While the extent of the criminal charges are eye-opening, the fact FIFA has shady areas within their realm should not come as a shock. FIFA's dance partners -- marketers, media and governments -- have plenty of cause to be concerned as the storm clouds hovered for years. The implications of the U.S. Department of Justice investigation into FIFA will cascade through the sports industry in the coming weeks, spilling beyond soccer's governing body. With an investigative playbook in hand, law enforcement will undoubtedly take a sharp look at the flood of dollars into global sports.
As the news cycle churns, marketers like Nike will brace for blowback and issue cooperation statements. It would be stunning if any major marketers or media companies are directly implicated in bribery. Such charges would be an unprecedented indictment of their internal audit protocols, especially if the subterfuge were hatched in a U.S. conference room. A more likely scenario will be brand-name companies being linked to the probe by coincidence. No matter the innocence, marketers should quickly assess their exposure. As the FIFA drama unfolds, three critical next steps emerge for all big-event marketers:
Define relationships. Intricate, global event marketing puts a premium on engaging local partners for in-field execution. FIFA's marketing partners should be checking their supplier lists to see if they paid money to anyone named by the FBI. The day after the news broke, Traffic Sports' website listed MasterCard, Kia, Santander, LG, Canon and Miller Lite as clients. Traffic Sports USA's President Aaron Davidson was one of those indicted. Words like racketeering and corruption should trigger a sprint to define those relationships. For all marketers, the FIFA situation underscores the importance of knowing your partners and their business standards.
Follow the money. The money involved in global sports is staggering with a total market value over $620 billion. Marketers forked over $1.6 billion in sponsorship to FIFA between 2011 and 2014, according to IEG. The activation budgets linked to those sponsorships are large enough to create million-dollar rounding errors. With $150 million in allegedly diverted money, the trail linking budgets with their final destination will become treasure maps. Even with the absence of mischievous intent, sums spent on "advisory" services will draw attention. Marketers will be forced to comb through payment data to validate their funds were spent as intended. If Nike is the "multinational sportswear company headquartered in the United States" reference in the indictments, they will be in a much strong position if they can show clearly that whatever fees were paid went for specific services at market prices. More broadly, the FIFA indictments should make it apparent to anyone involved in global sports that they should be establishing clear expectations and audit trails for in-market services for upcoming mega-events in Russia, Korea, Brazil, Qatar and even the United States.
Become proactive. As rumbling about FIFA's conduct grew louder in recent years marketers deliberately stayed out of the discussion. In contrast, many of those same marketers were quick to drop endorsement deals and pressure sports leagues over player conduct. Their outrage seems to end at the border of the sports field holding players to a different standard than a sport's overall infrastructure. With sports marketing budgets continuing to grow, the activities sponsored by those funds should come under more scrutiny. By expecting the same ethical behavior from their sports partners as they do from other suppliers, marketers may be able to avoid getting pulled into no-win situations. The FIFA indictments will not only open the door for overt marketer activism, it will also create an expectation for it. Companies that espouse noble corporate goals will certainly be challenged to back up those statements.