Coalitions, Commercialization and Corruption: João Havelange and The Transformation of FIFA

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Running head: Coalitions, Commercialization and Corruption 1

Coalitions, Commercialization and Corruption:

João Havelange and the Transformation of FIFA

Stephen C. Crawford, M.A. Candidate

Southeastern Louisiana University

Term paper submitted in partial fulfillment of the requirements for Comm 627. Ethical Issues in
Organizational Communication. Southeastern Louisiana University, Hammond, La. 26
November 2020. The student named as the author certifies that this is an original piece of
literature entirely written by the student that conforms to all class requirements and is free of
plagiarism.
Coalitions, Commercialization and Corruption 2

Abstract

FIFA is the worldwide governing body of organized football, also known as soccer. The latter

term is more common in North America, but both are often used interchangeably worldwide.

Following World War II, FIFA swelled with new member associations from developing

countries, primarily located within Africa and Asia. Brazilian Joáo Havelange, aspiring to

become the first non-European president of FIFA, was elected to the position in 1974 largely

aided by voting blocs composed of the new associations that had been marginalized due to their

own outsider origins. To fulfill campaign obligations, such as assurances that the World Cup

tournament would be expanded to include participants from the previously underrepresented

continents, Havelange would partner with sports marketing pioneer to trade valuable broadcast

and licensing rights in exchange for kickbacks that would fund the progress he had promised.

Havelange would become a soccer revolutionary, as his presidency would substantially increase

the visibility of the game and facilitate access for millions, but his legacy is characterized by

systematic corruption and unethical self-enrichment practices that have continued under

subsequent leadership. With no mechanisms for enforcing accountability there appears to be

little to dissuade FIFA’s leaders from taking part, so it is crucial that future leaders come forward

to promote a new approach to governance if the world’s game is to regain purity lost due to

FIFA’s corrupt culture.

Keywords: FIFA, football, soccer, World Cup, Joáo Havelange, Pelé, Horst Dassler,
Adidas, ISL, sports marketing, corruption.
Coalitions, Commercialization and Corruption 3

COALITIONS, COMMERCIALIZATION AND CORRUPTION:

JOÁO HAVELANGE AND THE TRANSFORMATION OF FIFA

Background

Federacion Internationale de Football Association, commonly known as FIFA, was formed in

1906 to establish standards for the game of soccer that would be enforced across boundaries and

has since grown to a size of more than 200 member associations from across the globe. FIFA

operates in four-year cycles that coincide with the World Cup, which is largely responsible for

generating revenue of around $5 billion in the most recent cycle. Bruce W. Bean (2016) of

Michigan State University’s College of Law, author of multiple works regarding FIFA,

emphasizes the remarkable fact that FIFA has virtually no responsibility to outside authority,

thus promoting a culture where officials regularly manipulate the game to serve their own

agendas. That FIFA is headquartered in Switzerland is no coincidence. Bean (2017) notes that

the Swiss government has long ignored scandals tied to FIFA, and its secretive banking laws

provide advantages to those with unethical motives (Bean, 2017). In her analysis of scandals in

the World Cup bidding process, Allison Cottle (2019) of the John Marshall Law School

identifies FIFA as marked by corruption. If the claim is true, FIFA’s Code of Ethics, which fills

more than 50 pages, is a curious piece of literature. The Code of Ethics (2019) preamble states

that the code exists “to protect the image of football, and especially that of FIFA, from jeopardy

or harm as a result of illegal, immoral or unethical methods and practices.” This appears to be a

statement from a proud organization determined to prevent corruption and unethical acts in the

name of fair play and respect, but FIFA is practically as famous for corruption as it is for

governing soccer.

Figure 1
Coalitions, Commercialization and Corruption 4

FIFA Budget, Revenue and Investments. 2015–2018

Standardizing the Game

Leaders from the French, Belgian, Danish, Dutch, Spanish, Swedish and Swiss football

associations signed the agreement to establish governance over associations that until then hadn’t

been required to abide by rules set forth by one another, including those to regulate laws of the

game, restrict players from simultaneously competing in different associations, and enforce

disciplinary across boundaries (FIFA, 2007). FIFA grew modestly for nearly a half century and

entered the postwar era governing 60 national associations, but that number would more than

double in just two decades (Gill et al., 2019). FIFA’s restructure was completed in 1966 with the

addition of its sixth confederation in Oceania, which joined confederations in Europe, the

Americas, Africa, and Asia. Still, it continued to operate in unremarkable form, conducting

business from out of home and with a small staff assisting leaders whose decisions were

becoming increasingly consequential (Gill et. al, 2019). Growth of the game would bring

substantial change, and FIFA would soon be transformed into a monolith with unchecked power

to sway outcomes and unilaterally punish non-compliance.

João Havelange’s Rise in Brazil


Coalitions, Commercialization and Corruption 5

Pelé, the Brazilian star often hailed as the game’s greatest player, described football as “the

beautiful game” in his 1977 autobiography. His influence was strong enough for the phrase to

soon be universally adopted. Pelé led Brazil to consecutive FIFA World Cup wins in 1958 and

1962, and again in 1970, elevating his status to that of a godlike figure, and his global appeal

would lead Sports Illustrated to proclaim him to be the world’s most famous athlete (Axthelm,

1966, p. 77). Pelé’s dominance throughout the 1960s would make his name synonymous with

the game of football, and his worldwide popularity would one day be converted into power for

João Havelange, president of Brazil’s sports confederation, to use in his pursuit of the FIFA

presidency as he would attempt to become its first non-European president.

Jean-Marie Faustin Goedefroid “João” Havelange may well have considered leading

Brazilian sports his destiny. Havelange competed twice for Brazil in the Olympic Games, first as

a swimmer in 1936 and later in 1952 in water polo. Transitioning from athlete to administrator,

Havelange began his career began with a pair of administrative stints for Sao Paulo based clubs,

first as treasurer for Botafogo, and later as director at Esperia. Success would propel him to the

presidency of Sao Paulo’s Swimming Association, where he would hone the skill of striking

questionable deals (Vonnard & Sbetti, 2018). Havelange used his growing influence to boost his

crony Silvio Pacheco into the Brazilian Sports Confederation, and the favor would be returned

when Pacheco promoted Havelange to become Brazil’s national director of water sports in 1954

(Vonnard & Sbetti, 2018). In just two more years he would be the confederation’s president after

a landslide election in which he won nearly 90 percent of the 177 votes that were cast (Vonnard

& Sbetti, 2018).

An Imperative for Success


Coalitions, Commercialization and Corruption 6

Havelange progressively reformed the national associations in a style that would reappear

years later in his global management of FIFA. He didn’t shy away from making deals to improve

the organization’s image, particularly those which offered funds that could be repaid on a

deferred basis. His presidency also benefitted from what could be described as the single-biggest

event in Brazil’s sporting history, as his tenure coincided with the rise of the dominant Pelé. The

1960s would be turbulent in Brazil after a coup d'état replaced the government with military rule,

but Havelange and his national team would benefit from a leader in need of high-profile victories

to increase support for his administration. Emílio Garrastazu Médici, Brazil’s fifth president

since the coup, led the country into the 1970s with a rapidly growing economy despite the

increasing authoritarianism under the military government. State University of New York at

Stony Brook professor of history Robert Levine (1979) noted Medici’s association with the

squad would grow increasingly closer. Any love of the game from Medici aside, it was almost

certainly an act of reputation management as Levine (1979) suggests the government had used

team’s popularity to its advantage since its first World Cup win in 1958. Aided by Medici’s

resources, Brazil won its third World Cup in 1970, arguably the most memorable of the team’s

five in the competition. Havelange was rewarded with additional capital to continue pursuing of

Brazilian greatness on the pitch, and essentially had free reign to make decisions for the benefit

of Brazil’s national team as well as his own. (Chaim, 2016).

FIFA’s Postwar Expansion

Decolonization following World War II created several nation-states that would remain

largely unaffiliated with the era’s major political influences, resulting in their being classified

into what would become known as the Third World. Christine Eisenberg of Berlin’s Humboldt

University (2005) noted that by participating in international competitions, these new countries
Coalitions, Commercialization and Corruption 7

would receive recognition of their existence and their independent status would be strengthened

as a result. The rapid increase in membership robbed Europeans control of the organization and

cleared a path for new leadership to emerge with the aid of coalitions made of the new members

(Eisenberg, 2005). Paul Darby of Ulster University in Northern Ireland (2003) believes FIFA

leadership quickly became uneasy with Havelange’s presence. President Sir Stanley Rous

refused to enforce the “one nation, one vote" principle that would likely shift a substantial

amount of power to new members from Africa and Asia. Seeing this, Havelange began to ponder

what it would take to establish himself as a viable candidate for the FIFA presidency in 1974.

Fellow South American leaders from Argentina and Uruguay lauding his work as the architect of

Brazil’s World Cup victories, kickstarting his candidacy and an effort to coopt support from

associations that Rous had marginalized (Darby, 2003).

Leveraging a Superstar

Pelé’s international retirement following Brazil’s 1970 victory did little to stifle the

excitement that surrounded him. Anibal Chaim (2016) of the University of Sao Paulo noted that

his worldwide presence didn’t diminish, and he remained the biggest name in world football.

Pelé became essential to Havelange’s strategy for winning the FIFA presidency. His association

with Pelé during this time is representative of his willingness to gain, or coerce, support from

those who could deliver it. Chaim (2016) argues that Havelange was quick to exploit Pelé s

financial need following a series of bad investments he made. With debt rapidly growing, Pelé

made a deal that would essentially make him a valuable PR tool for the campaign to utilize as it

accumulated the number of delegates necessary to form a winning coalition (Chaim, 2016)

Havelange wouldn’t accomplish this with money of his own. Instead, funds from the Brazilian

sports federation would be directed to cover Havelange’s obligation to Pelé.


Coalitions, Commercialization and Corruption 8

According to Chaim (2016), more than 40 of the delegates with voting rights would request

time with the star, and Havelange frequently arranged for Pelé to travel with his professional

club, Santos F.C., to create excitement among the delegates he needed to secure (Chaim, 2016).

Merely suggesting Pelé’s presence was powerful would be an understatement. A tale marked

with uncertainty, but corroborated by Santos (2019) nonetheless, claims that an exhibition

featuring Pelé that took place amidst Nigeria’s civil war led to a temporary cease fire to allow the

match to safely be played. Even if the legend could be disproved, the fact that it hasn’t

disappeared entirely over half a century later suggests Pelé’s ability to strengthen Havelange’s

bid.

In a strategy designed to gain support of the newer, smaller delegates, Havelange sought to

strengthen perceptions of his ability by hosting a World Cup-style tournament in Brazil as part of

a nationwide celebration (Chaim, 2016). While the tournament wasn’t sanctioned by FIFA,

Havelange strategically invited Rous to inspect his plans and offer advice, but as the competition

neared Havelange would receive a shock when many of soccer’s world powers withdrew from

the competition, reportedly due to technical problems (Chaim, 2016). The withdrawals were a

product of growing resentment of Havelange among Rous’s supporters, and Havelange offered

an indirect acknowledgement of the issue, simply stating that he understood his candidacy was

becoming troubling to many (Chaim, 2016). Their absences would be costly, however, as

Havelange’s tournament became what Chaim (2016) suggests was a de facto convention of

associations favoring Havelange. He spared no expense hosting the competition, primarily using

funds from the Brazilian sports federation. Havelange covered the cost of travel and lodging and

would provide countless artifacts, such as commemorative pins and posters, to mark the occasion

(Chaim, 2016). Even as the excesses became known, Havelange remained above censure,
Coalitions, Commercialization and Corruption 9

evidenced by the proclamation of an official that stated questionable acts that strengthened his

bid for the presidency were pardonable (Chaim, 2016). Havelange would soon be given an

opportunity to apply the same questionable methods on a bigger scale.

The 1974 Election

Following a lengthy campaign full of global travel to solidify relationships and secure votes,

Havelange defeated Rous at FIFA’s 1974 congress by a count of 68 – 52 and handed FIFA’s old

guard a stunning defeat. Darby (2003) argues that Rous and his supporters underestimated

the Brazilian’s campaign and the effect of his strategy to court the less influential associations.

Havelange's assurances to voters of a World Cup with an increased number of participants from

their confederations were effective, but the potential for the current divide to widen even further

was likely an equally powerful force (Darby, 2003). Perhaps Rous was sunk by his colonialist

bent that was rapidly growing unfashionable, specifically by only lightly punishing the South

African Football Association despite its systematic discrimination. Chris Bolsmann (2009) of

Aston University in England argues the “absurdity of apartheid football” was on display when

SAFA requested permission to field a non-white side in the 1966 World Cup qualifying stages

along with an additional request of the same for an all-white squad in 1970. Bolsmann (2009)

notes that the South Africans would later suffer a lengthy expulsion but the slow run up

reinforced beliefs among African associations regarding Rous’s priorities. Additionally, it would

be unwise to entirely discount anonymous claims that Havelange secured votes by placing

“small, brown envelopes into big, black hands (Phillips, 2011).” Regardless of why, it was clear

that the control of FIFA was slipping away from the formerly chosen few. The old guard would

be left to witness the transformation of world football.

A Culture Rich in Corruption


Coalitions, Commercialization and Corruption 10

Bean (2017) concedes that organizational corruption isn’t endemic to FIFA. Governing

bodies of all kinds are regularly entangled in scandals, and those without geographical

limitations are particularly susceptible (Bean, 2017). The International Olympic Committee

(IOC), for example, is rarely far from unethical practices concerning the financial and sporting

aspects of competitions it presumably regulates (Bean, 2017). Like FIFA, the IOC is

headquartered in Switzerland and operates with few worries of in the way of accountability.

Interestingly, Havelange was also a longtime IOC member and his decisions as its representative

would later be scrutinized as well (Reider-Gordon, 2014). Scandal is so prevalent that it often

passes with little notice, evident in Bean’s (2017) compilation of recent events that involve

politicians, international bankers, and automobile industry executive, to name a few. In most

cases, organizations and their offending members are presumably held at least somewhat

accountable for violations of ethics and trust. Because of that, Bean (2017) suggests a

structure that allows major offenses to pass with little worry is simply baffling.

Havelange wouldn’t waste time to developing strategies for accumulate the resources

necessary for fulfilling promises, the biggest being assurances that the World Cup would expand

to 24 teams from the 16-team format used since its inception (Gill et al., 2019). Even before

Havelange made soccer more visible than ever, the sport had long been the world’s most popular

(Giulaianotti & Robertson, 2004). However, it was presented far differently than the modern

product based on the inseparability of sports and marketing. Today’s broadcasts are saturated

with sponsorships and advertisements that have contributed to the sports industry’s global value

growing into the hundreds of millions (Manoli, 2018). At the outset of Havelange’s presidency,

however, sports commercialization was in its infancy. Havelange recognized the potential value

that could result a more intense relationship between FIFA, global sponsors and the fledgling
Coalitions, Commercialization and Corruption 11

sports marketing firms that would soon develop countless opportunities for FIFA to profit by

licensing of its properties (Gill et al., 2019). Along with Sepp Blatter, FIFA’s newly appointed

technical director, Havelange began building partnerships with some of the world’s most

recognizable brands, many of which remain in existence. A relationship with Adidas would be

among the most consequential, as the German shoe company’s leader was on the way to

becoming a sports marketing revolutionary. The alliance rapidly changed the marketing and

commercialization practices in the sporting industry, and FIFA would soon have a new look.

Horst Dassler and the Adidas Influence

Horst Dassler, without question, was a sports marketing pioneer. The son of Adidas founder

Adi Dassler, Horst’s influence transformed the popular shoe company into much more, as sports

equipment and apparel would account for half of Adidas’s sales by 1970 (Jones et al., 2016). In a

Harvard Business School case study, Jones et al. (2016) note that Adi Dassler initially resisted

the idea of an expansion beyond sneakers, but Horst’s vision was the driving force that cemented

the company’s place as an industry leader. The rising profile attracted new interests as German

clubs would begin turning to Adidas for uniforms, equipment and other training gear, and it

produced uniforms that would be worn by 80 percent of athletes at the 1972 Olympic Games.

British investigative reporter Andrew Jennings (2011) claims Dassler’s clout provided the means

to help “useful men” gain powerful positions from which they would reciprocate by presenting

countless opportunities for Horst to further elevate Adidas’s status (Jennings, 2011). With their

similar philosophies it’s not surprising a partnership would develop upon between the two, but

the underlying relationship between Havelange and Dassler that would be a powerful influence

on FIFA’s corrupt culture that presently still survives. The emerging alliance would indeed
Coalitions, Commercialization and Corruption 12

elevate football to new heights, and the disregard for ethical choices would drive the duo to use

their growing influence for personal gain.

Horst Dassler was supporter of Stanley Rous during his presidency. However, a meeting with

Havelange and a keen understanding of his strategy was apparently enough to convert Dassler, as

he was spotted applauding the as the election results were announced (Jones, et al., 2016).

Maybe Havelange attracted Dassler, or perhaps vice versa, but the budding partnership would

quickly provide the duo with substantial control over the governance and finances of world

football (Jones et al., 2016). Dassler recognized Havelange’s need of resources for fulfilling his

campaign promises, primarily to expand the World Cup and increase representation from the

African and Asian confederations (Jones et al., 2016). In what Jones et al. suggest was an

informal arrangement, Havelange agreed to apply his influence and the world soccer stage to

promote Adidas in exchange for the financial backing necessary for the realization of his World

Cup vision. Dassler agreed, but he understood that Adidas alone couldn’t supply the necessary

resources. Dassler began to look outside his own company, soon to make the acquaintance of

Patrick Nally, a partner in a small public relations firm that had begun to focus on sports

marketing.

West Nally, SMPI and ISL

Sponsorships had not been entirely nonexistent, but Garry Whannel (2009) of the University

of Bedfordshire argues that the 1970s ushered in the era of capitalist rationalization and

intensified the relationship between commercialization and sports. Growing television audiences

inspired a parade of new ideas, including strategies to develop effective marketing and

sponsorship opportunities (Philips & Whannel, 2013). Patrick Nally’s firm, West and Nally,

successfully convinced cigarette brand Benson & Hedges to sponsor an English cricket event,
Coalitions, Commercialization and Corruption 13

and the deal would lead to a longstanding presence of the brand at sporting events around the

country. The success inspired Dassler to eagerly join with Nally to create a new firm to focus

exclusively on sports marketing (Jones et al., 2016). Favorable tax laws led the duo to base the

firm in Monte Carlo, the basis for its name of Société Monégasque de Promotion Internationale

(SMPI).

Havelange, already a partner of West Nally, continued with SMPI to develop strategies for

elevating the World Cup, already among the most popular global events. FIFA’s first

monumental campaign was a partnership with Coca-Cola. The soft drink giant’s distinctive

brand would be prominent in FIFA’s global football development program, and Coca-Cola

would provide access that allowed FIFA to utilize its well-developed marketing infrastructure to

streamline the distribution process (Gill et al., 2019). Coca-Cola would expand its role by

becoming the venue sponsor for the 1977 World Youth Championship, at which its red and white

logo consumed the fences that surrounded playing fields. However, Jones et. al (2016) points to

the 1978 World Cup as the ultimate target. By the time the 1978 arrived, SMPI was an

experienced buyer and seller of FIFA sponsorship and broadcasting rights, proven by another

escalation of its partnership with Coca-Cola that produced an $8 million sponsorship agreement

(Jones et al., 2016). The successful partnership with Coca-Cola reinforced Nally’s belief that

SMPI was a growing force in the young industry, as Jones et al. (2016) quotes his claim that

“anyone convincing Coke to do something is on their way, because anything Coca-Cola does has

to be a success.”

The partnership was a “big bang” that created a new world of inseparable partners and began

marketing practices so common in modern sports. On-screen graphics, sideline and scoreboard

advertisements and even uniforms of teams from around the world are marked with the logos of
Coalitions, Commercialization and Corruption 14

corporate sponsors that are so common they are often easy to overlook. These strategies are

offshoots of approaches pioneered by SMPI more than a generation ago. Selling the rights for

brands to become “official FIFA partners” for virtually any product would prove to be lucrative,

as Jones et al. (2016) notes that the 1982 World Cup was flooded with sponsorships from food

and drink brands, tobacco companies and countless other products marketed “FIFA preferred”

products. Havelange and Dassler were not only reaching their goal of increasing the

commercialization of the game and increasing its popularity, but the pair were enjoying personal

benefits as well.

Havelange and Dassler were also developing greater capacities to influence those who might

obstruct their plans. As the 1978 World Cup concluded, the era of 16 teams was also scheduled

to end. Havelange focused his attention on the next edition scheduled for 1982 in Spain, but the

host country became uneasy with the prospect of paying the costs associated with eight

additional squads and their entourages (Jones et al., 2016). To resolve the issue that jeopardized

his plan for expansion and imperiled his ability to fulfill campaign promises made a decade

earlier, Havelange turned to Dassler and SMPI for financial aid. A $23 million payment to defray

the added costs was made to Spanish officials, though the payment wouldn’t suffice on its own

and Havelange would again seek out a partner for an exchange of influence, finding it in Juan

Antonio Samaranch, a Spanish sporting official with whom he was familiar with as an IOC

member (Jones et al., 2016). Samaranch successfully sold the Spanish government on the plan

and Havelange reciprocated by quietly working to create a voting bloc that would supply the

votes necessary for Samaranch to win the IOC presidency in its impending election (Schudel,

2016).
Coalitions, Commercialization and Corruption 15

The Havelange and SMPI partnership continued to pay dividends, but Nally became

increasingly uneasy with what his role become and how far he had strayed from his original

goals. Nally contended it was FIFA and Dassler that were the real winners, but his growing

concern was the firm’s disregard of its supposed responsibilities, leaving him questioning

whether his duty was to SMPI’s clients or to the interests of Dassler (Jones et al., 2016). The

conflict would lead to his departure from SMPI, which was absorbed into Dassler’s newest

venture, International Sports and Leisure Marketing (ISL), for continuing pursuits in sports

marketing. In the years following their uncertain beginning, Havelange and Dassler had

transformed nearly every aspect of world football aside from the game itself, and Havelange

didn’t shy away from praising Dassler for his efforts that were crucial to FIFA’s wild success.

Jones et al. (2016) share accounts of Dassler being referred to as the “boss of sport” by one

commentator and a “puppet master” by another. His influence had been so impactful to FIFA

that Havelange would make claims to suggest it was Coca-Cola and not FIFA that was the

greatest beneficiary from their partnership, in contrast to FIFA’s having once piggybacked onto

Coke’s global network to expand its own reach. (Sugden & Tomlinson, 1998). Havelange’s

strategic partnerships that repeatedly flouted ethical practices had produced growth likely in

excess of what he had envisioned, but Bean (2019) argues the progress didn't come cheap, as

Havelange had essentially been “bought and paid for” by Dassler, a claim that would suggest

puppet master to be an appropriate moniker.

Trouble with Pelé

Havelange would continue his relentless efforts to further grow FIFA, and he would rarely

encounter resistance. In what would be a crowning achievement of his presidency, Havelange’s

influence directed the 1994 World Cup to be rewarded to the United States, arguably the most
Coalitions, Commercialization and Corruption 16

valuable markets. The event would be a breakthrough for soccer in the United States, with record

attendance from full venues across the country (U.S. Soccer, n.d.). The record-breaking World

Cup would also be the impetus for the establishment of the U.S. based professional league,

Major League Soccer (MLS), which has flourished in the decades since (Miller, 2019). The

event wouldn’t be without issue, however, as Havelange would be scrutinized for publicly

banning Pelé, once a powerful ally, from participating in events associated with the tournament

(Goldstein, 2016).

The banning was in response to Pelé’s allegations that the president of Brazil’s sports

federation and Havelange’s son in law, Ricardo Teixeira, refused to grant broadcast rights for the

Brazilian championships to a group that included Pelé after it refused to pay a $1 million bribe

(Pendleton, 2005). The winning bid was for an amount of $1 million less than what was offered

by Pelé’s group, and the Havelange reportedly offered support for the winning bid (Pendleton,

2005). Perhaps for decades Pele harbored resentment toward Havelange for the exhaustive use of

his star power, and Havelange may have never recovered from Pelé’s refusal to unretire and

rejoin his national team. Regardless, the relationship that was once so productive had decayed,

and Havelange would not hide his paternalistic contempt, painting Pelé as an ungrateful recipient

of the opportunities he had been given, and he would make intention to guard the interests of

those closest to him at any cost (Pendleton, 2005) Removing Pelé from World Cup events robbed

the United States of what may have been the only recognizable soccer player to most Americans,

as the game had never been among the nation’s most popular sports. Banning Pelé was of little

consequence, as the record-breaking numbers imply, but the decision to block the superstar from

participating in an event of such importance suggests Havelange was making his decisions in the
Coalitions, Commercialization and Corruption 17

absence of fear. Instead of remorse for years of control over the star, Havelange was apparently

comfortable reinforcing his grip.

The feud wouldn’t end with the 1994 World Cup. Pelé would become Brazil’s minister of

sports, and he would prioritize ending the corruption he feared would destroy the beloved game

(Pendleton, 2005). He introduced a bill designed to loosen restrictions and increase opportunities

for player free agency. Additionally, it would mandate that disputes be independently reviewed

and establish independent oversight of officials, both of which would decrease the sports

federation’s control over football in the Brazil (Associated Press, 1997). Havelange asserted

FIFA’s supremacy by stating that referees and tribunals are subordinate to national associations

(“Brazil Face World Cup Axe”, 1997). Havelange’s powerful influence on Brazilian sports, and

the persistent conflict between Pelé and Teixeira,

implies the decision was personal. Pelé’s pursuit of regulations continued, however, as the star

would refer to Havelange as “arrogant dictator” intent on controlling the game in Brazil

(Associated Press, 1997). Havelange responded with by threatening the unthinkable, warning of

the possibility of Brazil’s expulsion from the upcoming World Cup if the association continued

in defiance of FIFA (“Brazil Face World Cup Axe”, 1997). The pursuit of independent oversight

continued despite the warnings, and what had become known as the Pelé Law would ultimately

pass, but only after changes had substantially weakened its effect (Pendleton, 2005). The changes

were almost certainly influenced by Havelange, leading Pelé to request his name be removed

from legislation that barely resembled its original design (Pendleton, 2005).

Passing the Torch

After serving as president for more than two decades, João Havelange stated that 1998 would

be his final year leading FIFA. Joseph “Sepp” Blatter of Switzerland, FIFA’s secretary general
Coalitions, Commercialization and Corruption 18

since 1981, was elected as his successor amidst controversy befitting a close associate of

Havelange. The losing candidate, Sweden’s Lennart Johannsson, claimed that small brown

envelopes were handed out as FIFA officials convened for the election, similarly to those

reportedly present with Havelange in 1974 (O’Connor, 2011). There is still little reason to

quickly dismiss claims that Blatter’s election was tainted by corruption. His presidency would be

characterized by a disregard for ethics, perhaps unsurprisingly considering his relationship with

Havelange, who remained a force as an honorary president. Blatter’s tenure would see corruption

escalate within FIFA, as the threat of exclusion from international competition would silence

association leaders who might otherwise be compelled to speak out against corruption. And

while Blatter’s decisions may have been his own, the ease in which he operated unethically was

a product of his predecessor’s work.

International Law expert Basil Ugochukwu (2016) of the Centre for International

Governance Innovation argues that FIFA’s uncompromising enforcement of its non-interference

policy allowed its corruption to spread “like a virus” across the globe. Late in Havelange’s

presidency, FIFA began actively pursuing associations violating the non-interference principle,

which demands that member associations operate without outside interference, including that

which might be imposed by their governments (Hylton, 2017). Presumably the intent is to protect

associations from meddling governments and officials with questionable motives of their own to

ensure the game remains pure. Blatter, however, would instead tie compliance with the policy to

the financial implications and prestige that accompany a national association’s participation in

the World Cup and other major tournaments controlled by FIFA.

According to J. Gordon Hylton (2017), professor of law and history at the University of

Virginia, the potential punishment for defiance is too powerful to ignore. Hylton (2017) notes
Coalitions, Commercialization and Corruption 19

that yearly distributions from FIFA are essentially the primary revenue source for some smaller

associations and the loss would be difficult to overcome. Suspension would also disqualify an

association from all international competition sanctioned by FIFA, including the World Cup,

which would be universally devastating. Along with the prospect of financial losses resulting

from a suspension, the impact to fans who robbed of the opportunity to see their nation

represented in FIFA competitions would be pronounced. Governments apparently recognize the

potential fallout, as Hylton (2017) suggests that for some nations this presents too much risk. It is

possible, according to Hylton (2017) for non-interference to be the force that silences a

government or the officials who preside over national sports from exposing corruption by FIFA

officials, thus allowing the practices to continue with ease. The policy may have once served to

prevent corruption from within an association, but Blatter’s coercive application made the non-

interference policy a tool to diminish or eliminate the possibility of corruption being exposed.

ISL’s Collapse

By the late 1990s, ISL was no longer the lone dominant force in sports marketing. Arguably,

ISL was a victim of its own success, as the pioneering firm was likely a source of inspiration for

many who were competing for their own share of what had become a massive industry (Staun,

2006). More than a decade after Horst Dassler’s 1987 death, ISL wasn’t yet in decline, but

having recently lost marketing rights for the Olympic Games, an aggressive strategy was needed

to keep pace with competitors. ISL was indeed aggressive as it claimed the rights to the

Association of Tennis Professionals (ATP) in a deal worth more than $1 billion over 10 years

(Staun, 2006). The company would spiral downward as it became apparent it would fall far short

of expectations, leaving it incapable of meeting its obligations. ISL attempted to negotiate a

buyout offer, but it wouldn’t materialize as it became apparent that the company lacked
Coalitions, Commercialization and Corruption 20

resources for that as well. A bailout wouldn’t materialize after records were presented to

potential investors who quickly walked away, forcing ISL into bankruptcy in May 2001 (Staun,

2006). “Amidst this wreckage,” said BBC sports editor David Bond (2013), is where

investigators would find evidence suggesting FIFA officials had been paid hefty sums for

favorable treatment in the awarding of rights to the World Cup.

Fallout

More than a decade would pass before any substantial information from the investigation that

followed the ISL collapse was made public. Despite efforts to suppress its release, the Swiss

Supreme Court ordered the publication of the dossier containing its findings. Havelange, along

with Teixeira, negotiated to end criminal investigation of their relationships with ISL (Blitz,

2012). The Swiss report, released in July 2012, harshly judged FIFA’s culture by declaring it was

defined by acts of corruption and categorizing its practices as “deficient,” even prior to the ISL

collapse. It asserted that there was no question that FIFA, particularly Sepp Blatter, had direct

knowledge of bribery payments that were distributed throughout the organization (Blitz, 2012).

Nearly $22 million in total was reportedly transferred into accounts linked to Havelange and

Teixeira, and the report contained testimony from a witness claiming a $1 million payment

intended for Havelange was once mistakenly deposited into a FIFA account, suggesting

corruption was so commonplace that the need for discretion had lost urgency (Dunbar, 2012).

FIFA, Havelange and Teixeira would repay a combined $6.1 million, with $500,000 coming

from Havelange. The payments were made with the condition of anonymity, and the $2.5 million

from FIFA was provided with assurances that legal proceedings against Havelange would be

dropped (Dunbar, 2012). The legal action against Havelange would end but his identity and role

in the scandal would be leaked, leaving an indelible mark on his legacy. Havelange would soon
Coalitions, Commercialization and Corruption 21

resign as honorary president of FIFA, and nearly 40 years following the election that started a

revolution in the organization and in how the world’s game was marketed, Havelange’s

relationship with FIFA would end unceremoniously.

Analysis

More than 30 years would pass between João Havelange’s election as FIFA president of the

organization’s establishment of its own ethics committee. Policies put forth in the FIFA ethics

code forbid virtually every tactic Havelange used to win the presidency and to maintain the

position in the following decades. Havelange was a master at exploiting gray area to establish an

advantage, a practice supposedly regulated by the code. It is intriguing, then, that FIFA would

be involved with the attempt to suppress the dossier’s release. This only reinforces opinions

based on a belief that the ethics committee is at least partially inspired by PR. It would be nearly

a year later before FIFA released its own ISL report, gently assessing the scandal in a way that

Bond (2013) argues is little more than an attempt to appear transparent. Hans-Joachim Eckert

(2013), chairman of the committee’s adjudicatory chamber, penned an opinion supporting

virtually every claim from in the Swiss dossier, and he expressed contempt for acts he called

“morally and ethically reproachable.” Curious, however, was the apparent lack of intrigue that

closed off the possibility of exploring additional paths that might have appeared through further

analysis of the ISL case.

Eckert concluded the investigation of the case primarily on the basis that ethical guidelines

for FIFA officials simply did not exist at the time of the violations. The report did not deny the

corruption, but Eckert (2013) concluded that corrupt acts that occur outside of a mandate for

ethical standards are beyond the committee’s reach (Eckert, 2013). Eckert’s (2013) “ethical

standards” could potentially uncover countless violations that stemmed from ISL and continued
Coalitions, Commercialization and Corruption 22

after policies were set. Without knowledge of the committee’s decision-making process, the

conclusion that offers little more than an affirmation of the parameters for actionable violations

is baffling. Bond (2013) argues that an independent investigation would likely reveal much

more, which would indeed support the claim that Eckert’s report was little more than “window

dressing.”

An ethics committee created to implement and enforce guidelines is unquestionably a good

idea. In the case of João Havelange, however, a code and a committee not assuredly objective

may have been of little consequence had they been in place during his tenure. Disregarding

ethical principles by exploiting undefined gray area, particularly from a leader in such an

influential position, suggests the possibility of a predisposition to engage in such antisocial

behaviors. Solutions to practices that were standard for Havelange are more likely to be found

through the difficult process of changing an ingrained culture, and through mechanisms that

allow some authority to break through the existing barriers to enforce compliance.

Incongruent Cultures

Only the most jaded individuals would immediately refuse to believe that positive group

behavior and a common goal to eliminate corruption could be at least somewhat effective. Even

if so, its effectiveness would most likely be inversely proportional to its size, making success

highly improbable for an organization with FIFA’s level of membership. Still, size isn’t the

biggest obstacle in this approach, since a common goal can only be reached after one has been

identified and agreed upon. FIFA consists of members from countless cultures that follow

uneven standards. Jake E. Streubing (2019), assessing international corruption in organizations

for the New Criminal Law Review, argues that legal and normative definitions for corruption are

often vastly different. As a result, creating a standard for ethical behavior is its own problem for
Coalitions, Commercialization and Corruption 23

multinational organizations with markedly different members. Streubing (2018) notes that an

inability to formally classify corrupt acts as illegal and the lack of a unified system to prosecute

are among the primary factors that make the problem so unwieldy. Entirely abandoning self-

regulation could be counterproductive, since it essentially acknowledges incompetence, but

organizations with no oversight likely continue to attract and harbor individuals inclined to act

with disregard for ethical principles.

If solutions that rely on individual accountability are ineffective at preventing unethical

behavior in organizations, it still should not be accepted that most members are self-serving and

without moral compasses. A closer look at an organization’s makeup may be useful.

Organizations consisting of members from countless different countries and cultures as FIFA is

risk fracturing, or never uniting, if a central force to do so isn’t present. This could lead

individuals or smaller groups to lose focus on the organization as a whole and instead look to

meet their own needs. Conversely, a charismatic leader might emerge under the guise of unity,

only to abuse their power through graft and deceit. Perhaps elements for a winning strategy can

be found in additional measures of accountability instead of that which focuses on the individual.

Mechanisms of Accountability

Roger Pielke, Jr. (2012) of the University of Colorado researched strategies to address

corruption in FIFA for Sport Management Review and concluded that there isn’t an easy fix,

especially when accounting for its lack of accountability. Pielke (2012) references a series of

mechanisms for accountability identified by political scientists Ruth Grant and Robert Keohane

(2005, p. 35). Grant and Keohane (2005) define accountability as the right to hold others to a set

of standards and the right to issue penalties if standards aren’t met. The hierarchal, supervisory,

fiscal, legal, market and peer accountabilities Grant and Keohane (2005) use to evaluate global
Coalitions, Commercialization and Corruption 24

are valuable in a study of FIFA as well, considering its global influence likely exceeds that of

many of its member associations. Three of these accountability mechanisms stand out for their

potential value.

Total fiscal accountability would likely solve the bulk of FIFA’s problems rooted in

corruption. A substantial portion of FIFA’s budget is distributed for the vague purpose of

development, and Transparency International (2015) study found a remarkable percentage of

financial distributions from FIFA goes unreported by the associations to whom they are issued.

Consider the possibilities if there had been a requirement for fiscal accountability in FIFA over

the last 50 years. As president, João Havelange absolutely added value to the world of soccer by

acting to develop youth programs and to create a Women’s World Cup, for example.

But the beautiful game presumably belongs to the world and not Havelange, so it’s reasonable

that the world would prefer the leader of the sport to be held to a certain standard. Growth may

not have occurred as rapidly and the outcomes might be a bit different, but the world’s most

popular sport would certainly grow organically. Fiscal accountability would provide the respect

and purity FIFA will likely never reach regardless of what measures its leaders take.

The Havelange era made commercialization and soccer an inseparable pair. The emergent

sports marketing industry drove FIFA’s expansion of the World Cup and other major

tournaments. This is no doubt a positive for fans as more nations compete in matches that can be

viewed from almost anywhere. The privilege comes at a cost, however. The power once held by

Havelange and ISL once is another factor that drains the game of the purity that presumably lies

at the heart of fair competition. Organizations that allow leaders to exchange money for

influence invite suspicion. While Havelange apparently wasn’t involved in match-fixing, it does

exist, and it is financially motivated (Kordas, 2016). To maintain trust, sponsors should be
Coalitions, Commercialization and Corruption 25

accountable as well by opting not to advertise if it appears leaders aren’t acting in the sport’s best

interest. Just as the game’s growth might be slowed by mechanisms for accountability, ethical

choices may lessen financial gains for sponsors that opt out. Sponsors that choose to not

participate when corruption is present have the potential to change the way an organization

operates, and just one needs to act with courage and take the first step.

Legal accountability would presumably fill any void left by mechanisms for fiscal and

market accountability, and the specter of legal action would likely diminish levels of corruption

in FIFA. It is no coincidence that FIFA, and countless other organizations from around the

world, has long been headquartered in Switzerland. Famous for banking laws that have

traditionally provided full cover, Switzerland has been a regular venue for tax evasion, money

laundering and other financial crimes. The country recently implemented its first measures

designed to end practices it had long facilitated to conform to Federal Tax Administration

standards (Shields, 2018). This may shed light on FIFA’s finances, which could lead to less

corruption, but this is only the product of one nation’s policies. Legal accountability would

prevent questionable circumstances such as those that surround the 2022 World Cup to be hosted

by Qatar. The Qatari event reeks of “business as usual,” considering the tournament will take

place in country of considerable wealth but little history with the sport. Additionally, Qatar’s

climate will force the event to be moved to November and December, disrupting countless

professional football clubs. More damaging, however, is repeated ignoring of calls for the

tournament to be moved from Qatar, as the country’s preparation has resulted in forced labor and

an abnormally high death rate among migrant workers (DiCenso, 2017). Refusing to end self-

serving agreements might violate ethical principles but permitting the World Cup to be held

where such practices are permitted is morally bankrupt.


Coalitions, Commercialization and Corruption 26

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Coalitions, Commercialization and Corruption 28

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Coalitions, Commercialization and Corruption 30

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Coalitions, Commercialization and Corruption 31

following Havelange’s death, is another repository for good and bad milestones from the
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Whannel, G. (2009, September). Television and the Transformation of Sport. The Annals of The
American Academy of Political and Social Science https://doi.org/10.1177%2F00027
16209339144. Whannel’s study of television’s effect on sports points to the early 1970s
as the beginning of the era that would eventually see capitalist rationalization dominate
virtually all aspects of the industry. PROF: Scientific journal.
Coalitions, Commercialization and Corruption 32

Appendix A

Stephen Crawford, Comm 627


3rd Summary, 27 November 2020

Reference: OxfordUnion. (2013, October 30). The Qatar World Cup: Sepp Blatter
[Video]. YouTube. https://www.youtube.com/watch?v=iwgW7zxWfw8
Overview: This YouTube video features an interview of FIFA’s then-president Sepp
Blatter by the Oxford Union Society of the University of Oxford in England. Blatter succeeded
Joao Havelange as president of FIFA, and his tenure would build on the corrupt culture
normalized by his predecessor. From the moment it was announced in 2010, the Qatar World
Cup has been the subject of harsh criticism for several reasons, most notably the conditions that
have led to a high number of deaths in construction projects readying the country to host the
event. When asked if FIFA bears any responsibility, Blatter first asserts that FIFA isn't
responsible for the world, then awkwardly references another controversy out of his control, but
instead of worker deaths it is about a questionable goal in the German Bundesliga and appears
insensitive as a result. A leader in such an influential position would seemingly be more tactful,
but Blatter continues by callously defending the number of deaths by comparing it with the
number of workers who haven’t died and suggests not every death has occurred specifically
during the construction of the stadiums that will be used in the tournament. Like a politician,
Blatter states that there are conditions to hosting a World Cup, but he equivocates with the claim
that FIFA can’t interfere with a country’s principles.
Concept: FIFA’s leaders have long been suspected of being corrupt, and while the World
Cup is awarded through a voting process, the host country is typically the subject of heavy
scrutiny. Qatar being awarded the tournament is questionable, as several issues that would
presumably best be avoided have been present since it was announced.
Portrayal: The interviewer is clear with his question regarding the controversial matter
that wasn’t a new revelation at the time, which makes Blatter’s uncomfortable reaction stand out.
Discussion: An understanding of FIFA’s history is necessary for the gravity of this video
to be fully felt. Notorious for exchanging money for favors and influence, corruption in FIFA has
never been tied to something as dire as the conditions for workers in Qatar. Unwilling or unable
to answer clearly, Blatter repulses with uncomfortable attempts at levity in a manner that
suggests his reality is likely much different from what most of the world experiences. The casual
discussion of the dire situation is not characteristic of a leader focused on solving the matter.
Blatter’s disregard for the wellbeing of workers constructing his event is apparent in his attempts
to avoid the subject, and by his barely breaking the surface with a series of vague answers.
Although this interview took place in 2013, the same questions still exist. The world can only
hope that the Qatar event is just an anomaly and not one that establishes a precedent.
Coalitions, Commercialization and Corruption 33

Appendix B

Stephen Crawford
Comm 627 – 3rd Case Study
26 November 2020

CASE STUDY 8.3


TO LOAN OR NOT TO LOAN?

1. Should Harry Edwards recommend that the bank loan another $150,000 to Highway Market?
Why or why not? Edwards may be inclined to recommend an additional loan to his longtime
customers who, until now, have consistently met their obligation to the bank. In this case,
however, recommending the Smiths for the loan is the wrong decision. By optimistically
assuming the Highway Market will recover from its current downturn would be disregarding
several warning signs, most notably the Walmart store set to open just down the road. The
market might be the only store in town, but it simply won’t be able to compete with the
superstore’s prices, which would be nearly impossible even without the debt the Smiths will owe
when the remodel is complete. Perhaps more concerning is the Smiths’ inability to see the
problem for themselves, as they are instead prepared to add a substantial amount of debt to what
they currently owe. It is likely that the Smiths do believe in their ability to recover and thrive,
since operating the business has been so prominent in their lives, but this is the primary reason
Edwards should courageously make the ethical decision and recommend against the loan. Both
Edwards and the Smiths are faced with the dilemma of escalating commitment in this case, as it
would seem logical for Edwards to base his decision on his history with the Smiths instead of
looking at directly at the problem and accepting the facts as they are. Recommending against the
loan is the most ethical decision Edwards can make for himself, the bank and the Smiths.

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