Any initial elation at Sepp Blatter’s resignation as the overlord of FIFA will be tempered by his declared intention to stay on until at least December and possibly March 2016, to enable his successor to be elected. Has FIFA got no existing succession plan that could kick in before this? Lets assume that Blatter, 79, had been hit by a bus rather than by an FBI probe. Would there be no-one else at all who could take over the job for the next six to nine months? One fears for the evidence that could be destroyed while Blatter remains on the premises, still running the show.
As to what ‘reform” of FIFA would look like… Nominally, FIFA is a charitable organisation that collects the proceeds of running football and then distributes them to its member bodies, for the betterment of the game. The first step in meaningful reform would have to involve separating the business side of the enterprise – the revenue collection – from the charitable task of revenue re-distribution. That would enable some transparency into both arms of FIFA’s activities, and thereby reduce the opportunities for skimming off the proceeds. There’s an explanation of that suggested model here:
An alternative approach would be to create greater separation between the commercial organisation of the World Cup, which is a business, from the charitable activities of Fifa. Fifa could simply create a corporation – World Cup Incorporated – and float it on the London or New York stock exchange. As a corporate entity it could be charged with selling the rights and organising the event, subject to the rules and regulations established by Fifa. In return the business could keep a (smallish) share of the profit, with the remainder to be returned to Fifa for distribution to its members, on a strictly itemised basis. The advantage of separating the business from the charity is that it would remove the incentive to give kickbacks – the Fifa executive would no longer be ultimately responsible for allocating the contracts, and so the main source of corruption would be removed.
This would reduce the opportunities for corruption but not eliminate them. Problem being, few of FIFA’s operations are conducted within a truly competitive market. FIFA is the sole supplier of the World Cup and its member bodies negotiate the terms for many other lucrative rights and licences to football-related commodities, from broadcasting rights to various kinds of merchandise. As a monopoly supplier – able to grant in turn, monopoly rights to the highest bidder – it can set the fees and inducements involved virtually at will. And when does charging whatever the highest bidder is prepared to offer become extortionate rather thasn business as usual? And when do the blandishments and inducements for services rendered cross the line from acceptable fees into kickbacks and corruption? These can be grey areas.
Certainly, the structure of the deal signed in 1996 by a multinational sporting firm – believed to be Nike – to obtain exclusive branding rights for the clothing/footwear worn by Brazil’s national football team shows how you shouldn’t conduct such business. Nike paid $160 million to the Brazilian football federation for exclusive branding rights for its products with the Brazil team, the FBI probe reveals, in a deal that was brokered by a local Brazilian entrepreneur and a FIFA/Brazil football federation official.
Nike then paid a further $40 million in ‘marketing fees’ into an anonymous Swiss bank account. This money was allegedly divvied up later in kickbacks between those who facilitated the deal. You can call that corruption – or was it simply payment for services rendered via local expertise? Again, while this structure looks corrupt – in that personal (and non-taxed gain) has accrued – would a more sophisticated form of ‘marketing fees’ or “commission fees ” charged upfront pass muster with the FBI in future? Probably. Meaning : the ‘reform’ of FIFA is something that’s easy to advocate. In reality though, many of the same business practices – or something very similar – would seem likely to persist, regardless.
In Latin America, Nike could even be able to play the victim card – or at least it is being advised to temper how it distances itself in the South American market from the accusations that North Americans are levelling against it:
“Nike has got to be incredibly sensitive to how this is going to appear in other countries because the love of football in Europe, in South America dictates that there are going to be some people who believe that the Americans are creating an attack on the beautiful game,” he said. “Nike’s got to tread gently here because on the one hand they have to be appalled by corruption but on the other hand they need to recognise that different cultures are going to view all of these proceedings differently.”
Interestingly, any reputational fallout for Nike from this episode (in Latin American markets at least) will depend on how the FIFA prosecutions play out politically. Russia’s President Vladimir Putin has already depicted the FBI and Swiss investigations of FIFA as being a politically-driven matter of The West vs The Rest, aimed at the allocation of the upcoming World Cups to Russia and to Qatar.
In the end, the big multinational sponsors walked away from Blatter and regarded his ouster as being essential to their continued involvement with the game of football. A letter from one of Blatter’s closest associates – to do with the awarding of the 2010 World Cup to South Aferica – also seems to have brought the corruption probe uncomfortably close to Blatter’s own door.
Fifa has claimed that secretary general Jerome Valcke was not involved in the $10m payment that is at the centre of a corruption investigation, but a letter addressed to the Frenchman revealed this morning appears to suggest otherwise.
The letter, sent by the South African Football Association president Molefi Oliphant ahead of the 2010 Fifa World Cup, directly references the $10m payment to a bank account “implemented directly by the President of the Concacaf”, who at the time was disgraced former Fifa vice-president Jack Warner. In the letter, Oliphant asks for the payment to be withheld from World Cup funds and paid instead to Warner to help support football in the Carribbean, where Warner was at the time in charge.
Yet so long as Blatter remains in charge at FIFA HQ, one wonders what relevant correspondence may be heading right now for the paper shredder.
And the FIFA film….
And what fate awaits United Passions, the lavishly budgeted vanity film project that FIFA funded for its own glorification last year? This slice of cinematic creative non-fiction charts FIFA’s own heroic history and features Gerard Depardieu as FIFA’s first leader Jules Rimet. Our very own Sam Neill appears as Joao Havelange, Blatter’s long serving and equally controversial predecessor who was finally booted out of his honorary role with FIFA in 2013 after a corruption probe involving a $100 million bribe.
Finally, Tim Roth stars as the dashing Sepp Blatter himself. Hard to say which is funnier : Sam Neill pounding the table and shouting about the state of the FIFA accounts, or young Sepp Blatter (who is said to be very good at finding money) being called in to save the ship…