$100 Billion Brand Value Loss for FIFA Sponsors - Global Trade Magazine
  June 1st, 2015 | Written by

$100 Billion Brand Value Loss for FIFA Sponsors

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  • Sponsors of FIFA could lose up $100 billion as their global audience and international brand is tainted by association.
  • FIFA is down to $2.8 billion, having lost $400 million in the last few days alone.
  • Broadcast revenues could be under threat as possible relocation of World Cups in Russia and Qatar creates uncertainty.

VISA, McDonalds, Coca-Cola, Hyundai, Budweiser and Adidas are among the major companies that have set out to globally build their brands through association with international football, the World Cup and the now embattled organization that oversees it, FIFA.

For $24-44 million a year, the sponsors have guaranteed exposure to a global audience well in excess of a billion consumers and association with the world’s most loved sporting event. There has not doubt been a significantly positive effect on the brands over the years, as the values for the top sponsors currently total near $100 billion.

Accusations of endemic corruption within FIFA are becoming not just widespread but impossible to ignore. The sands are rapidly shifting, making any kind of association with FIFA increasingly risky for a brand’s reputation. Negative headlines now surround not just FIFA itself but the sponsors too.

FIFA’s own brand is in the most imminent danger of all, being heavily contingent upon the support of its partners and sponsors. It is down to $2.8 billion, losing $400 million in the last few days alone as the result of the arrests and subsequent negative attention. Broadcast revenues may also be under threat as the possibility of relocation of World Cups in Russia and Qatar creates significant uncertainty.  A boycott of FIFA by national football authorities has even been mentioned, which would lead to the collapse of FIFA’s $12 billion franchise.

Brand Finance CEO David Haigh comments, “Sponsors have partnered with FIFA in order to build their brands, not have their reputations tarnished. The kind of activities that are alleged to have been going on could destroy billions of dollars of brand value. A lot depends on what happens in the next few days but without knowing how quickly FIFA are going to clean out the Augean stables, my recommendation to the major sponsors would be to move towards the exit.”