FIFA’s Brand Blunder Begets Revenue Black Hole

FIFA’s 2015 brand crisis – which saw several officials arrested on corruption charges – continues to cast a pall over potential future sponsors. 

Several sponsors, including Sony, Emirates and Castrol, have reportedly not renewed their contracts for the 2018 World Cup in Russia. Less than a year before that tournament, only 12 of the 34 available sponsorship slots have been filled, and no local host broadcaster has been found.

By this time in the lead-up to the 2014 World Cup in Brazil, most sponsorship slots had been filled – most, years earlier.

Some new names have however signed up with the beleaguered organisers.  They include Moscow’s Alfa-Bank, and Chinese smartphone maker, Vivo.  The latter is the third Chinese sponsor to sign up, which many have interpreted as portending a bid by that nation to become a future World Cup host.

FIFA’s brand woes are showing up in the balance sheet, too.  The organisation lost $369M in 2016, and is forecasting a loss of $489M this year… dispute digging into its traditional Reserves nest egg of $1B.

While this year’s loss is at partly due to higher development funds for member football associations and increased legal bills, the yawning chasm of sponsorship for Russia 2018 is a potentially much bigger revenue black hole.  

 

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