Lessons from the FIFA Scandal: Risk Exposure and Future Protections
The global appetite for football has seen sponsors battling to be associated with the game, and consequently with Federation International de Football Association (FIFA). The deals with FIFA are usually lucrative and a profitable. However, with the scandals, a sponsor associating itself with FIFA is at a high risk of losing its reputation in the global market. FIFA’s recent corruption and bribery scandal has elicited debate on issues dealing with brand protection. FIFA sponsors such as Coca-Cola, Adidas, Visa Inc., Mc Donald’s Corporation, Emirates, Sony Corporation, Budweiser, Gazprom and Hyundai-Kia Motors are in a dilemma on whether to dissociate them with FIFA. People have…show more content… Due diligence is therefore an important tool in ensuring that a sponsor partners with the right organisation. Due diligence must start at the strategic level and should involve assessing whether the organisation is right for the sponsor’s brand. Find out as much about the organisations reputation, financial status, and legal status before signing the final sponsorship agreement. This will ensure that a sponsor has sufficient information about the organisation and that it has an appropriate exit strategy.
2.2. Anti-Corruption and Anti-Bribery Contract Provision
Anti-Corruption and Anti-Bribery clauses are increasingly being included in standard contracts. A Sponsor must be keen in ensuring that an ant-bribery or an anti-corruption clause is included in their sponsorship contract with the organisation to be sponsored. This ensures that the sponsored organisation does not engage in corruption or bribery. A sponsor must only sponsor an organisation if it is ready to adhere to this provision.
2.3. Morality…show more content… Limitation of Liability and Exemption Clauses
Sponsors should include a limitation of liability clause in the sponsorship agreements. The sponsor should be indemnified for breach of the contract arising out of professional acts, errors or omissions by the organisation’s management.
2.6. Strong Ethical Practice
Sponsors should push for the sponsored organisations to have stronger ethical standards and adopt good ethical policies. Sponsors may also form their own ethical committees to monitor and ensure that ethical practices are adhered to. .
2.7. Non-renewal of Contract
A sponsor may re-evaluate its association and sponsorship of an organisation based on its current performance. For instance activists are pushing for sponsors not to renew the sponsorship deals with FIFA. However sponsors have been keen to point out that they are not sponsoring FIFA but rather the game (football) and therefore they are not part of the rot in FIFA.
In this regard, brand protection should be of concern to sponsors when negotiating sponsorship deals with organisation. A sponsor must be forward looking on what will be the impact to its brand when a scandal hits an organisation directly or indirectly sponsored or associated with