Slavek and Slavko, the Ukrainian and Polish Euro 2012 mascots with the soccer championship’s official ball.

When major international events like the European Championships are tainted by corruption allegations, the sponsors suffer too – By Thomas Kistner

There was widespread amazement in early 2007 when soccer’s governing body in Europe, the Union of European Football Associations (UEFA), awarded the Euro 2012 European Championships to rank outsiders Poland and Ukraine. They had the worst technical evaluation of all the candidates. The Polish-Ukrainian bid beat out Italy in a vote of 8:4 and also defeated the joint Hungary-Croatia entry.

There were immediate suspicions of corruption, which became stronger in 2010 and overshadowed preparations for Euro 2012. A soccer official from Cyprus offered alleged proof that four UEFA executives took bribes for their votes. But instead of listening to the whistleblower, UEFA’s political leadership did not even take steps to examine the alleged evidence.

On the contrary, the Cypriot was placed under so much legal pressure that he locked away his documents. To this day, UEFA has not chased up any of the incriminating leads, despite the material’s apparent credibility. For this, the anti-corruption body Transparency International has publicly criticized UEFA.

This messy affair highlights the dilemma surrounding big sporting events. In a process utterly lacking in transparency, a small number of functionaries decides by secret ballot who is to host the event; at the same time, these very officials insist on the old-fashioned notion that secures their omnipotence – namely, that sport is independent, and that politicians should keep out of it, even when the functionaries’ decision has considerable political consequences.

Whether it’s corruption, human rights abuses or dictatorial regimes – when the awarding of major sporting events call the events themselves into question, there are other losers, too – the sponsors.

The problem has been a big one since the 2008 Beijing Olympics; and with Euro 2012 in Ukraine it has reached a new dimension. It has become a dangerous business for the sponsors since the introduction of a political boycott against Ukraine due to the government’s treatment of opposition leader Yulia Timoshenko; key European politicians will not be attending. This gives the whole event a feeling of illegitimacy. And when the product suffers, then those who are advertising via it also suffer.

It’s a tricky business. A number of sponsors made public statements ahead of the Championships. “We are not happy with the political situation in Ukraine,” is one example, from tire maker Continental. But a sporting event will not succeed where successive governments have failed – to make the country more democratic.

The old hands in the sponsoring game are more restrained. Coca-Cola says it does not wish to take a position on political events with no direct relevance to its business. And Adidas has simply adopted UEFA’s own attitude. The world’s second-biggest sporting goods manufacturer after Nike – in from the start like Coke – said: “This is a matter for politicians to decide, not UEFA and certainly not the sponsors.” The company did not want to interfere in the internal affairs of government, a statement said.

This is the typical rhetoric of advertising. In reality, the sponsors have already interfered as soon as their profit motives have led them to invest in national spectacles showcasing autocrats or potentates who’ve made their billions from raw materials.

The companies also keep out of the political battles so as not to annoy UEFA. That could make negotiating future sponsorship deals much more difficult.

Adidas is one of the ten top sponsors of Euro 2012, along with Continental, Hyundai, Carlsberg, Coca-Cola, McDonalds, Canon, Castrol, Orange and Sharp. Industry observers estimate that they are each putting 30 to 40 million euros into the Championships, but there are no exact figures available. For that, the sponsors get a package of services: exclusive presence at the edge of the pitch, in the stadiums and immediately around the stadiums, and of course during television broadcasts. The sponsors’ banners will flutter outside the venues. On top of that, sponsors receive tickets for customers and business partners.

Appearances by the competition in and around the Championships are closely monitored by the top sponsors, as well as by UEFA agents. And, thanks to UEFA’s first-rate connections with government leaders in the host countries, such appearances by competing firms are banned if considered too prominent. Behind the glittering scenes, major sporting events are the exact opposite of sport, enjoyment and fair play. The longtime head of marketing at the International Olympic Committee, Michael Payne, called them “bloody battlefields” in his book “Olympic Turnaround.”

The soccer European Championships are of tremendous value to Adidas. The sporting goods manufacturer, one of Germany’s 30 blue-chip companies, is kitting out 6 of the participating teams, one more than its US rival Nike. Among the Adidas-equipped teams are the favorites: Spain (defending champions and World Cup winners in South Africa in 2010) and Germany. Adidas also kits out the referees and provides the ball. The company is also hoping to make good sales with Euro 2012 shirts and other fan memorabilia. Adidas plans to make more than €1.5 billion ($1.9 billion) in sales of its soccer-products business in this European Championship year.

The other sponsors are not publishing such concrete predictions. Insiders say that some of the companies corrected their expectations downward in the wake of the bombings at the end of April and the Ukraine boycott debate.

Coca-Cola and McDonald’s have been in the game so long that they are unlikely to back out unless something very untoward occurs. But the others are noticeably tense, for these championships have a number of question marks over them. What will the fans make of the debate – while they are staying in their tens of thousands at campgrounds?

Many of the sponsors have signed deals with UEFA which run beyond 2012. They cannot get out of those contracts, the money has been paid, and their names will appear at the side of the pitch whatever happens.

Many millions of euros are at stake here. How long will the sponsors stand for this kind of uncertainty, as sports officials choose ever-riskier hosts for big events?

“The companies are rethinking, maybe they won’t go along with everything,” says Oliver Kaiser, head of the sponsors’ association, FASPO. He believes the sponsors will soon be negotiating an opt-out for situations where human rights issues or corruption allegations arise. To date, sponsors can only opt out in the case of doping.

The growing pressure from consumers is behind this rethink. Sponsors get to hear about dissatisfaction more and more via social networks. In late 2011, animal rights activists used Facebook to call for a boycott – after it became known that stray dogs in Ukraine were to be rounded up and destroyed ahead of Euro 2012. The campaign led to a storm of protest, with consumers pouring scorn on McDonalds, Continental and Adidas. The companies gave in, publicly professing their pro-animal rights positions.

“Sponsoring is an image transfer,” says Kaiser. In an interview with a specialist publication he comes to the conclusion that “the initiative has to come from the sponsors.” That would mean the end of silence for the benefit of organizers who seek to raise their own profiles through big tournaments – using the good names of global corporations to pay for it.