Sharp rights turn

FIFA's favourite marketing company, ISL, is in trouble. Alan Tomlinson assesses the damage its demise may do to the world governing body and its leader.

Jean Marie Weber is a tall, imposing man with a mane of white hair. At most big world and European football tournaments and a number of Oly­mpic Games he’s been there, patrolling in the back­ground, making sure the big sponsors are secure in the swankiest hotels of the world’s glitziest cities. He looked pleased in the Paris convention hall in 1998 when Sepp Blatter strolled to election victory to take the FIFA presidency.

Weber is the boss of ISL (International Sport and Leisure), the Swiss-based company that ­gobbled up all the marketing rights on offer in the early and mid-1980s to most of the giant sports events that count – the World Cup, the European football cham­pionship, the world athletics championships, the Olympics.X

Weber’s company has been in panic recently. In April, ISL’s marketing boss Patrick Magyer was dumped, having been embroiled, it was alleged, in secret deals with FIFA. This was after a Swiss judge had granted ISL a reprieve of three months from ­creditors, during which time negotiations could take place for a ­pro­posed take-over by German media com­pany UFA.

Meanwhile, executive members in FIFA’s top ­committee were suggesting that FIFA should cut the ISL contract altogether, so that marketing rights could not fall into the hands of creditors. But FIFA’s president Sepp Blatter – groomed in sports marketing from the 1970s onwards, and the dealmaker for FIFA in its close relationship with ISL throughout the 1980s and the 1990s – was oblivious to these calls.

Blatter has had anything but a smooth ride since he got FIFA’s top job on the eve of France 98. But the potential collapse of ISL will provide him with his sternest test yet. In 1996 ISL, backed by Ger­man media conglomerate Kirch, won the TV rights to the 2002 and 2006 World Cup finals, with a bid worth £1.45 ­billion – a dramatically higher figure than for previous World Cups.

The US sports marketing guru Mark McCormack of IMG (International Management Group) also saw this potential, after the successful USA 94 World Cup. His was one of seven bids, and he pitched in with a £1.6 ­billion offer. The European Broadcasting Union also co-ordinated an international consortium’s bid of more than £700 million. Blatter, then general secretary, professed FIFA satisfied, “gratified by the interest shown in the World Cup by so many prominent com­panies”. Gratified or not, everybody soon knew the deal and some withdrew when it looked inevitable that ISL would get the nod. Some FIFA executive committee members opposed the deal, but not enough, and the cosy FIFA/ISL relation looked back in place.

But £1.45 billion is a lot of money to recoup, and has hiked up the price for every national broadcaster. Some, including the BBC and ITV, have refused to pay the vast sums now demanded by ISL and Kirch. Having fallen out of favour at the IOC, ISL looks to have been seriously over-reaching itself in paying FIFA such an amount. FIFA kept a right of veto over how the rights might be sold on, championing the fans of the world by claiming that this would guarantee that the World Cup remains “accessible to viewers who do not possess expensive satellite or cable sys­tems”. Guido Tognoni was FIFA’s top PR man for a decade. He now believes: “FIFA is living from one event which is the World Cup and this event is living from marketing and television rights.” Jeopardise the rights and the ­living is at risk.

ISL was set up in 1982, the brainchild of Horst ­Das­sler of Adidas, the man who more than any other single individual launched world sport into a lucrative phase of expansion, global marketing and escalating television deals. It looked invulnerable through the 1980s, but Dassler died in 1987 and some top recruits from ISL branched out on their own. Klaus Hempel and Jürgen Lenz formed TEAM (Television Event and Media Marketing), which put its own marketing concept in place with UEFA in the form of the Champions League. Some sports bodies began to see the benefits of keeping control of rights more directly in-house.

FIFA may be at least £13 million out of pocket from the ISL demise. Rather too late, it is putting in place its own internal marketing department. Blatter’s unswerving loyalty to the incestuous business networks of his homeland may have rebounded on him. FIFA’s motto is “For the good of the game”. The ISL and television rights debacle are likely to show again that much of FIFA’s business has been shoddily conducted, for the good of entrepreneurs and careerists, and the self-serving FIFA technocracy itself, rather than the people without whose passion and commitment FIFA’s product would be worthless.

From WSC 172 June 2001. What was happening this month