Adidas feels heat of World Cup graft claims

Allegations that Germany bribed its way to secure the right to host the 2006 World Cup not only shook the football world, but also shone a spotlight on cosy ties between sportswear giant Adidas and FIFA.

Adidas feels heat of World Cup graft claims
Adidas have sponsored the World Cup since 1970. Photo: DPA

At the heart of the latest graft claims to rock world football is a 10.3 million Swiss francs payment made in 2000 by Adidas's former boss Robert Louis-Dreyfus to the German Football Federation (DFB).

News weekly Der Spiegel claimed in a report late last week that DFB borrowed the sum in order to buy the votes of four Asian members of FIFA's 24-strong executive committee.

The magazine claimed the DFB subsequently transferred 6.7 million euros – the equivalent of the borrowed Swiss francs at the time — to a FIFA account in 2005 to repay Louis-Dreyfus.

The DFB has denied the claims, while Adidas has sought to distance itself from the case.

“We are not aware of such a payment by Robert Louis-Dreyfus,” said the brand with the three-stripes logo. “We can rule out that it was a business operation of Adidas AG.”

In other words, Louis-Dreyfus could have used his own money, and not company funds, an Adidas spokesman told AFP.

'Some impact on reputation'

Investment bank Berenberg's analyst Zuzanna Pusz warned that the German magazine's claims “could have some kind of impact on their reputation”.

No legal consequences have arisen from the case so far, as German prosecutors said Monday they were still examining whether there were grounds to launch a probe.

But the wealth of French businessman Louis-Dreyfus, who died in 2009, has been dogged by controversy.

In 2001, he transferred millions to the former president of Bayern Munich, Uli Hoeness.

The recipient has claimed it was a private gift for him to gamble on the stock market.

Critics have speculated the sum was the price to keep the prized Bundesliga side out of the reach of Adidas's US rival Nike, a claim Hoeness has denied.

This time, the charismatic businessman's dealings are being exposed at a time when FIFA is in its deepest crisis over far-reaching corruption scandals that have already left 14 football officials arrested, the governing body's chief Sepp Blatter suspended and the awarding of at least two World Cups under investigation.

Switzerland's probe into the awarding of the 2018 World Cup to Russia and the 2022 tournament to Qatar was already awkward for Adidas, the main sponsor of the games since 1970.

But with the World Cup hosted in Germany also being called into question by the Spiegel report, that is just getting too close to home for Adidas.

The German brand has a contract worth 30 million euros a year with FIFA that runs until 2030.

Until now, that investment has always paid off — in 2014, the year of the Brazilian World Cup, revenues from footballs, jerseys and other related products pushed sales of its football merchandise up by a fifth to reach 2.1 billion euros.

In 2006, the brand took in 1.2 billion euros in such revenues, up 30 percent.

FIFA key for Adidas

Beyond any immediate damage to Adidas' reputation for its association with FIFA and the World Cup, the latest corruption scandals engulfing the football world also stirs up memories of dark days for the family behind the brand.

Horst Dassler, the son of Adidas's founder, in 1982 founded International Sports and Leisure (ISL), a company that collapsed under a mountain of debt, but which had previously made a fortune after it obtained exclusive TV rights for the World Cup.

In 2012, FIFA began investigating illegal payments made by ISL and concluded that the company had paid bribes to FIFA top officials including former FIFA president Joao Havelange.

“There is an archaic system (at FIFA) with these archaic people. Television brought money and taught these people to love money,” said European football boss Michel Platini, who himself has also been suspended over corruption claims.

These links, which have resurfaced amid the FIFA crisis, are a thorn in the side of Adidas.

“Horst Dassler died in 1987,” and “ISL is owned by the Dassler family, not Adidas,” said the brand's spokesman, slapping down all association with the sportswear giant.

Nevertheless, the company would not go all the way to making a clean break with the world football body.

Unlike Coca-Cola, McDonald's, Visa and Budweiser, which have demanded that Blatter step down immediately from FIFA's top job, Adidas has so far shied away from making such calls.

After all, “FIFA is much more important for Adidas than for Coca-Cola,” said Pusz.

“Given their position in football, they would obviously have quite a lot to lose if they were to dissociate themselves entirely from FIFA.”

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


British football teams allowed to skip Germany’s quarantine for Euro 2020

Germany's government announced on Tuesday it will allow England, Scotland and Wales to enter the country without quarantine to play at Euro 2020 despite a recent rise in cases linked to the Delta variant of Covid-19 in Britain.

British football teams allowed to skip Germany's quarantine for Euro 2020
One of the venues for Euro 2020 is in Munich. Photo: picture alliance/dpa | Sven Hoppe

The three teams could potentially reach the quarter-final held in Munich on July 2nd.

If that were the case, they would be exempt from the rule that travellers from the United Kingdom and Northern Ireland must currently observe a 14-day isolation period due to the virus strain of concern – Delta – first identified in India.

“The people accredited for the European football Championship are exempt from the quarantine obligation, even after arriving from an area impacted by a variant” Berlin said in a statement.

“This exemption concerns all the people who have been accredited by the organising committee for the preparation, participation, the holding and the follow-up of international sporting events,” it added.

The exemption does not include fans, who will be obliged to follow German government self-isolation rules.

Germany declared the UK a ‘virus variant area of concern’ on May 23rd due to rising cases linked to the Delta variant in parts of the country. 

READ ALSO: Germany makes UK ‘virus variant area of concern’: How does it affect you?

This reclassification came just seven days after the UK was put back on Germany’s list at the lowest risk level, and barely a month after it was taken off all risk lists completely.

The ban was put in place despite the UK’s relatively low Covid rates as a precautionary measure.

A general ban on entry is in place for people coming from countries on the ‘virus variant’ list – such as India and Brazil – the highest of Germany’s risk categories. 

There are some exceptions for entering from these countries – for example German residents and citizens. However, anyone who does enter from Germany is required to submit a Covid-19 test before boarding the flight and must quarantine for 14 days on arrival, regardless of whether they are fully vaccinated or not.

READ ALSO: Germany’s new relaxed quarantine and testing rules after travel

Euro 2020 starts on Friday as Italy host Turkey in Rome with the Bavarian city hosting three group games as well as the last-eight match.

Around 14,000 fans will be allowed into the Allianz Arena for the fixtures.