FIFA’s Opposing Interests: money for them or for South Africa?


A recent article in the UK based paper, The Independent, highlighted a topic that I’ve written about on this blog: FIFA, their vigilant stance against ambush marketing, and the resultant loss of economic opportunity for small-scale entrepreneurs to benefit from the upcoming World Cup.  Now I understand FIFA’s reasons for defending the well-paid for rights of their major corporate sponsors.  And they didn’t hide the fact that they wouldn’t tolerate ambush marketing.  But their vigor in this area may now be biting themselves in the behind.  I don’t think anyone would argue against their right to prevent Nike or Puma’s presence in the stadiums or fan parks due to Adidas’ role as an official sponsor.  But when you compare that against preventing street vendors from selling key chains or lollipops (lollipops!) with the word ‘2010’ or the image of the South African flag, it raises some eyebrows.   According to the article it states that FIFA “has opened 451 cases of ambush marketing, aiming to protect its official partners who have spent fortunes to win exclusive rights to the brand.”

But Pierre de Vos, a constitutional lawyer, fears that if these actions persists, average South Africans will see only limited benefits from the World Cup.  He continues to state:

Many of the rules are here to protect financial interests of FIFA. It has nothing to do with the successful hosting of the World Cup…If the economic benefits are not as high as people had hoped, people will become more disillusioned with FIFA

And disillusionment with FIFA should be the least of the organizing committee’s worries; FIFA officials get to return to Switzerland and enjoy the benefit of only hosting this event every four years.  But the organizing committee members will be the ones expected to answer questions if pre-games promises are not fulfilled.

This article in the Independent is discouraging but not surprising.  I know it’s much easier to report on the negative than to report on the good that’s happening (hoping that there actually is a lot more positive to be reported on!).  So I’m hoping that articles highlighting the negative impacts don’t outweigh those showcasing the positive things happening in the country around the games.

But this article is also discouraging in light of another recent article (May 3) in the Financial Times that reported that FIFA would be generating a net gain of $1 billion in income, although they said it was wrong to talk about the surplus as a profit.

Jerome Valcke, FIFA executive, described the surplus as “a reserve to insulate the organisation from any unforeseen financial problems.”  He continued, saying:

We are not rich, we are making quite good money and thanks to the World Cup, because . . . that’s the only income we have…We should not talk about profit.

When you balance this report of them not being “rich” on one hand and then see them raising lawsuits against those small-scale entrepreneurs who are simply trying to make money for their families, one can’t help but see a major disconnect between FIFA and those of the country hosting the event.  FIFA is working hard to protect the brand of their generous sponsors, but they are at serious risk of damaging their own.

Up to this point, FIFA has talked a good game about leveraging the games in order to uplift the country, it’s people, and the region.  Hopefully they don’t squash any built-up good will by continuing to play the Goliath, to the entrepreneurs’, David.

To read the full May 3, Financial Times article click here: http://www.ft.com/cms/s/0/2e62f2be-56c2-11df-aa89-00144feab49a.html?ftcamp=rss

To read the full May 11, The Independent article click here: http://www.independent.co.uk/sport/football/internationals/fifa-marketing-rules-spark-frustration-in-safrica-1971006.html

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One Response

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