What are the prospects for FIFA reform?

By Roger Pielke, Jr. a professor at the University of Colorado. This post is based on a recent paper “How Can FIFA be Held Accountable?” which will be presented at the 2011 Play the Game conference in Cologne in October. Roger blogs at https://leastthing.blogspot.com

In 1983, upon learning that that the 1986 World Cup was assured to be awarded by FIFA to Mexico even before the process had been completed, Henry Kissinger is reported to have said, “The politics of FIFA, they make me nostalgic for the Middle East.”  The decades-long on-again off-again concern about corruption and a lack of transparency in FIFA is on again, and this time, it looks like it will remain a prominent issue that requires some sort of resolution.

photo: Eric The Fish

That FIFA has governance problems is now generally recognized, even by Sepp Blatter, FIFA’s president, who has promised to present a reform agenda in late October.  In a recent report, Transparency International has helpfully provided FIFA with a blueprint for many useful reforms.  However, because FIFA lies outside the reach of virtually any means of accountability, we should not expect meaningful reform until strong mechanisms of accountability are in place.  This post explains what such mechanisms might look like.

For academics the accountability of international organizations is an important subject, though scholars typically focus on institutions like the UN or the World Bank rather than sports associations.  Two scholars, Ruth Grant and Robert Keohane, provide a nice summary of seven mechanisms of accountability that are used to hold international organizations accountable: hierarchical, supervisory, fiscal, legal, market, peer and public reputational.  It turns out that FIFA is not directly subject to any of these mechanisms, meaning that the organization can ignore calls for reform with little or no consequence.

FIFA is governed entirely by insiders, so with leadership that resists change there is not much room for change from within.  In a recent book Chung Moon-joon, former FIFA vice-president, details the pressures that he was under within the organization when he raised issues of governance.  FIFA has also set up governance mechanisms that work against accountability; for instance, it has no board of directors or equivalent external body.

FIFA is a non-governmental organization that is incorporated in Switzerland.  This means that the world’s governments have little ability to influence FIFA directly.  Occasionally a government will stand up to FIFA on comparatively small matters, such as when the government of Belize recently protested successfully against FIFA’s suspension of its national team from World Cup qualifying.  Because FIFA is Swiss-based it is subject to the legal provisions of Swiss law, and while there have been some actions by the Swiss government to look into FIFA’s activities, for the most part the government has taken a light role in attempting to regulate the organization.

Other football organizations such as the European Club Association have challenged FIFA on issues such as player release and liability in international competition.  In 2006 a lawsuit under the European Court of Justice was brought by Sporting Charleroi, a Belgian club (with the support of 18 of the largest clubs across Europe), against FIFA over compensation to clubs for their players who become injured in international competition. That suit was settled out of court, indicating that when it comes to the law, even FIFA has to comply.

Despite releasing an annual financial report and being audited by KPMG under Swiss law, many of FIFA’s fiscal decisions are opaque – even the salary of its president is not publicly available. There are no mechanisms that can be applied to make its books more transparent and open.  With football now a big business, FIFA sees billions of dollars in revenue from TV contracts and sponsorship.  One might think that the companies that support FIFA would demand accountability, but experience shows that such corporations are usually followers rather than leaders when it comes to motivating reform.  Part of the reason is the co-dependency of the corporations and FIFA – consider that in 2010 more than $2 billion of Adidas’ $17 billion in total revenue came from World Cup jersey and ball sales.

FIFA has no real peer organizations and does not seem to care much about its public reputation.  And why should it?  Most people who are interested in football – which is a large share of the global public — care about what happens on the pitch, and not so much esoteric issues of sports governance.  So FIFA can thumb its nose at calls for reform with really no consequence.  Of course, if persistent problems with match fixing become associated in the public eye with FIFA governance, public opinion could swing against the organization.

FIFA’s distance from mechanism of accountability helps to explain why decades have gone by with little or no change. However, this situation may now be changing.  There is growing interest among football insiders for FIFA reform. Karl-Heinz Rummenigge, chairman of the ECA, recent warned that a “revolution” was coming to FIFA and compared Sepp Blatter to Hosni Mubarack who failed to see the revolution coming.  Blatter’s October reform agenda, whatever it contains, will no doubt keep attention focused on the institution and its governance, and heightens expectations for positive change.

To understand how reform might occur and how mechanisms of accountability might be strengthened, we can look to the experience of the International Olympic Committee which went through its own period of reform over the past 15 years.  After a bribery scandal was revealed in 1998, the IOC saw some dramatic change in its governance and transparency motivated by the confluence of government intervention, establishment of legal sanctions to sponsors and sustained media attention.

For FIFA, the pressure now being applied to it from many directions may be sufficient to usher in an era of constructive reform.  But history would suggest that such reform will not come easily.  More likely, it seems, formal mechanisms of accountability will have to be invoked, such as under relevant national anti-corruption laws which threaten the ability of FIFA’s sponsors to continue to do business.  Such mechanisms are most likely to be wielded in Europe and especially the UK, but there are other possibilities as well.

Ultimately, when reform does take place FIFA will find itself much better integrated into global systems of governance, and as has been the case with the IOC, this will be good for sport.  But reaching that point may be a difficult and protracted affair.