Fifa in Crisis: Tarnished footballing body could hit sponsoring brands for billions

Top brands that sponsor Fifa risk losing billions of dollars if they continue their association with the corruption scandal-hit world footballing body, a brand valuation expert claims.

Visa, McDonalds, Coca-Cola, Hyundai, Budweiser and Adidas are among the major companies that have set out to build their brands through association with international football, the World Cup and Fifa.

For a fee now in the region of $24m-$44m (£16m-£29m) a year, the sponsors have guaranteed exposure to a global audience well in excess of a billion consumers.

Brand Finance says that there "has no doubt been a significantly positive effect on their brands over the years. Brand values for the top sponsors currently total nearly $100bn ([Coca-Cola: $35.8bn, McDonalds: $22bn, Hyundai motors: $8.6bn, Kia: $5.2bn, Visa: $8.5bn, Gazprom: $7bn, Adidas: $6.8bn and Budweiser: $4.3bn].

Brand value could be lost

"These billion dollar valuations refer specifically to the value of brand rather than the business entity, so theoretically all of this value could be lost as it is intangible and contingent upon reputation and continuing consumer goodwill. That goodwill is ebbing away and only a comprehensive overhaul of the governance of the organisation is likely to reverse it."

It added: "Negative headlines now surround not just Fifa itself, but the sponsors too. With Fifa apparently deaf to calls for change, activists and social media users are turning their fire on the top tier sponsors, accelerating the reputational risk.

"Fifa's own brand is in the most imminent danger of all, being heavily contingent upon the support of its partners and sponsors. It is down to $2.8bn, having lost $400m in the last few days alone as the result of the arrests and subsequent negative attention.

"Even broadcast revenues could be under threat as the possibility of relocation of World Cups in Russia and Qatar creates significant uncertainty. A boycott of Fifa by national football authorities has even been mooted, which would lead to the collapse of [its] $12bn franchise."

Brand Finance chief executive David Haigh said: "Sponsors have partnered with Fifa in order to build their brands, not have their reputations tarnished. The kind of activities that are alleged to have been going on could destroy billions of dollars of brand value. A lot depends on what happens in the next few days but without knowing how quickly Fifa are going to clean out the Augean stables, my recommendation to the major sponsors would be to move towards the exit.

"As for Fifa, if [president Sepp] Blatter were to stand down with immediate effect, that go a long way to securing its future and we estimate it would add over half a billion to Fifa's brand value."