FIFA sponsors are the only ones who can splatter Blatter

November 20, 2011

Well, what a week of wasted moral outrage that was, even if it did produce one of The Sun’s finest headlines for a very long time.

Make no mistake. “Splatter Blatter” may have sold extra copies of the red-top, but will do nothing to remove the Teflon Man, whose life’s achievement has been to carve himself an impregnable position as world football’s supremo.

In a way, you’ve got to admire him. Like Bernie Ecclestone, whom he resembles in a variety of ways, Blatter is a master tactician at the top of his own, very particular, game: not the administration of Formula One or FIFA, but the administration of power.

The secret of their supremacy is the same. It lies not (or very little) in formal status, but in a second-to-none understanding of how to manipulate an opaque global system that has no loyalty beyond its self-perpetuation.

To be sure, FIFA and F1 are, or have, venerable governing bodies guided by what appear to be democratically elected representatives acting in accordance with a constitution. In reality, the election of these officials is manipulated to suit insiders; and the workings of the institutions they represent are so complex and well-defended that they defy almost any outside attempt to hold them to account.

If there is any parallel to representative government, it is the quaint Rotten Borough system that existed in Britain before 1832. Boiled down to essentials, it involved the King and his chosen First Minister fixing a parliamentary majority by procuring the election of their chosen placemen in all the seats that actually mattered. For placemen read “men in blazers”, and you get the picture.

Corruption was the indispensable lubricant of this system. It involved greasing people’s palms, and not just at election time. The disbursement and retraction of patronage – primarily offices of state awarded on the basis of interest rather than merit – was key to successful management.

Recognise the parallel? Allegations of corruption have plagued Blatter’s 4 consecutive terms of office, culminating in the 2018 World Cup scandal that broke earlier this year. As for F1 scandals, need I enumerate them?

But what do Blatter or Ecclestone care about that? The same opacity which protects these organisations from outside investigation also insulates their ringmasters from public criticism – and any punitive measure that might result from it. Hence the stream of crass remarks that regularly issues from their mouths. For Bernie, Hitler was an OK bloke who built excellent roads even if he did later succumb to a power complex. For Blatter, racism on the pitch is a non-issue which can be settled with a handshake at the end of the match. Out of touch, clearly. But then, so what? They’re also out of reach, and they know it.

Blatter has deftly deflected calls for his departure from the likes of David Cameron, David Beckham and The Sun by portraying the outcry as a case of sour grapes. Only Britain has worked itself up into a national lather over racism on the pitch. Why? Because England lost out in the contest to become 2018 World Cup host, and is now conducting a vendetta against the man perceived to be its nemesis.

So, can he now blow the final whistle and move on? Not quite. If there’s one chink in Blatter’s armour, it’s money – or rather its threatened withdrawal. What if the sponsors – household brand names, with household reputations to maintain – deem he has gone too far and pull the plug on the hundreds of millions of pounds a year that FIFA depends upon for its survival?

Ordinarily, that simply wouldn’t happen. However much they may privately tut-tut about Bernie’s ex-wife spending £12m on their daughter’s nuptials, Max Mosley’s grubby sexual antics or Blatter’s moral insensitivity, the last thing they are going to do is scupper a strategic investment with a noble gesture. Their investment is, after all, in the global game, not the administating organisation and the people who lead it. And their justification for inaction the not unreasonable conjecture that most football and motor-racing aficionados have little knowledge and less interest in the shenanigans of sports administrators.

One sponsor’s uncharacteristic response to Blatter’s racism episode is what, in fact, makes this furore so interesting. True, most of FIFA’s six official partners have played entirely true to form. Coca-Cola has categorically rejected a review of its sponsorship; while Visa, Hyundai/Kia, Sony and Adidas have contented themselves with more or less bland statements condemning racism in sport. But Emirates has broken ranks by taking the almost unprecedented step of reviewing its sponsorship.

Whatever next? Not Blatter’s resignation, for sure. But perhaps the beginning of the end of his reign.

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FIFA’s Sepp Blatter and Max Mosley are two of a kind

June 1, 2011

Will the sky fall in on Sepp Blatter, much reviled president of FIFA, just because Coca-Cola and Adidas, Visa and Emirates Airline – 4 of football’s 6 biggest sponsors – have fired a shot across his bows?

Will the English and Scottish football associations’ vociferous appeals for a postponement to FIFA’s presidential election – which currently leaves Blatter dribbling up to an open goal – make an iota of difference?

No and no. The contest between FIFA and its critics is asymmetrical precisely because, unlike Coca-Cola and its fellow sponsors, FIFA is not a brand. It is not vulnerable, in the first degree, to public criticism – however merited or angry that criticism may be.

Indeed, as Matthew Patten recently pointed out, FIFA resembles nothing so much as a medieval guild. It owes allegiance to no one other than the 208 merchant adventurers who make up its membership. Nothing, culturally speaking, could be more removed from the modern corporation. There is no transparency in its business dealings, because the daylight of accountability is not an element in its constitution. The anonymous men in blazers ply their trade in a way that is endemic to all closed mercantile organisations: through mutual back-slapping, nepotism and, let’s face it, financially lubricated manila envelopes – if they think can get away with it. And lording it over them are the merchant prince oligarchs: men (they are always men) like Sepp Blatter and Mohamed Bin Hamman.

FIFA is part of a pattern which, if not peculiar to the administration of world sport, is certainly highly characteristic of it. Remember the cleansing of the Augean Stables at the International Olympic Committee (IOC), after the corruption scandal that was the Salt Lake City Winter Olympics bid came to light in 1998? That was a relatively benign outcome. Less satisfactory have been the consequences of the more recent shenanigans at Formula One. Despite the engulfing stench of scandal, and the twittering of vocal criticism, its twin ringmasters Max Mosley and Bernie Ecclestone managed to protect the integrity of their power base. Admittedly Mosley eventually went, but it was at a time of his own choosing and on his own terms. Ecclestone, meanwhile, continues to crack the whip without let or hindrance. He is currently said to be negotiating an exit deal with Rupert Murdoch.

Blatter, a man who once fronted an organisation dedicated to stopping women exchanging their suspender belts for pantyhoses, is more likely to draw his inspiration from Mosley than the aftermath of the Salt Lake City scandal. He will brazen the “crisis” out.

And there is little, in the last analysis, the sponsors can or will do about it. On the surface, that might seem a strange thing to say. After all, they are bankers to the organisation and provide its marketing pot. Each contributes between £100m and £300m to a FIFA revenue estimated at £2.4bn in the 4 years up to and including World Cup 2010. Surely that gives them more clout than most stakeholders in the struggle to wring reform from the World Cup organiser? Only up to a point. Let’s not forget that FIFA is less dependent upon sponsors these days to the extent that it can dip into billions of dollars worth of syndicated worldwide TV rights. Moreover, rather than presenting themselves as a united front, the sponsors perceive themselves as embattled and vulnerable competitors (rather like the constructors in the F1 equation). Blatter, like Ecclestone, is a supreme tactician in exploiting such weaknesses. There’s always someone else, he will say, to take their place if they don’t want to play ball. A Pepsi for a Coke, a Nike for an Adidas, a Delta for an Emirates, a Mastercard for a Visa.

And do you know what? He’s right. The only chance the sponsors have of effecting change is if they stand united. My suggestion is not that they threaten to defect, merely that they withhold some of their funding until tangible reforms, prime among them greater transparency and accountability, are in place.


Sir Shred’s threadbare win in the courts

March 13, 2011

On what spurious legal grounds has Sir Fred Goodwin persuaded some mentally bewildered British judge that he may no longer be referred to as a banker? We may not know, we may not even discuss: such is the all-encompassing gagging power of the superinjunction.

Some say that The News of the World was about to blow the gaffe on his private life. If so, I am greatly surprised that the former financial shredder has a private life worth dissecting, given his celebrated 24/7 dedication to work. I can only imagine that mere sight of the word “banker” attached to his name in the newspapers is enough to provoke a trauma so profound and inconsolable among other members of his family that it may be deemed an invasion of their privacy.

However, I digress. Little remarked so far is Sir Fred’s stupendous contribution to legal history. He is the first non-celebrity (excluding Trafigura, a corporate entity – albeit one of surprising sentience) to be granted such an injunction, which opens the floodgates to all sorts of hitherto unexplored avenues of advantage – some conceivably relevant to the marketing community.

Typically, a superinjunction comes about when a celeb of apparently unimpeachable public deportment (such as Tiger Woods) finds his or her reputation is about to be besmirched by irresponsible journalistic muckracking. The potentially ruinous effect of publication upon sponsorship earnings, combined with the anticipated hurt felt by the celeb’s family on reading the exposé, is often enough to persuade tender-minded judges – Mr Justice Eady prime among them – that the celeb’s inalienable Human Right to privacy is indeed being infringed.

Thanks to Sir Fred, the superinjunction contagion may now spread to all sorts of other commercial activity. Max Mosley could perhaps insist that the word “debauchery” be expunged from any description of his private activities over the past few years, for fear of damaging the reputation of Formula One. Likewise, F1 ringmaster Bernie Ecclestone might exercise a veto over the word “Hitler”.

But these are mere legal foothills, considering the potential for indemnifying careers against all-time marketing disasters.

Imagine how useful a bit of UK juridical tourism might have been to the Ford family if the superinjunction had existed back in 1958, as the Edsel disaster began to shape up.

Robert Goizueta, former chief executive officer of Coca-Cola, could have discovered in the superinjunction a helpful antidote to being hurtfully described as “the author of New Coke.”

And Niall Fitzgerald might have been counting his superinjunction blessings in 1995, when he presided over the introduction of Persil Power. Instead of which, he had to engage in a long and painful public relations battle to rescue his company’s reputation (and his own).

Absurd extrapolation? Well, no more than not being able to call the architect of the RBS/ABN Amro deal a banker.

PS. Are we still allowed to refer to Fred as “Sir”? I understand he was knighted in 2004 for “services to banking”.


Far from heavenly, the F1 marketing role sounds like the brief from hell

September 7, 2010

I was intrigued to hear that the search is on for a Formula One marketing director. Given F1’s global reach, and the colossal sums of money from sponsorship, TV rights and attendance fees supporting the brand, it sounds the CMO job from heaven. Why ever had no one thought of creating it before? For very good reason, as it happens.

First things first, however. The proposal has come out of the inaugural meeting of something called the F100 alliance, which is a new organisation designed to represent the commercial sponsors of the sport. F1 is composed of so many self-interested “guilds” that it’s a surprise the sponsors haven’t cottoned on to this idea earlier. There is, for example, one for determining the governing rules (FIA); another for the Grand Prix manufacturers; yet another for the drivers; one for the mechanics; and even one called the Overtaking Working Group. By contrast, the 175 sponsors who contributed £458m in 2010 (according to industry monitor Formula Money) – more than the £352m provided by the team owners and the £156m by the car manufacturers – have until now been unprovided for.

The immediate back-drop to the creation of the F100 alliance is the recession, and a change in the relative importance of the contributing revenue streams – which has sharpened the sponsors’ appetite for power. The idea, not unreasonably, is to make their money work harder for them by creating a ginger group. The kind of thing which they might wish to influence would be the timing of grand prix, their geographical location and the multiplication of opportunities to entertain – all of course in the cause of maximising sponsorship return. Finding a marketing director to front and shape their interests, where commonality can be found, is a natural extension of this platform.

But who would be the ideal candidate, and how much power would he or she actually have? Although discussions – about the brief, let alone the candidate – are at any early stage, the name of David Wheldon has already emerged from the pack. I have no idea whether Wheldon really is interested, but he certainly has persuasive credentials as the former global brand chief of a major F1 sponsor, Vodafone. And there’s something else he has that any F1 marketing director will need by the bucket load: emollient charm and a considerable reserve of patience.

F100 and its marketing director will be able to beg, but they won’t be able to bully. The Mediaeval jumble of competing guilds that makes up F1 disguises an important reality about its underlying constitution. It is an autocracy where only one man’s opinion – certainly on the matter of grand prix venues – actually counts. That of ringmaster Bernie Ecclestone. Ecclestone has very graciously condescended to read the minutes of F100’s inaugural meeting, rather in the way that a monarch might glance at his subjects’ charters. He is committed to doing precisely nothing. Indeed, not very privately, he has described the whole idea of F100 as “silly.”


Guess who’s not coming to dinner, Bernie

September 29, 2009
'Minor player'

'Minor player'

Was Formula One always this exciting off-track? Just as you thought it couldn’t get any more engrossing, along comes teflon-coated commercial F1 ringmaster Bernie Ecclestone with another clanger that defies all expectations.

This time, the diminutive hair-extended one has picked on a victim his own size, with unpredictable results for the future. The target being none other than Sir Martin Sorrell, head of the world’s largest marketing services group, who happens in his spare time to act as a director of CVC, the F1 operating company ‘run’ by Bernie.

Sorrell, a prominent Jewish businessman, has been watching with increasing dismay Bernie’s antics, which rival in amusement those of Iranian president Mahmoud Ahmadinejad. Ahmadinejad, you may recall, reckons the Holocaust never happened, so it’s OK to nuke Israel. Bernie reckons Hitler is misunderstood. After all, he had a way of “getting things done” (we’re not entirely sure whether this revisionist theory applies to the Final Solution).

Matters reached boiling point when Bernie opined that his disgraced poker-playing chum, Flavio Briatore, had been excessively punished for staging a little car-crash in last year’s Singapore Grand Prix. “Out of touch with reality” was Sorrell’s exasperated rebuke.

Bernie then gave Sorrell a comprehensive public character reference, the gist of which was that he was a minor player in F1, didn’t really know what he was talking about, and was not very bright anyway. Oh, and because he’s a Jew, he could never forgive Ecclestone for his unconventional views on Hitler.

The corker is that this diatribe was unleashed just days before Sorrell, according to Bernie, had invited him round to dinner to sort things out.

Except that he hadn’t. Apparently, it was Bernie who took the initiative a few weeks back, when he phoned up Sorrell to “bury the hatchet” and suggested dinner. More revisionist history on Bernie’s part, it seems. And certainly a funny way to bury the hatchet.

How much more of this can CVC’s real boss, Don Mackenzie, take?


Why did BMW really pull out of F1?

July 29, 2009
images-1

BMW: Odd timing

A wry thought crossed my mind after I heard that BMW was going to pull out of Formula One. Yes, all right, they’re bad losers. They’ve frittered squillions of pounds a year on a sport that has brought them no glory. Their shareholders are upset, their workforce is incandescent – especially those now facing redundancy as a result of the worldwide squeeze on the car industry. Toyota and Renault will surely follow suit, etc…

But the timing of the announcement seems a little odd. After all, wasn’t BMW one of the leading lights in the prospective Fota championship breakaway? And wasn’t that, ironically, all about stymying FIA president Max Mosley’s plan to impose sensible, manageable budgets on the racing teams?

Now for the thought. Perhaps the increasingly “inappropriate” behaviour of F1 ringmasters Mosley and Bernie Ecclestone played a role, ever so small, in the framing of BMW’s decision?


Ecclestone’s last stand

July 13, 2009

Bernie Ecclestone’s uncritical outburst of fuhrer-worship will bring down his own autocratic regime at F1, no doubt about it. The question is when.

Ecclestone, whatever his awesome reputation, is only a minority shareholder in Delta Topco, the company which ultimately owns F1’s commercial rights. The majority shareholder is CVC Capital, with about 70%. Although Ecclestone was able to haul CVC chief executive Donald MacKenzie to the phone for a vigorous denial that he was about to get the heave-ho, all is not what it seems. CVC has had enough with the way FIA president Max Mosley and Ecclestone have been running things or, as they see it, running things into the ground. Mosley’s intransigence over reform of the rules recently led to a mutiny by eight of the racing teams – representing all the powerful motor manufacturers – and the threat of a breakaway championship under the Fota moniker. No one really wants a breakaway, including the teams. It would mean diminished income all round, especially in the key areas of TV rights and sponsorship. But CVC has more to fear than most: a breakaway would either destroy or severely impair its multi-billion pound investment in the sport. So it is keen to appease the teams, who now find themselves in a powerful bargaining position.

Sorrell: Not amused

Sorrell: Not amused

On the board of the Formula One holding company are two prominent Jewish businessmen, Peter Brabeck, former head of Nestlé, and Sir Martin Sorrell, ceo of WPP – both Delta Topco investors in their own right. It scarcely requires me to articulate their thoughts on Ecclestone and his continued tenure. The question is, who could replace him? No easy answer comes to mind. Not, for example, the flamboyant Flavio Briatore – head of the Renault team and close confederate of Bernie (both, among other things, have a major stake in football club QPR). The other teams simply wouldn’t wear it. Nevertheless, a replacement looks likely by the end of the year. It’s a gripping Mexican stand-off in which Ecclestone has yet to fire his last shot.

We might ask, while all this unseemly wrangling is going on, what of the sport, what of the brand, what of the sponsors? More in my magazine column this week.


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