FIFA finds money and friends in China

LONDON — China’s football boom couldn’t have come at a better time for FIFA. After vocal criticism from top American and European sponsors, FIFA has found new friends — and financial support — in China.

Prominent business leaders, eager to participate in President Xi Jinping’s national campaign to make China a soccer power, have embraced the sport’s governing body, undeterred by the crisis that just last week brought new revelations of corruption and self-dealing.

Since the first wave of soccer-related arrests more than a year ago, FIFA has added only two top-tier sponsors, both Chinese companies.

A unit of Alibaba Group became the title sponsor of the Club World Cup in December 2015. Three months later, Dalian Wanda Group became a FIFA sponsor at the highest level, paying US$150 million (S$203.6 million) per four-year World Cup cycle to put its name alongside Coca-Cola and Adidas.

FIFA still wants to add another pair of nine-figure partners, and FIFA’s marketing director Thierry Weil said those could also go to Asian companies, possibly by the end of the summer. Four World Cup sponsorships, which cost less, are also available.

Mr Weil’s department couldn’t do much after indictments and investigations against several top FIFA leaders created a near meltdown at the organisation. Meanwhile, the campaign to replace ousted president Sepp Blatter unfolded with the histrionics of a telenovela.

“This was quite a strange year for us,” Mr Weil said. “It would have been hard for any company to continue. So we put certain discussions on ice, and stopped other discussions.”

Meanwhile, FIFA’s western sponsors, led by Coke and Adidas, made loud, public demands for changes to global soccer’s leadership and its governance processes.

Corporate partners published open letters to the organisation last December and shortly after appeared in British Parliament, where they were questioned about their own complicity in FIFA’s mess.

“The sponsors have definitely not been happy,” Mr Weil said. “They put a lot of pressure on us, and in that way helped to achieve what FIFA has achieved.”

Shortly after Mr Gianni Infantino was elected FIFA president at the end of February, he travelled to the US to assuage the partners. Still, there has been little talk of adding a new American or European company as a sponsor.

“It’s more of a challenge for businesses based in the traditional Western markets, where media scrutiny and public expectation and values are very different from other places,” said Mr Nathan Homer, head of global sponsorship at Barclays.

Those “other places” include China. Following President Xi’s direction, there has been a rush of spending on the sport domestically and abroad.

For example, in the last year Chinese retail company Suning Holdings Group bought the Chinese media rights for La Liga games, paid a record €50 million (S$77 million) transfer fee to bring star Brazilian midfielder Alex Teixeira to Jiangsu Suning Football Club.

On Monday, Suning announced that it is buying 70 per cent of Italian club Inter Milan.

Wanda, which owns a stake in Champions League runner-up Atletico Madrid, also bought Swiss sports marketing agency run by Mr Blatter’s nephew in February last year.

The company, Infront, brokered Wanda’s FIFA recent sponsorship, only to have the deal put on hold for months while the organisation retrenched. In March, FIFA and Wanda used a low-key press conference at the footballing body’s glass and steel Zurich headquarters to announce the sponsorship.

No one from Wanda participated, even though founder Wang Jianlin was on-site.

Mr Weil said the sponsorship was critical as much for its symbolic value as for its revenue.

“It’s an important deal, the first company willing to come out and say I’m now partnering with FIFA after the crisis,” he said. BLOOMBERG