Fifa struggling to find backers for Russia World Cup

Fifa struggling to find backers for Russia World Cup
Russian President Vladimir Putin with former Fifa president Joseph Blatter in St Petersburg in 2015.
By bne IntelliNews April 19, 2017

Global soccer federation Fifa is struggling to find sponsors for the 2018 World Cup to be hosted by Russia, while slow venue construction and controversy continue to dog the preparations, including claims that slave labour was used to build a key stadium.

Fourteen months before the tournament opens in cities across European Russia and before the start this June of the Confederations Cup, which serves as a rehearsal, Fifa has contracts with only 10 sponsors compared with 20 before the previous World Cup in Brazil, Vedomosti reported on April 19.

International and local companies are reluctant to back the Russian edition because of potential reputational and financial risks, and with Moscow’s relations with the West heavily strained over its actions in Ukraine and Syria.

The 2018 event is also still mired in controversy over Russia’s selection as host, which was made even before Fifa’s executive committee voted in late 2010, according to former Fifa president Joseph Blatter.

“In 2010, we had a discussion of the World Cup and then we went to a double decision,” Blatter was quoted as telling Russia’s TASS news agency in 2015, when he was suspended over corruption allegations that eventually led to his resignation. “For the World Cups it was agreed that we go to Russia [in 2018] because it’s never been in Russia, eastern Europe.” Qatar was simultaneously awarded the 2022 edition.

Fifa’s contracts with major backers Sony and Emirates expired in 2014, and the only recent major contract was with Chinese electronics manufacturer Hisense, which the Financial Times estimates to be worth $100mn (€94mn).

Interestingly, Russian companies appear equally reluctant to back the 2018 World Cup, with only Alfa Bank currently on board.

Meanwhile, Fifa hasn’t yet signed a TV rights deal with any Russian broadcaster for the tournament. In early April, Bloomberg reported that local networks rejected the $120mn price tag, which was three times as high as that for the Brazilian tournament.

In addition to problems finding backers, Russia is reportedly behind schedule in building tournament venues. The country’s most expensive stadium, Zenit Arena in St Petersburg, has been under construction for over ten years, and the cost of the project has gone up sixfold to RUB41.7bn (€697mn) over that period.

The arena is to host its inaugural match on April 22, but the local division of the Federal Anti-Monopoly Service says the stadium still needs extra work, Interfax reported on April 18.

The project was also marred by allegations about the use of slave labour in the construction. In early April, Norwegian football magazine Josimar reported that two Russian construction companies involved in building the Zenit Arena were using North Korean slave labourers.