The governing body of international soccer is on increasingly shaky turf.
An ethics committee on Monday barred longtime FIFA President Joseph “Sepp” Blatter and Michel Platini, president of the Union of European Football Associations (UEFA), from the sport for eight years for ethics violations in connection with a $2 million payment that Blatter made to Platini in 2011.
Blatter, who headed FIFA for nearly 18 years, insisted the money was for consulting work Platini did for him between 1999 and 2002. But the committee found “no legal basis” for the payout and ruled the pair guilty of a conflict of interest. Blatter was fined 50,000 Swiss francs (about $50,600); Platini was fined 80,000 Swiss francs.
At a news conference, Blatter, 79, denied any wrongdoing. His adviser told reporters that Blatter would appeal the suspension. Platini, 60, once widely seen as a likely successor after Blatter retires in February, also intends to appeal.
The sanctions are just the latest in a string of high-profile embarrassments for FIFA (Fédération Internationale de Football Association) that began last May when the U.S. Department of Justice (DOJ) indicted nine FIFA officials and five corporate executives associated with the organization on 47 counts including racketeering, wire fraud, and money laundering for their alleged roles in a 24-year corruption scheme.
In September, Swiss authorities launched a criminal investigation into a sweetheart contract that Blatter signed and the $2 million payment to Platini. Earlier this month, U.S. officials indicted 16 more FIFA officials on charges of racketeering, conspiracy, and corruption, for a total of 41 people and entities charged thus far by the DOJ. Of those, 12 people and two companies have already been convicted.
Matt Andrews is an associate professor of public policy at the Center for International Development at Harvard University. He also co-leads Sports Complexity and Governance Indicators, a collaborative research project with the International Centre for Sport Security that studies governance and economic factors that influence the development of sports industries around the world, particularly soccer, known outside the United States as football. Andrews spoke with the Gazette about FIFA’s ongoing troubles and what it will take to clean up the organization overseeing the world’s most popular sport.
GAZETTE: How significant is it that football’s two top executives have been banned from the sport?
ANDREWS: It’s obviously significant, but at the same time I don’t think it’s the end of the story. I have heard lots of people praising the decisions to ban these gentlemen by referring to the saying, “The fish rots from its head.” Physiologically, however, the saying is incorrect. The fish rots from the gut. Our argument is that is exactly the problem with football. The game itself is in trouble. Probably 60 percent of the national associations across the world are bankrupt, engaging in a patronage network in which one finds many other worrying challenges, including corruption and money laundering and human trafficking. Many players also earn wages below the poverty line in clubs across the globe. These are the bigger issues that require attention, beyond banning two personalities.
As far as FIFA is concerned, there’s no way that Blatter and Platini could maintain their positions. There are too many problems and allegations for some not to be true or for the sport to be able to proceed without real action. But we should remember that Blatter got his position when his predecessor had the same kind of departure. The risk is that people pay too much attention to replacing these men, and they don’t pay enough attention to cleaning up the sport and making it viable in the future.
GAZETTE: Were you surprised at the ethics committee’s ruling?
ANDREWS: No. I think that both men seemed to have made mistakes in respect of the specific incidents for which they were charged. As soon as the committee actually made the charges, you knew that both of them were in trouble. The fact that the committee moved on this was a bigger issue because Blatter and Platini seemed to be quite bulletproof before the allegations were made. What I find interesting is that this transaction between the two men from years ago was revived for attention, which makes me think that somebody on the inside told somebody something to move these guys aside. It’s often the case with these big scandals.
GAZETTE: Does banning Blatter and Platini significantly clean up FIFA? What reforms can or should be instituted to sanitize the game?
ANDREWS: There is certainly an argument that if you get rid of people at the top — if that’s where the corruption is — then it helps you. But I think the corruption is throughout the organization, and indeed the sport. If you look at the list of people who are standing in the wings waiting to come up, these are all people who have long histories of working in and around FIFA, and there is no way they can be seen as immune from the mistakes of the past. It doesn’t really seem to me that it’s going to clean anything up by changing one or two personalities at the top.
FIFA is essentially meant to be an association that represents other associations. But it has really become a big private-sector organization that makes $1.5 billion a year and does not pay taxes. There are some huge conflicts of interests that emerge in making this money. The time has come to separate the business side of the organization from the sports representation side. And it is time to have more transparent and formalized ways in which money is raised and contracts and events are awarded, and in which members determine how the money gets spent, so that it doesn’t get determined by a few individuals at the top. A whole lot more accountability and transparency is required.
Football itself could also do with more transparency. Most of the regional confederations and over half of the 209 national associations don’t publish annual financial reports, for instance. There’s just a huge amount of opacity in the sport. I think that’s where they should begin to make improvements: Get the confederations to publish their financial statements, support players’ unions in holding these bodies accountable, and ensure we can all see what the money flows look like. This is anti-corruption 101.
GAZETTE: FIFA’s been accused of having a culture of patronage for many years. Why only now has there been an effort to meaningfully confront it? Was having a relative outsider like the U.S. Department of Justice the necessary catalyst?
ANDREWS: Absolutely. It may have been corrupt for a long time, but it’s only been making money for about a generation now. If you go back and have a look at our research, even in the 1980s, the 1990s, the World Cup wasn’t a huge moneymaker. The money in sports is new, within the last generation, so it’s taken people a bit of time to catch up to it and realize the problems that go with newfound wealth. I do think, though, that it took the U.S., it took the DOJ, to move on this. FIFA is based in Switzerland, and the Swiss are constrained in tackling these nonprofit organizations. Along with FIFA, they have the International Olympic Committee (IOC) — basically, every sporting body is sitting in Switzerland — and as soon as you start tackling issues in one or them, maybe you spook them all. FIFA also reserves the right to essentially ban countries and teams if they go against FIFA, so it’s going to be very interesting to see down the line what they do to the United States.
On previous occasions when countries have taken steps against FIFA or against national associations to say, for instance, that they didn’t pay their taxes or manage transfers correctly, FIFA has banned their national teams from international competition and said that it’s a global football issue rather than a national legal issue. So I think you needed a country that’s not completely in love with football (and willing to risk FIFA’s ire). With the U.S., there’s enough objectivity in the country where people are willing to take that step. But we need to remember the U.S. did not press against Blatter and against Platini. The cases that have been brought by the Department of Justice have actually not had anything to do with soccer, per se. They’ve had to do with money laundering and corruption using the U.S. financial system. I honestly think you really did need the U.S. to go forward with those cases. It probably is the only country in the world that is in a position to take those kinds of steps right now. Because for all the other countries, losing soccer would be a huge issue for them, but I think it’s a risk that could be taken here.
GAZETTE: Is there something endemic to major sporting bodies like FIFA, the IOC, or the NFL that encourages ethical lapses and/or corruption, or is it just because sports businesses are so rich and high-profile that we hear more often about these incidents?
ANDREWS: I think it’s a bit of both. I like to think of sports as a part of the entertainment sector. There is something about this kind of sector that is scandalous, and people love to read about scandal. But there’s also something about the industry being a little bit above the law. As with the entertainment industry, there is a lot going on that makes it vulnerable to wrongdoing as well. The money flows in in many different ways; you have a lot of people who are trying to make a quick buck; their careers are very short; there’s huge amounts of people around these players and these officials trying to make money; and I think there’s a bit of a culture of impunity that you find. It definitely is part of sport, unfortunately. And that’s what we’re looking at and trying to understand in our work — the culture behind this kind of sector.
GAZETTE: What role or responsibilities do local and national governments, clubs, and other organizations have in managing sports industries?
ANDREWS: It’s a very interesting question. Local and national governments have given football clubs and bodies a free ride for a long time. The clubs are part of their communities, and sometimes one feels that governments turn a blind eye to their behavior because of this. If you were just to apply some of the labor laws to football, for instance, you would find real cause for change; if you were to apply some of the common laws about financial transparency and financial reporting and tax compliance, you would also find clubs and organizations in trouble. Two of the biggest clubs in the world are Barcelona and Real Madrid. Both of those clubs are tax-exempt organizations just like FIFA. It’s quite incredible. They both have enjoyed significant support from governments, and both get to pay tens of millions for players, but they do not pay taxes even while Spain’s governments struggle under financial austerity.
One of the challenges for national and local governments is to treat these clubs more like other businesses, which means being selective as to when you support them, and making sure that when you support them, that they are generating the kind of social and economic value that you expect. I have no problem with local governments or national governments subsidizing a football club in the same way that they might subsidize a business that employs people. But when you are subsidizing them and then they are not paying taxes and they are not necessarily putting the money back into your community, I think that’s a big problem. Some of the laws we use to regulate the economy generally should be used more aggressively to regulate the organizations in this sector. Regulate them as if they are private organizations, including FIFA.
Beyond FIFA, however, one needs to ask tough questions about the future of football. There are 4,000 to 6,000 professional clubs globally. It’s very questionable as to whether the economics of football will allow them all to survive. Perhaps we will see some elite leagues dominating everyone else in the future, and most clubs reverting to amateur status as they were a generation ago. I think this is the way football is going, and it poses big questions for governments, clubs, and leagues. Until these questions are answered, I fear the unstructured nature of global football will continue to create opportunities for people to do things that we really don’t want them to be doing, kind of like the Wild West was before it was tamed.
This interview was lightly edited for clarity and length.