Professor E.A. Brett criticises widespread corruption in world football and demonstrates how organisational theory exposes systemic problems. Highlighting governance failures and regulatory shortcomings, Brett critiques FIFA’s monopoly and impunity as threats to accountability and fairness. He calls for strengthened governance, robust regulations, and empowered stakeholders to combat opportunism and malfeasance.

The Challenge: Managing Non-Accountability and Impunity in FIFA

In 2015 many of world football’s senior officials were arrested by the US authorities and convicted of multiple criminal offences. Many of their activities had already been exposed by journalists and academics but could have continued indefinitely because they had been ignored by most key officials and concealed from football’s stakeholders until the US intervention. That crisis forced FIFA to change its leadership and reform its internal and external regulatory structures. It probably reduced the prevalence of criminal behaviour, but it has not eliminated it and the leadership’s ability to appropriate the lion’s share of its immense and growing income at the expense of their stakeholders – the clubs, players, fans, commercial partners, and the regulatory authorities. Mainstream organisational theory can help explain these failures and identify possible solutions to the problem.

Regulating Effective Organisational Systems

Organisations and their stakeholders depend on each other, but also have conflicting interests, since the former would like to maximise their benefits, and the latter would like to minimise their contributions. Hence, effective organisational performance depends on accountability mechanism that enable organisations to be paid enough to provide good services, and stakeholders to monitor and sanction their suppliers if they fail, or oblige them to respond to their demands. Further, even where stakeholders have the formal right to do this, their substantive ability to do so will depend on the existence of effective agencies that can provide them with the information, judicial proceeding and sanctions they need to punish or remove incompetent or corrupt agencies.

These procedures differ in state agencies, private firms, and in international sporting organisations like FIFA. State agencies are funded by taxes and controlled by democratic competition; firms are funded by sales and profits, and subject to market competition; while FIFA sells tickets and TV marketing rights but is only directly accountable to its Congress and delegates from its National Football Associations(NFAs). These procedures also fail in states and firms, but are even more vulnerable in sporting organisations like FIFA that has always claimed an unconditional right to control its own structures and finances, subject only to the legal and normative standards that regulate all formally constituted political, economic and social organisations. While its internal relationships with its own stakeholders, and external relationships with its commercial partners and states do impose some real constraints, these have very limited impact on its behaviour.

Internal and External Regulatory Regimes in World Football

Football’s leaders are subject to three key constraints. They must –

• Allow FIFA’s Congress, composed of delegates from the NFAs, to elect the President, and allow its regulatory and executive committees to monitor and sanction their behaviour and confirm or override their decisions;
• Respect national and international law;
• and organise successful tournaments that maximise income from fans, sponsors and the media.

However, these mechanisms are all characterised by serious weaknesses.

Political Capture and Democratic Failures

FIFA’s Congress elects the President, can authorise policy decisions, choose World Cup venues and appoint its supervisory and judicial Committees. Each NFA has one vote, and their members also sit on its very lucrative decision-making, governance, and judicial committees. They therefore do have the form alright to hold their leaders to account, but their substantive ability to do so is heavily constrained. This is because most delegates are not chosen by clubs or players but by undemocratic, weak, and often corrupt NFAs. They depend on the leadership for handouts and lucrative appointments and lack the time and organisational structures needed to monitor the leadership’s behaviour, discuss policy options, and coordinate their interventions.

The ‘independent’ supervisory and judicial committees set up in 2016 were introduced to ensure that leaders meet their obligations. They are appointed by Congress rather than the leadership and include external officials with international reputations. They did initially attempt to impose sanctions on Infantino, the President, but their efforts were overturned by Congress that had re-elected him a few weeks after he had given large grants to many of the poorer NFAs. Delegates from the wealthier NFAs have attempted to challenge these abuses in the past, but always been outvoted by the smaller ones that have a large inbuilt majority. Further, clubs, players and fans, unlike citizens in modern states, do not have any formal rights that enable them to challenge these outcomes.

Regulatory Failures, Political Autonomy and Organisational Impunity

All organisations are regulated by governments that must recognise their constitutional arrangements and enable them to enforce their property rights, although the nature and effectiveness of their rules vary widely. FIFA is registered in Switzerland where the very liberal regulatory regime has allowed it to claim that-

• It has sole authority over the rules and management of the game;
• its activities and those of the NFAs should be protected from interference from their governments;
• its own regulatory organisations have the sole right to monitor and sanction the activities and behaviour of NFAs, clubs and players;
• it can allocate international tournaments and appropriate the income that they generate.

These rules give its agencies a large degree of substantive, but not absolute autonomy. Switzerland gave FIFA almost complete impunity from criminal prosecution until the 2015 crisis and has only introduced very limited controls since then. Together with other national governments, it also recognised the right of FIFA’s judicial committees, rather than national courts, to settle all football disputes. However, governments do retain the ultimate authority to decide what constitutes legitimate behaviour, and to monitor and punish illegal actions, even when football officials are involved in international deals, which is why the US authorities were able to prosecute the officials that used their banks to conduct fraudulent operations.

However, the leadership still controls its own supervisory committees, and Switzerland has initiated some trials, but they have involved long delays and limited punishments. The US authorities cannot punish offences committed in other less accountable jurisdictions. Further, like all national authorities, they can only deal with criminal behaviour and rarely have the resources and information to uncover and punish it. Hence, many leaders can still conceal their activities, pay themselves inflated salaries, bonuses and expenses, and make sweetheart deals with corrupt officials and authoritarian regimes.

Monopoly Power and a Soft Budget Constraint

FIFA’s monopolistic control over the allocation of tournaments and commercial rights gives it the income needed to manage the game but limits the ability of its stakeholders to hold it to account. Instead, its dual role as a not-for-profit association, and wealthy commercial organisation, creates a soft budget constraint that allows its leaders and officials to enrich themselves at the expense of their stakeholders.

The football authorities do have to regulate the game, supervise tournaments, and finance the judicial committees that handle criminal proceedings and disputes between players, clubs and leagues. However, these tasks could be carried out far more economically than is the case, since host countries cover tournament costs, and most national leagues and clubs require very little supervision or financial support. Thus, the authorities should be spending a far larger proportion of their income promoting the game in the poorest countries that need their support the most.

What Could be Done?

We have seen that these weaknesses could only be remedied by strengthening the rules that would enable its stakeholders to challenge the leadership’s ability to capture its internal democratic processes, evade effective state regulation and exploit their commercial monopolies. Academics, journalists, and the regulatory authorities, have been suggesting radical reforms for decades, but their ability to enforce them has been very limited.

Strengthen Internal Democratic Processes

Giving delegates from larger countries a fairer share of the votes in Congress would reduce the ability of the leadership to buy the votes of often corrupt and unrepresentative delegates from the weakest countries. These changes would need to be complemented by giving national and regional organisations representing players, clubs and fans, the rights and resources needed to exert an effective influence on their associations and governments.

Radical legal changes of this kind are very unlikely, but far more could be done to strengthen the substantive ability of stakeholders to monitor and expose the opportunism and malfeasance as we will see.

Strengthen its Corporate Responsibilities

FIFA has already incorporated the rules that govern international corporations into its constitution, and set up internal committees to enforce them, but its leaders are not beholden to shareholders, and their commercial partners and host nations lack the ability to affect its behaviour. It has increased its income by sponsoring new tournaments but is facing increasing opposition from leagues and players in advanced countries and finding it much harder to locate sponsors willing to finance them.

It’s soft budget constraint depends on its monopoly over tournaments that is illegal under European competition law. An independent agency is again trying to set up a European Super League to compete with UEFA sponsored European leagues. This project is still being challenged by leagues, clubs, players and fans, so it may not succeed.

These difficulties have imposed some limits on behaviour but have not limited FIFA’s ability to freely allocate its existing assets.

Strengthen the Regulatory Regime

Only governments could force the football authorities to reform its internal democratic processes and strengthen its corporate governances because they do have the authority to oblige them to do so, as the US intervention showed.

Implementing radical changes like this would require an international political campaign to persuade governments to take the necessary political action. FIFA, however, might exclude any country from its leagues and tournaments, that threatened to take action. This is problematic as many local politicians are closely associated with their NFA leaders and are financially dependent on FIFA.

Important EU agencies and international NGOs have been actively calling for radical action, but their reforms are unlikely to receive serious attention in a world dominated by major political conflicts.

Conclusion

There are serious weaknesses of the institutional arrangements that protect FIFA and the NFAs from effective external controls and attempts at radical constitutional reforms are likely to fail. FIFA’s existing rules already give stakeholders the formal right to demand cost effective services but lack the information and organisational resources they need to expose exploitative behaviour and persuade their representatives and governments to intervene and change it.

Nonetheless, a great deal could still be done. The 2015 crisis has had some very positive consequences, and only took place because investigative academics and journalists were able to persuade the US authorities to intervene. What the players and fans in the poorest countries now need is access to independent researchers able to expose the failings of the football leadership, elect honest leaders, and to persuade their political parties and representative organisations to force their governments to punish their crimes and misdemeanours.               

The views expressed in this post are those of the author and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science.

Featured image credit: Emilio Garcia via Unsplash.com. Creative Commons