Why the World Cup is so popular with big business, scandal, and everything
Even though the 2018 World Cup in Qatar has been dogged by scandal, businesses and nations alike are vying for a piece of the action.
On Sunday, when the first match of the World Cup got underway in Qatar, Mohamed Jaidah was in a prime spot to watch it. The Qatari executive sat back on a couch in the Al Bayt Stadium V.I.P. hospitality suite, taking in the event from a ringside seat with a buffet and open bar (alcohol is included for the privileged audience while being outlawed for most fans) and a direct view of the pitch.
Mr. Jaidah, group executive director of Jaidah Group and distribution partner in Qatar for Hyundai (a FIFA sponsor), had to go and reopen an old wound. He remarked, "Many people in this country were not pleased when we were awarded the opportunity to host the World Cup in 2010." That we persevered through 12 years of media abyss only strengthens our sense of pride.
Outlets, including The Times, have extensively reported the "hell." Human rights groups have claimed that thousands of migrant laborers died while building 7 seven World Cup stadiums and other projects in the scorching desert heat, but the government has only admitted to three such deaths. The international soccer governing body FIFA has been criticized for allowing a little country where homosexuality is illegal to hold the world's largest athletic event.
All the players want to be heard. Concerned about the persecution of the L.G.B.T.Q. Population in Qatar led several European players to consider wearing rainbow-colored "One Love" armbands in solidarity with minorities until FIFA threatened punishment for teams who did so. On Wednesday, as spectators and T.V. watchers watched, German players protested the FIFA decision by covering their lips before the game. This quiet gesture of defiance echoed for days, even after a stunning loss to Japan.
The sports business is typically chaotic and unpredictable, even when things go smoothly. FIFA is one of the only institutions that has capitalized on this fact to the extent that it now wields unrivaled authority in the professional sports industry. Nations will go to great lengths to host the nearly month-long tournament; the United States (U.S.), Canada, and Mexico will host the next World Cup. Even though governments in Asia, South America, and Africa represent potential development opportunities for big business, many of these regions' leaders are unconcerned with socioeconomic topics that preoccupy Western news outlets. This starkly contrasts the many instances where cities have backed out of Olympic bids due to widespread outcry. Since soccer is a popular program among governments, FIFA has pledged substantial support to its national associations.
In 2010, FIFA's executive members shocked the soccer world by choosing Qatar as the 2022 host instead of the United States. Loretta Lynch indicted 14 FIFA officials and marketing executives in 2015 for "rampant, systemic, and deep-rooted" corruption, $150 million in bribes to secure World Cup commercial rights over 24 years. Football's governing body was nearly toppled after F.B.I. raids and arrests, and its longstanding president, Sepp Blatter, resigned. In 2020, the Justice Department accused a few FIFA voting officials of accepting millions of dollars in bribery to secure Russia's 2018 World Cup and Qatar's 2022 World Cup.
The Qatari government has denied wrongdoing, and FIFA claims it has eliminated all corrupt officials.
Even with the issue, significant corporations like Visa, Sony, and McDonald's quickly signed up. Bloomberg reached out to 76 FIFA sponsors and teams this month, and not one of them stated it was thinking about pulling out of the tournament. The company estimates that the tournament may increase sales by 400 million euros.
Yet the laws can change even after corporations have spent millions, leaving them with no recourse. Qatar outlawed alcohol consumption in all eight of the tournament's venues just two days before the competition kicked off. A.B. InBev, the beverage company that pays FIFA $75 million every four years so that its Budweiser brand can be a beer sponsor, had to quickly remove its goods from the venues and postpone several promotional events. The Budweiser Twitter account removed the following response: "Well, this is awkward." Budweiser will return as a sponsor for the 2026 World Cup, making things less unpleasant for everyone involved.
There has been no apparent corporate boycott, and FIFA boasts that all available sponsorship opportunities have been snapped up by companies old and new, including Coca-Cola, Adidas, and even Crypto.com.
Many corporations brag about their E.S.G. (environmental, social, and governance) credentials and marketing efforts back home, targeting audiences concerned with issues like L.G.B.T. rights. However, the tournament demonstrates that corporations are ready to risk a reaction they hope will be forgotten as long as the world is watching, even in an era where social media can amplify a corporate blunder in Qatar. The benefits are enormous. Soccer is the most-watched sport in the world, with FIFA estimating five billion viewers for the tournament (think the Super Bowl viewership times roughly 50). The estimated revenue for FIFA's World Cup is $4.7 billion. The company appears to have recovered from the controversy and is now flush with cash and the associated influence.
When he was elected president of FIFA in 2016, the 52-year-old Swiss soccer entrepreneur Gianni Infantino promised to eradicate corruption and restore the organization's shattered reputation. He persists in spreading that ideology. He made a strong case for awarding the World Cup to Qatar and said his organization had undergone a sea change in the days leading up to the tournament. He stated, "Money just doesn't evaporate anymore in FIFA." There is a definite investment in football infrastructure because money flows where it has to go. (Meanwhile, Mr. Blatter has recently stated that Qatar was not entitled to victory. He reportedly told a Swiss media consortium, "It's a country that's too small."
It is believed that Qatar invested almost $200 billion in infrastructure (including high-speed rail, highways, and stadiums) in preparation for the World Cup. It would cost over $15 billion, over 15 times what Russia spent on hosting the 2018 tournament. Government data shows that in the first half of 2022, Qatar received nearly $32.2 billion from oil and gas income, a 67 percent increase over the previous year due to war inflation.
Qatar's rise to prominence in world sports goes far beyond its efforts to attract FIFA. "The World Cup is altering everything – it is excellent for us," Nasser al-Khelaifi, C.E.O. of Qatar Sports Investments, told me in 2013. It's a powerful instrument for change.
Qatar bought the financially struggling and underachieving Paris St. Germain professional club in the French capital a year after gaining the right to host the tournament and quickly transformed it into a global powerhouse. P.S.G., led by Mr. al-Khelaifi as president, has bought its way to the top of the domestic league and is widely recognized as a cultural icon. An estimated $1.45 billion has been spent by Qatar to acquire several superstar players for the club. These players include Lionel Messi of Argentina, Neymar of Brazil, and Kylian Mbappé of France, who, at age 23, signed a contract allegedly for $250 million over the next three years.
Mr. Jaidah, a Qatari business leader, says the attacks on human rights have backfired and unified the country. He is particularly upset by claims that Doha bought its way into world sports with the World Cup. He believes Westerners have an "indecent feeling," wondering why they should maintain their money. In the minds of Qataris, "it is our country, our wealth."
Meanwhile, FIFA's financial machine is a winner on and off the field. On December 18, Infantino predicts that billions of viewers will watch the final, making it an irresistible advertising opportunity.
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