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It appears as if Nike is suspected by U.S. authorities of connection to bribery involving the sponsorship of the Brazilian national soccer federation (CBF). The U.S. Department of Justice today announced the indictment of nine Fédération Internationale de Football Association (FIFA) officials and five businessmen for racketeering conspiracy and corruption. The DOJ's statement says that the crimes alleged include "the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company." A statement released later in the day by Nike appeared to confirm that it is the company under the microscope.
"Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery," the statement said. "We have been cooperating, and will continue to cooperate, with the authorities."
In 1996, U.S. sportswear juggernaut Nike signed a roughly $200 million contract with the CBF, which gave the company the rights to supply sports kits and be a co-sponsor of the Brazilian national team. Details concerning the terms of the deal began to leak in 1999. The following is a snippet from a July 2001 article in The Guardian:
A clause stipulated Nike's right to organise five international games a year with at least eight first team regulars. Juca Kfouri, Brazil's leading sports columnist, said: "It is obvious to me that the CBF gave away sovereignty. The CBF is more interested in remuneration than the interests of the Brazilian national team."
Aldo Rebelo, a communist congressman in Brazil, was quoted in that same article stating that "Disney didn't sell Mickey Mouse, but the CBF sold the national team to Nike." He added, "The Nike contract was just a sign. It was the most visible way of showing what was going on in Brazilian football."
Prior to Nike, the CBF was under contract with Umbro. In fact, Nike paid Umbro an undisclosed amount of money in order to void the final two years on its contract with the CBF. Nike wanted to control the world of soccer and the focal point was taking over sponsorship of the Brazilian national soccer federation.
In 2008, Nike signed a new agreement with the CBF, which extended the previously negotiated deal through 2018. The deal provides CBF with an annual payment of $34 million from Nike.
From the beginning of this century through today, the CBF has been associated with Nike, a U.S. sportswear company . The U.S. Department of Justice release states that its findings are based on an alleged 24-year scheme based on the named defendants' "scheme to enrich themselves through the corruption of international soccer."
I reached out to a Director at Nike who provided no comment when this article was originally published.
Update: At 2:30 p.m. ET Nike released the following statement - "Like fans everywhere we care passionately about the game and are concerned by the very serious allegations. Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery. We have been cooperating, and will continue to cooperate, with the authorities."
Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.
