The governing body for world football, FIFA, was radically transformed between 1974 and 1998. Previously known as an unadventurous
organisation, FIFA became a more commercially aligned operation under João Havelange and, as with the Olympics, the 1980s saw significant changes.
From 1982, the FIFA World Cup began to expand. Between 1934 and 1978, 16 national teams took part in the World Cup Finals36 before the
competition was expanded to include 24 teams in 1982 and then 32 teams in 1998. The FIFA World Cup was first televised in 1954 and the primary sale of broadcasting rights was to the World TV consortium of public broadcasters with the European Broadcasting Union (EBU) leading the negotiations (Jennings, 2006). This arrangement remained unchallenged until 1996 when FIFA, advised by ISL, were convinced that the PSB
monopoly led by the EBU was acquiring broadcasting rights for well under the potential market value - without demand created by competition, prices for broadcasting rights remained relatively deflated. Unlike the Olympics, there was virtually no demand from US broadcasters for the World Cup. On the other hand, the massive audiences attracted to the free-to-air terrestrial PSBs had tremendous appeal to potential corporate sponsors. Paradoxically, achieving the highest price for broadcasting rights did not necessarily
deliver the most profitable outcome to FIFA.
FIFA’s transformation was initially linked to the rapid expansion of the football marketing business, but it is the subsequent amalgamation of: (a)
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the interests of large corporate sponsors with, (b) sympathetic event management and television coverage that (c) provides access to mass audiences that is significant. FIFA’s own sales pitch says: “Together with the official broadcasters who deliver worldwide TV and radio coverage of the events, the sponsors and licensees are the pillars that support the staging and promotion of a FIFA event” (FIFA, 2009).
During the 1970s and 1980s the football marketing business was largely formed by two men: Patrick Nally and Horst Dassler, son of Adi Dassler the founder of the Adidas sporting goods firm. Nally advised sports organisers how to package their events in ways that would be appealing to
broadcasters and sponsors then he would persuade companies like Coca- Cola to become sponsors of these events. Ahead of the 1982 World Cup, Nally set out a formal sponsorship practice titled Intersoccer that identified exactly what rights would be accorded to sponsors and how these rights would be protected on their behalf (Nally, 1979). Intersoccer was broadly similar to Ueberroth’s three-tier structure for the 1984 LA Olympics; it became a very influential template.
Nally also cooperated with Dassler at the 1978 World Cup in Argentina selling advertising space, but Dassler became convinced it was the business of sports broadcasting rights that had the greatest potential (Smit, 2006). Up to this point, no third party company beyond a sports federation or broadcasters had held the broadcasting rights to a major sports event. Dassler jettisoned Nally and teamed up with the Japanese advertising giant Dentsu. In the autumn of 1982, a marketing and broadcasting rights
holding company called International Sport and Leisure (ISL37) was set up
in Lucerne, Switzerland. The new firm quickly corralled the football marketing business.
Dassler38 continued to advise Havelange and, from 1982, FIFA greatly
expanded its commercial ventures including advertising and merchandising. ISL paid 45 million Swiss francs for the 1986 World Cup in Mexico and they raised over 200 million Swiss francs from assorted sponsors, profit that went directly to FIFA, unlike the relationship between the 1984 LOCOG in LA and the IOC (Smit, 2006:196). In 1988, the award of the 1994 World Cup to the United States appeared to underline FIFA’s interest in profit and engaging corporate interests.
According to Smit, for several years ISL were issued huge broadcasting rights contracts for both the Olympics and the World Cup Finals without a second thought given to the process (Smit, 2006:196). For the first time, broadcasting rights from sports governing bodies were held by a third party for subsequent sale to broadcasters without the need for ISL to make any programmes – it can be argued that the creation of value, as a separate process from production, reflected the general swing away from the
production of goods to the provision of services that was taking place in the wider economy. The ISL operation was a trailblazer for other rights holding companies to follow, including IMG, Kirch Media and SportFive.
37 ISL was jointly owned by Dassler and Dentsu. Smit (2006:210) claims Dassler persuaded
Dentsu to give him a 51% share in ISL that he placed in a holding company called Sporis.
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Anecdotally, it is said that Dassler taught Havelange to sell the World Cup and Samaranch how to market the Olympic Games.
As was the case with the Olympics, the World Cup Finals were redefined in ways that mostly benefited FIFA. This included placing the marketing strategies of large transnational corporations at the very heart of
tournament staging and television presentation. In a set up reminiscent of The Olympic Programme (TOP) - believed by Smit (2006) to have been conceived by ISL - signing a group of primary sponsors was designed to (a) spread the financial risk of the World Cup Finals and (b) result in less
dependence on revenue from the sale of broadcasting rights alone.
However, the two activities remain intricately linked. The conversion of the governing institution of football into a corporate organisation that, for
example, now hedges against variations in currency exchange valuations, or that requests tax-free status and fast-track work permits when operating in a host country (Jennings, 200639) is part of the overall transformation. The
ISL-FIFA joint marketing strategy provided a commercial base from which international football - now being sold as a highly commercialised
entertainment industry and marketed as “the World’s game” - could extend its relationship with the transnational corporate world. In other words, the four-year period between 1982 and 1986 saw a new corporate–sport–media axis emerge that enabled the dramatic rise of global televised sport events from the mid-1980s well into the 21st Century. As the rest of the sports
world assimilated these new business models, the next step was their adoption by national and regional sports federations.
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Jennings reiterated his argument in a high profile Panorama documentary titled “Fifa’s Dirty Secrets” and broadcast on BBC One at 20.30 on 29.11.2010