Soccer Scandal

Dissolve Yourself, FIFA!

Blatter distorted AP
No reason to cheer, at least not for world soccer.
  • Why it matters

    Why it matters

    FIFA has revenues in the billions and enjoys absolute power in the world of soccer, yet acts unchecked and is unregulated.

  • Facts

    Facts

    • On Wednesday, U.S. authorities announced an indictment against 14 soccer officials who allegedly accepted $150 million in bribes.
    • FIFA runs the World Cup, the most widely followed sporting event in the world. Germany is the current world champion.
    • FIFA president Sepp Blatter, who is among the world’s most powerful people in sports, wasn’t indicted, but suspicions of corruption have dogged him and FIFA for years.
  • Audio

    Audio

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FIFA made us all happy for a long time. The international soccer association turned the game into a source of joy for viewers — and to a source of money for its members. The thrill of the game, the excitement at World Cup competitions, the amazement at how entire countries changed when they hosted a FIFA tournament all overshadowed our doubts about how it was all organized. 

But that’s over now. A handful of FIFA bosses have been sitting since Wednesday in detention cells facing corruption-related charges. Joy in soccer has been replaced by disappointment at FIFA’s possibly criminal leadership ranks. The association is doing its sport a disservice. What needs to change?

A fish rots from the head down, as they say in Germany. It is the system set up by FIFA president Sepp Blatter that is imploding. He is the leader of an association that claims to be a charity but is nothing of the sort. It is a powerful, rich, international soccer company. Mr. Blatter likes to sign off his letters with the slogan: “For the game. For the world.”  It would be more appropriate to sign off: “For the game. For the money.”

As an association, FIFA doesn't have to pay burdensome taxes in its home country of Switzerland. As an association, it also once managed to organize a world soccer championship in Germany and not pay a single euro in taxes.

The Fédération Internationale de Football Association was set up in 1904 by a few soccer enthusiasts to organize championships on grass fields in a few European countries. Today, the association has become a global enterprise that brings in revenues in the billions through ticket sales, the awarding of television broadcasting rights and a gigantic merchandising industry involving all aspects of soccer. FIFA clings to the idea that it is an association of clubs, not a company in its own right. 

As an association, FIFA doesn’t have to pay burdensome taxes in its home country of Switzerland. As an association, it also once managed to organize a world soccer championship in Germany and not pay a single euro in taxes.

As an association, FIFA  has nothing that resembles a non-executive board. As an association, it can pay its members before they vote about such issues as where the next World Cup is to take place. The association doesn’t even violate the law in that way, but this means FIFA is an organization in which all power comes from above.

At the very top is Sepp Blatter. He can’t run for cover any longer.

Mr. Blatter can legitimately claim — just like another old man of the thoroughly commercialized sports world, Bernie Ecclestone — to have achieved a status for his sport that is unique throughout the globe. FIFA and Formula 1 are the lodestones of their sport. The tournaments they organize decide who the champions are.

But Mr. Blatter, just like Mr. Ecclestone, must be reminded that in their commercial behavior, they long ago forgot the rules of fair play that they demand for their sports.  Mr. Ecclestone was convicted and received a record penalty of €100 million, or $109.7 million. In Mr. Blatter’s case it is his closest associates who face charges.

But this cannot be the end of the clean-up process. No honest sports official can accept this state of affairs, whether he or she comes from the Union of European Football Associations (UEFA) or any of the other large regional associations included in FIFA. They have all accepted far too often the soothing assurances of Mr. Blatter who, with every new allegation of corruption, always insists on playing the role of head sleuth. If UEFA & Co. don’t act now, they will destroy FIFA’s last shred of credibility. Unfortunately, no signs of revolution was visible at the annual FIFA world assembly held last Friday in Zurich.

FIFA should dissolve itself. Declare the game over. It should be replaced with a publicly traded company that organizes international soccer. A company with a non-executive board and shareholders’ meetings. One that, by means of shareholders’ decisions, puts an upper limit on the age of its managers and offers its CEOs contracts of limited duration without automatic renewal. One that names soccer organization as its commercial purpose and has the goal of earning money. One in which the rules of good entrepreneurial management allow the submission of lawsuits. One day we may even be able to buy shares, as well as tickets for matches. 

To contact the author: stock@handelsblatt.com.

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