The World Cup

Competition and Corruption

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No sporting event is more popular than the World Cup. Almost half of humanity — more than 3.2 billion people – tuned in to the monthlong competition in Brazil in 2014. But long before nations compete on the field, they vie for the prestige of hosting the spectacle to crown the best team in what most of the world calls football and America calls soccer. That competition can spell trouble. Corruption scandals plague the sport and graft was blamed for inflating costs for the World Cup in Brazil. It’s already an issue dogging future tournaments in Russia and especially Qatar, the chosen host in 2022. The indictments of international soccer officials in May in a U.S. government graft investigation has given new context to a question as old as the event itself: Is corruption indelibly staining the crown jewel of the beautiful game?

The Situation

Swiss police raided a Zurich luxury hotel on May 27 after the U.S. Justice Department accused senior officials at FIFA, soccer’s ruling body, of racketeering, fraud and money laundering conspiracies. The alleged crimes led to the arrest of 14 current or former executives. The sport’s global overlord, Sepp Blatter, said he would resign as FIFA president. Switzerland is probing whether anyone broke laws in awarding World Cup tournaments to Russia and Qatar. FIFA was already under fire after its own two-year investigation into how Russia and Qatar won their bids was never released in full and the man who led it resigned in protest. Russia’s 2018 tournament could become a flashpoint like the 2014 Sochi Olympics, which featured concerns about graft and civil rights and was followed by Russia’s annexation of part of Ukraine. There were calls to strip Qatar of the 2022 event after claims that it paid bribes to officials who voted for the tiny desert emirate, where summer temperatures reach 122 degrees Fahrenheit (50 Celsius). Qatar was cleared by the FIFA investigation. The country plans to lavish $200 billion on air-conditioned stadiums and related infrastructure, and there are reports of deaths and abuse of migrant workers. In March, FIFA said Qatar’s tournament will be shortened and moved to the winter to avoid the searing heat, upsetting the professional league schedules.

Source: FIFA, host countries, Bloomberg
Source: FIFA, host countries, Bloomberg

The Background

Disputes over where to hold the World Cup have afflicted the event since it was first played in 1930, when the selection of Uruguay resulted in only four European teams making the three-week trip for the tournament. Eight years later, Uruguay and Argentina boycotted the 1938 competition because it was given to Europe for the second straight time. FIFA experimented with a rotation around the various continents; now it will take bids only from those continents that haven’t hosted either of the last two tournaments. Despite claims by politicians, recent history shows there is little — if any — financial benefit to hosting the World Cup. South Africa, for example, recouped just a 10th of the money it spent on stadiums and infrastructure for the 2010 tournament, the first in Africa, though it provided a much-needed upgrade to the transportation system. Allegations about the award to Qatar, the first in the Middle East, began to surface soon after it beat competition from the U.S., Australia, South Korea and Japan in 2010. While Canada, Colombia, Mexico and the U.S. are considering making bids for the 2026 tournament, the U.S. doesn’t plan to submit an offer unless rules are changed to provide more transparency in the voting. All 209 national football federations have an equal vote, and payments to poor countries have become the focus of the corruption investigations.

The Argument

Spreading the World Cup around the globe drives the sport’s development. Under Blatter, FIFA said it pushed the tournament into “new lands” to give countries a chance to showcase their culture on an international stage. Critics of the selection process cite both institutional and philosophical problems. Some highlight the money-losing proposition for developing nations — such as Brazil — that might spend the funds in other ways. Others say the selection process is made a farce by corruption fed by billions of dollars reaped from television rights. While FIFA says it wants to root out the problems and has made changes to its corporate governance, critics say the moves haven’t gone far enough. Corporate sponsors such as Sony and Adidas — which provided a total of $404 million of sponsorship money to FIFA in 2013 — pressed the soccer body to fully investigate the allegations about Qatar’s bid. Emirates, the Dubai-based airline, and other companies have dropped sponsorship of FIFA and the World Cup.

The Reference Shelf

  • An Amnesty International report about workers’ rights in Qatar.
  • Bloomberg Businessweek chronicled Sepp Blatter’s dominance of international soccer on April 30, 2015.
  • Full text of the U.S. government’s 47-count indictment against nine FIFA officials and five corporate executives.
  • “Brazil’s Dance With the Devil,” a 2014 book by Dave Zirin.
  • A report on the impact of the 2006 World Cup in Germany, and South Africa’s report about the 2010 tournament. A study by the accounting firm KPMG that includes an analysis of the 2010 event in South Africa and a Bloomberg News article about its legacy for Johannesburg commuters.
  • John Oliver, host of “Last Week Tonight” on HBO, ranted about FIFA in a June 2014 broadcast.

First Published June 10, 2014

To contact the writer of this QuickTake:

Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editor responsible for this QuickTake:

Leah Harrison Singer at lharrison@bloomberg.net