Why The Fifa Fiasco? and/vs Formula One
(the first three capital letters of the title are telling, and intentional)
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The Fifa Fiasco is still developing, and we’ll see if Gianni Infantino will lose his job. And the whole thing looks and feels - and smells - what happened with Formula One, successfully, a decade ago. So why the same move worked for F1 but backfired so violently for FIFA? By and large, the answer resides squarely within a single aspect: Brand.
FORMULA ONE
Nicknamed ‘F1 Supremo’, Bernie Ecclestone was a son of a trawler captain who built one of the U.K.’s largest used car dealerships and then in 1971 bought the Brabham racing team, and raced himself. Over two decades, he took Formula One from a niche racing competition to a global enterprise. Then, having gained control of F1’s commercial rights, he consolidated it all into the Formula One Management Company, whose majority shareholder was private equity firm CVC Capital Partners in which he had a 5.3% equity stake. Then, in 2016 US billionaire John Malone’s Liberty Media bought FOM for $8 billion, with the plan to exploit social media, greatly expand all digital rights, and expand in North America. Ecclestone cashed in, was given the CEO role, but was then removed a year later.
FIFA
July 22: FIFA President Gianni Infantino announces a plan to create a $20 billion commercial subsidiary - FIFA Forward Enterprise (FFE), to run The World Cup and Club World Cup and raise more than $4 billion with private investors (including Trump son in law’s Kushner family and Greg Maffei - former CEO of Liberty Media). And FIFA’s 211 nation member’s federations were promised a great deal of money. Within hours, the football world revolted - with the European Federation (UEFA) threatening to boycott the next World Cup, other federations chiming in similarly, and multiple FIFA executives denouncing both the spirit of the move as well as the secrecy with which Infantino planned it.
July 25: Infantino scraps the plan entirely, and may end up losing his job.
(and it is to note than in 2014 Infantino tried a couple of moves of the kind: he was rebuffed then as well - guess he didn’t learn from those experiences).
FIFA and F1: THE DIFFERENCES
We said above that the answer resides squarely with ‘Brand’. Let’s expand on it.
The reality in Branding is that you never own your own Brand: your constituencies do, and they define it for themselves in their mind. In fact, UEFA said so crisply and beautifully:
“Football is not FIFA’s to sell, the fans own Football”.
Mr Infantino brazenly and crassly ignored this fact, thinking that the F1 approach would work just fine with Football as well.
But F1 (highest level of racing) is a radically different brand than FIFA (highest level of football), a difference that he either didn’t understand, appreciate, respect, or - in my opinion - just ignored, counting on the fact that the enormous amount of Money at stake would be too irresistible to all. He thought he could bypass the differences, not as global sport organizations, but as activities and as Brands - particularly in three key aspects:
Emotion: your Football fandom attaches to your nationality; but you can be Japanese and root for McLaren (and yeah, everyone is a Ferrari fan). As such, there’s virtually no emotional distance between a fan(-atic) and Football, it’s as visceral as it gets; conversely, there is an emotional/limited distance between a fan and F1 racing.
Frequency: F1 Racing is part of your life 24 Sunday afternoons a year; Football is part of your everyday life - it literally is / can be part of it.
Pervasiveness: you can never practice F1 Racing and your involvement is limited to watching it, a passive audience as you’ll ever have; Football is something you and your kids can do on a flat surface of every kind, and have done throughout your entire lives.
The cardinal sin here was ignoring what the sports means and is to people’s lives, at every level - geographic, socioeconomic, cultural. And what’s most galling is that business executives, whether in sports or in the corporate world, too often step on their business pulpit (yes, I’m looking at you too Cracker Barrel) and tout the power of their Brand with their employees and in the press and quarterly reports and analysts’ calls but then their corporate actions don’t follow suit. Talk is cheap, indeed, and the epitome of corporate arrogance is seeing and treating Brand solely as a balance sheet item, a shameful lack of understanding of and respect for what Brand is and means.
That ‘power of the Brand’ you tout? It’s gifted to you by your constituencies, and they can take that privilege away at any time and as they wish.
Q