In stunning news on Wednesday, the U.S. Department of Justice indicted 14 people, including current and former FIFA officials, in a decades-long corruption scheme. Swiss authorities are also conducting a separate probe into how World Cup rights were awarded to Russia for 2018 and Qatar for 2022.
Adidas became the first World Cup partner to speak out about the latest developments, saying in a statement it is "fully committed to creating a culture that promotes the highest standards of ethics and compliance" and that it can "only encourage FIFA to continue to establish and follow transparent compliance standards in everything they do."
Meanwhile, Visa issued the most strongly worded statement so far. Late Wednesday, it said "our disappointment and concern with FIFA in light of today's developments is profound," saying that if FIFA fails to make changes, "we have informed them that we will reassess our sponsorship." Coca-Cola said in a statement that the "lengthy controversy has tarnished the mission and ideals of the FIFA World Cup and we have repeatedly expressed our concerns about these serious allegations."
Others were somewhat more cautious. McDonalds, a World Cup sponsor, said the news was "extremely concerning," while Budweiser said it expects "all of our partners to maintain strong ethical standards and operate with transparency." Emails to other major sponsors, including Gazprom and Hyundai, were not immediately returned.
Such statements reflect the dilemma corporate brands find themselves in amid Wednesday's charges and raids, especially coming on top of human rights concerns out of Qatar.
Conditions for migrant workers, who are building the stadiums there, have drawn international scrutiny: Amnesty International recently issued a critical report, and the Nepalese government denounced FIFA and its partners for not putting more pressure on Qatar to improve workers' rights. Mock logos of FIFA's corporate sponsors have even made headlines, as amateur designers attempt to pressure the organization's sponsors over conditions in the Middle Eastern country.
That scrutiny, combined with the new corruption charges, creates a situation for corporate brands unlike anything in recent history, said Bettina Cornwell, a professor of marketing at the University of Oregon who studies corporate sponsorships. "This is off the scales in terms of its sweeping impact," she said. "It’s the largest sport in terms of world viewership, [the arrests were] a high drama operation and we have this seized information."
The unprecedented nature of these indictments means it won't be easy for sponsors to ignore them. "You can’t continue business as usual," Cornwell said. Yet, at the same time, "they will also want to continue their relationship with soccer."
After all, the massive scale and reach of the World Cup makes it a global branding opportunity with almost no equal. The 2010 World Cup's final match had an in-home audience reach of nearly 910 million, and an estimated 715 million people watched the finals in 2006 in Germany. This year's Super Bowl, by comparison, drew 114 million.
That golden media platform will make it exceedingly hard for brands to walk away, said Paul Argenti, a professor of communications at Dartmouth's Tuck School of Business. It puts companies "between a rock and a hard place in terms of what they're going to do," he said. "But I honestly think they have to start thinking about their own reputational risk as part of the process."
He sees sponsors likely responding in the coming days and weeks in one of three ways. One is to do nothing, a move he said would be dangerous for a brand's reputation at this point. Another is to add additional pessimism to earlier statements, showing even more concern than they previously communicated. The third would be to back out completely.
"If I were really trying to be the most responsible, I would cut my losses now," Argenti said. "This isn't going to get better."
Not only might it be a responsible move for the corporations, but it could collectively add pressure to FIFA to change. Cornwell, however, is skeptical that many sponsors will head for the exits. Given the lure of the World Cup's unparalleled audience, she said, brands are more likely to say they want to continue to support the sport — or even cast the charges as something that could eventually have a positive impact.
Sponsors might say "we're still there for the soccer and we're so glad that the organizing body for one of the major forces in soccer is being cleaned up," Cornwell explained.
Still, that argument will be harder for companies to credibly make as long as FIFA continues to have the same leadership in place. After all, FIFA President Joseph "Sepp" Blatter — who was not charged in Wednesday's indictment — has presided over the organization for a 17-year tenure that has included former allegations of corruption. And on Friday, Blatter is expected to be re-elected to his fifth term as its president.
Amrita Jayakumar contributed to this report. This report has been updated to reflect new statements by sponsors.