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The real reason world soccer is cleaning up its act

The worst thing that could have happened to Sepp Blatter, the autocratic chief of world soccer, has been the sport's rapid growth in the lucrative U.S. market.

That powerful lure has prompted major marketers and media companies to commit record sums to sponsorships and broadcast rights for soccer's signature global tournament, the quadrennial World Cup, which kicks off Thursday in Brazil.

And with so much at stake, they can ill afford even a hint of scandal that might undercut their marketing strategies, hurt their brand image and quite possibly hit their stock price.

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That's why seven sponsors, including five of the six biggest – Adidas, Visa, Coca-Cola, Sony and Hyundai – have left their usual seats on the sidelines. The disgruntled seven have issued obviously co-ordinated and unusually blunt public demands that the Fédération Internationale de Football Association (FIFA), Mr. Blatter's long-time fiefdom, pursue an aggressive probe into serious allegations that Qatar won the rights to the 2022 World Cup through bribery.

This year's 32-day event is expected to rake in a record $4-billion (U.S.) in revenue – two-thirds higher than the 2010 Cup in South Africa – with nearly $1.4-billion coming from sponsors and $1.7-billion from the sale of broadcast rights.

To grab U.S. English-language rights for the next two World Cups, Fox is forking out more than four times the $100-million paid by ESPN for the 2014 and 2010 events. In 1998, the cost to ESPN was only $22-million; and critics thought that was a bit steep for a sport that lacked broad national appeal.

True to form, the combative Mr. Blatter has come out swinging against his critics. He told African and Asian delegates that the latest attacks were the product of "discrimination" and "racism" fomented by a British media still angry about Britain losing out to Russia for the 2018 Cup. Both the Russian and Qatari decisions are the subject of an internal probe, but the results won't be revealed for several months after the current Cup is in the history books.

Other international sports bodies have come under pressure in recent years from big-spending sponsors to clean up their act if they want to keep the dollars flowing in, including the International Olympic Committee, the International Cycling Union and the FIA, which oversees Formula 1 auto racing.

Mr. Blatter and his organization have faced a firestorm of criticism over the years, mainly from European members, who have have ramped up their attacks in the light of published allegations that millions of dollars in bribes changed hands to give the World Cup to Qatar, a tiny country with sizzling summer temperatures and little soccer history or fan base.

"The image of FIFA has been tarnished by everything that has happened over the last years," said Michael van Praag, president of the Dutch Football Association. "I told him: 'I like you very much … this is nothing personal. But you are now saying that Qatar was the wrong choice, but you are not blaming yourself; you are blaming your executive committee."

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Mr. Blatter, 78, has faced down previous scandals and assaults on his integrity during his controversial 16 years at the helm. But he has never before had to deal with such a serious rebuke from FIFA's biggest financial backers.

He must do more than pay lip service to the concerns of the sport's key sponsors and rights holders. That will require him to take full responsibility for years of shoddy governance practices and declare his support for genuine reform and greater transparency. Then he must abandon his plans to seek a fifth term in power and hand the controls to someone who will practise what he preaches.

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About the Author
Senior Economics Writer and Global Markets Columnist

Brian Milner is a senior economics writer and global markets columnist. In a long career at The Globe and Mail, he has covered diverse business beats, including international trade, the automotive industry, media, debt markets, banking and the business side of sports. More


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