After two days spent reading about murder and political retribution, you’re probably ready for a hot, juicy dose of World Cup-related accounting fraud. Well, cut into this steak, sailor: India’s Satyam, one of the six major corporate sponsors of the World Cup (and FIFA’s official IT services provider), has been caught massively overreporting its worth, to the tune of about 50 billion rupees. (It’s a loud tune. It sounds like a broken piano playing a billion dollars.) It’s important to note that this isn’t FIFA’s fault, unless it’s a case of like souls meeting in the mist. But it does mean that the World Cup will either have to replace one of its six major sponsors or be seen cavorting with the Enron of India. Which would you choose?
UPDATE: It turns out that Satyam are one of the top twelve World Cup sponsors, not one of the top six. See the comments for clarification. Sorry about the error. It doesn’t affect the basic point.
Read More: Corruption, World Cup
by Brian Phillips · January 8, 2009
To be legalistic (I can’t help myself sometimes), Satyam aren’t really one of the “six major sponsors”. Like most organisations of its ilk, FIFA tiers its sponsorship levels, and Satyam only made it into the second tier. The “FIFA Partner” label is reserved for those icons of social responsibility at Coca Cola, Emirates, addias, Sony, Hyundai and Visa.
Satyam were only able to buy their way into the second circle (or should that be the eighth?).
Some bumf on the wonders of the FIFA system from the horse’s mouth (or other orifice): http://www.fifa.com/aboutfifa/marketingtv/marketing/sponsorship/index.html
And Satyam still are featured on the WC2010 website, see the bottom of the home page: http://www.fifa.com/worldcup/index.html and here: http://www.fifa.com/worldcup/organisation/partners/index.html
That’s my fault; thanks for clarifying, ursus. It’s a point that’s being misreported all over the internet.
The source of the confusion is the way FIFA describes their sponsorship tiers; for instance, here, in their 2007 announcement of their partnership with Satyam:
If you don’t read that carefully, you come away with the idea that there are six main World Cup sponsors, and as Satyam has just joined the six-member FIFA World Cup Sponsor lineup, they must be one of them. Actually, of course, the FIFA World Cup Sponsor level is beneath the FIFA Partner level. I’d assumed that the Partner level described a more general relationship with FIFA that wasn’t as World Cup-focused, but actually the Partners—not the World Cup Sponsors—are the main World Cup sponsors.
It all makes a kind of gruesome sense. Anyway, it’ll be interesting to see what Zurich does about this. I’ll give them a few days to deliberate before I decide that Satyam won’t be dropped. How could a course of action be settled on if no one had talked for 72 straight hours, after all.
The opacity is of course intentional, as it serves each of the parties’ interests for their role to appear to be as grand as possible. One can draw parallels to the US grading system for olives, in which “jumbo” is one of the smallest sizes to be found on supermarket shelves. The most effective measure of sponsors’ respective influence (and contributions) is who has the best sideline hoardings and largest hospitality tents.
It’s quite possible that events will allow FIFA to save its blushes without taking any extraordinary action. Satyam is very unlikely to survive in anything like its pre-crisis form, and the sponsorship contract likely gives FIFA an automatic out in the event of a change in control.