By Sara Germano
The sweeping U.S. crackdown on alleged corruption at FIFA
appears to have snagged Nike Inc. in its net.
Among the details in the Justice Department's 161-page
indictment are allegations of bribery involving efforts by "a
multinational sportswear company headquartered in the United
States" to win an apparel licensing deal with Brazil's national
soccer team.
Nike isn't named in the indictment, which refers to the party as
"Sportswear Company A." But according to Nike's website, the
company signed a sponsorship deal with Brazilian national soccer
federation CBF in 1996, the same year in which the events described
in the indictment take place.
Nike wouldn't comment specifically on the issues raised in the
indictment but said it is concerned by the allegations and is
cooperating with the investigation.
"Nike believes in ethical and fair play in both business and
sport and strongly opposes any form of manipulation or bribery,"
the company said in an emailed statement. "We have been
cooperating, and will continue to cooperate, with the
authorities."
According to the indictment, Sportswear Company A in 1996 signed
a 10-year, $160 million agreement to become a co-sponsor of the CBF
and its "exclusive footwear, apparel, accessories, and equipment
supplier." Three days later, the indictment alleges, an official
from the sportswear company signed a one-page agreement with a
representative of a sports marketing agency called Traffic Brazil
allowing the agency to invoice the company for additional marketing
fees.
A Traffic affiliate proceeded to invoice Sportswear Company A
for an additional $30 million in payments between 1996 and 1999,
payments that were used in part for bribes and kickbacks, according
to the indictment.
Nike didn't respond to repeated requests for comment on the
specifics of the indictment Wednesday. None of the named defendants
was identified as having ties to a sportswear company.
The Beaverton, Ore., company made its name selling running shoes
and its fortune with basketball shoes like Air Jordan. But over the
past 20 years, it has plowed money into soccer in an effort to win
fans and sales abroad. The effort has involved signing outfitting
deals with national soccer federations including those of England,
France, the Netherlands and the U.S., as well as some of the
world's top players, including Cristiano Ronaldo and Neymar.
The relationship with Brazil, one of the top countries in the
game, played a big role in the strategy. On the company's website,
Nike co-founder Phil Knight is quoted as saying, "We will only
truly understand football when we see the game through the eyes of
Brasilians."
Part of the strategy behind Nike's acceleration into soccer has
been to better compete overseas with chief rival Adidas AG.
Executives at the German sportswear maker have often described
soccer as the lifeblood of the company, and Adidas has been an
official supplier of FIFA for more than 40 years.
Last year's World Cup in Brazil spurred a global marketing blitz
for both companies. For their most recent fiscal years, Nike took
in $2.3 billion in sales of soccer products, a rise of 21%,
compared with EUR2.1 billion ($2.29 billion) for Adidas, up more
than 20%, according to annual reports.
In regards to the ongoing probe, Adidas said Wednesday that it
expects "the highest standards of ethics and compliance" from its
partners.
The wide-ranging probe by the Department of Justice, which lists
14 named defendants as well as 25 co-conspirators, describes a
pervasive culture of corruption over 24 years in the global world
of soccer.
Write to Sara Germano at sara.germano@wsj.com
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