Fishburn Hedges

31.05.2011

“Sports promotions and sponsorship have long been a mainstay of corporate branding. But, as endless stories around corruption, debt, and commercial exploitation continue to spill over into the main news and business pages, businesses should pause for thought before jumping on the gravy train. Even if you can’t afford to sponsor a Formula 1 team, beware the partners you choose – because, like BP and Halliburton, a mistake by one side could seriously blight the other’s reputation for a long time to come.”

This was one of 10 reputational tips we offered to Management Today, for corporates to think about in 2011.  We also predicted on this blog that governments and sporting bodies would take a more interventionist approach with stringent new policies and regulation.  Corporates who were previously quick to jump on the gravy train, we believed, would take a much more cautious approach to sports promotions and sponsorships.

This morning, Coca-Cola and Adidas, FIFA's two biggest sponsors, have quite rightly expressed concern with football's governing body, in a sensible attempt to disassociate themselves with the scandals, and on the surface it would seem, wield some influence in the direction that this fast-sinking body now takes.

If anyone's in any doubt about how brands can be damaged when associated with a tarnished sporting body, witness just how quickly these sponsors moved to issue statements.  How soon will it be before they take a leaf out of Accenture's book, who famously dropped Tiger Woods for his misdemeanours? 

Okay, it's actually a bit more complicated than that.  The media has chipped away at FIFA for some time, with seemingly little impact until last week, but we should have known that one of the biggest threats to FIFA has always come from within.

What's fascinating though is that those who might have the biggest say in the governance of football are these corporate sponsors, who seem to hold more cards than that of the 208 football associations around the world. 

However, there's a massive difference between expressing concern and pulling sponsorship completely.  Coca-Cola and Adidas have significant portions of their budgets tied up in FIFA sponsorships and as relationships go, this one will be one of the hardest to leave.

This is compounded by questions asked by our peers in the industry which ask just how much value sponsors can gain these days, when rival brands can cash in just as much with less spend, and no official partnership – take Nike at the last World Cup for instance.

Marketing chiefs the world over will be watching to see if they try to make the relationship work once, or if, the dust has settled. 

What was once a must-have ingredient in many marketing strategy is now much more of a risk.