS chairman Jaimie Fuller.

But brand experts were skeptical of a mass exodus of FIFA sponsors.

“The value of the sponsorships is very high or they wouldn’t be prepared to pay so much for it," said Interbrand Chief Executive Jez Frampton. "Football is one of the few global properties that enables you to connect with people around the world."

Rob Prazmark, president of 21 Sports & Entertainment Marketing Group, a global sports and event sales agency said companies were unlikely to pull their sponsorships altogether.

“These sponsors put a lot of money into associating with the World Cup,” Prazmark said. “They’ll give them a little bit of time to get their house in order.”

(Additional reporting by Lindsay Dunsmuir, Nate Raymond, Steve Slater, Ando Ritsuko and Hyunjoo Jin; Editing by David Stamp and Giles Elgood)