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With the publication of John Ruggie’s report on human rights at Fifa, football has sprinted forward. Now other sports must up their games
For many years, the business of sport has been seen as a massive marketing opportunity for some of the world’s biggest brands across all economic sectors. In 2015, sponsorship of sports topped $45bn, according to Statista.com.
“If it’s done correctly, it can have an enormous impact on your brand. It can be an incredibly powerful tool,” says Jon Lane, founder of consultancy Brand Affair.
But in recent years, some of the most popular sports have been hit by scandals that have rocked their governing bodies and caused sponsors to reconsider their involvement and even, in some cases, walk away altogether.
This is something that is now routine in the case of wrongdoing by individual athletes – witness the rapid disassociation of companies including as Nike, Tag Heuer and Porsche after Maria Sharapova, the world’s highest-paid tennis player, failed a drug test. But it is not so easy when you are sponsoring a global event such as the Olympics or the football World Cup.
Cycling and athletics have been rocked by doping scandals in recent years and their commercial support has suffered as a result. Rabobank and T-Mobile were among those that walked away from cycling in the wake of ongoing drugs scandals in the sport, including the downfall of the sport’s global icon, seven-time Tour de France winner Lance Armstrong. In 2015 the IAAF, governing body of athletics, saw Adidas and Nestlé, two of its biggest sponsors, walk away from the sport as it suspended Russia from international competition and doubts were raised over the integrity of Kenya’s anti-doping unit.
The most popular sport of all, football, has had to deal with a massive bribery scandal that has led to a number of arrests and the resignations of Sepp Blatter, former head of Fifa, the global governing body, and Michel Platini, who ran the European federation Uefa. Both have been banned from football-related activities for eight years after Blatter paid CHF2m (£1.4m) to Platini, his heir apparent to the top job.
There are also questions about the human rights of workers building stadiums in Qatar for the 2022 World Cup, who work under a system known as kafala, where for example visa status is often under the control of the employer, which often leaves migrant workers in situations of bonded labour. At other tournaments there have been concerns about forced evictions of poor communities to make way for stadiums and other infrastructure, and clamp-downs on freedom of expression among citizens and journalists. Other risks raised include risks to workers’ rights in Fifa’s own supply chains, alleged trafficking of young players, and endemic discrimination against women in the world of association football.
There have been questions about the governance of the world body that runs football for years, if not decades, but sponsors have been generally reluctant to speak out on the basis that it is not their place to tell governing bodies how to run the “beautiful game”.
Despite the size that sports governing bodies have become, and their increasingly commercial nature, they are not held to the same standards of governance as corporations because of their history. They started out as associations of amateurs, and their empires grew while they still enjoyed the rights of sports associations. “Until recently, Fifa had no policy on conflicts of interest, which is a pretty basic requirement,” says Professor John Ruggie, chair of Harvard University’s Kennedy School of Government’s Corporate Responsibility Initiative and a former UN special representative on human rights.
Ethical Corporation approached a number of companies to discuss sport sponsorship, including Nike, Heineken and Coca-Cola Enterprises, but they were either unwilling to talk or did not reply. “Sponsors will rarely be able to speak publicly about these issues as they will be bound by confidentiality clauses within their sponsorship agreements,” says Lane. “Public criticism would also lead to a breakdown in the relationship between the two parties, which would almost certainly mark the beginning of the end for the sponsorship. If a sponsor believes that the issues are resolvable they must exert their influence behind closed doors.”
However, last year Fifa’s brand had become so tarnished that sponsors finally felt compelled to act. While they prefer to avoid interfering in the sports they support, “sometimes it gets to the point where the public perception of the organisation is so bad that staying silent is worse than speaking out,” says Steven Slayford, a senior reporter at Sports Sponsorship Insider.
Visa said it would “reassess” its sponsorship unless Fifa took “swift and immediate steps” to deal with the issues it faced. When it looked as if the organisation was dragging its feet, it called on Sepp Blatter to resign as president, as did with fellow sponsors Coca-Cola, McDonald’s and Budweiser.
Bye, big names
“What also started to happen was conversations about renewals. A number of brands just walked away, including Sony, Johnson & Johnson, Castrol and Continental,” says Joel Seymour-Hyde, senior vice-president at Octagon, a global sports and talent agency representing rights holders and sponsors alike, including MasterCard, Sony, Uefa, Premier League and the FA. “They’ve not really been able to replace them.”
In response to the scandal, Fifa asked Ruggie to develop a series of recommendations “on what it means for Fifa to embed respect for human rights across its global operations”.
Ruggie wrote the UN Guiding Principles on Business and Human Rights, the global standard for the issue. Fifa must transform itself into a modern organisation, Ruggie said. “The prevailing social expectations of organisations with a footprint as large as Fifa’s, which wield great economic power and exert significant political influence, is that they must become more transparent and more accountable,” he added.
Fifa has reacted strongly to the report, Ruggie says, adding: “It now needs to put in place the internal machinery to develop a serious human rights policy.”
One of the recommendations in his report For The Game, For The World – Fifa And Human Rights is that “corporate sponsors, a major revenue source for Fifa … should contribute actively to ensuring that Fifa meets its new human rights commitment going forward”.
Sponsors have been very active in pushing for human rights measures in Fifa, not just because many of Fifa’s issues were human-rights-related but also because many sponsors have long been active in human rights issues and being associated with an organisation paying no attention to them had become awkward, Ruggie says.
“Sponsor want the entities in which they invest to be at least at the same level they are so that the companies are not always being used as a target to pressure the events they are sponsoring,” he adds.
As a result, companies are now scrutinising deals much more closely than in the past, says Lane. “Even five years ago brands would sign deals without doing a high level of ethical due diligence or having ethical break clauses in place,” says Slayford. “Now the lawyers are all over deals as sponsors become ever more aware of the ethical side of sponsorship. The new climate is not leading to shorter deals, but there is a lot more scope to walk away if a scandal erupts.”
Slayford adds: “Companies don’t like to get dragged into controversies because then sponsorship deals reach the CEO’s desk – and that’s not a good use of their time. So there is a lot more work at the pre-contract stage. The more these things can be kept out of the higher reaches of the corporation the better. It’s a trend that will continue.”
In addition, brands are becoming more cautious about signing up to new deals. “Once questions started being raised about Sepp Blatter, Fifa did not sign a deal for 2.5 years,” says Slayford. The organisation has also been selling a new regional sponsorship programme for three years, he adds, and until recently had not signed up a single sponsor anywhere in the world. It has recently signed one, yet to be announced.
China steps in
The only major agreement football’s governing body has managed to sign is a global deal to sponsor the next four World Cups, with Chinese conglomerate Dalian Wanda, whose chairman said it was taking advantage of the reticence of western companies as China accelerates its attempts to become a footballing superpower. “Two or three years ago, Chinese and Asian companies probably wouldn’t even have had a chance to sponsor Fifa even if we wanted to. But because some western companies dropped out, we got the opportunity,” said CEO Wang Jianlin at a news conference in Beijing to announce the deal, adding that more Chinese companies are likely to become Fifa sponsors before the end of the year.
However, Ruggie says that as a result of the publication of his report and Fifa’s reaction to it, football has now moved ahead of other sports. “Fifa was seen as a laggard but I don’t know any other sport that has amended its constitution to include respect for all internationally recognised rights, and I have not seen any other major global sports organisation that has human rights criteria in its bidding process,” says Ruggie. “Pressure on other sports to follow Fifa’s example is likely to increase.”
Ruggie says that, provided Fifa builds on its existing commitments, its example will be a game-changer for other organisations. “The International Olympic Committee, for example, cannot live in a bubble,” he says. “My hunch is that once they get through the Rio Olympics, there will be some deep reflection and discussion of the fact that the IOC cannot remain a laggard now that Fifa has roared forward.”
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