The TI report provides an account of a raft of bribery and kickback scandals involving a now bankrupt sports marketing company as being at the centre of several underhand deals. According to the report “an extensive series of bribes” was uncovered more than two years ago following a bankruptcy declaration by the Swiss sports marketing company International Sports Media and Marketing (ISMM). The ISMM stranglehold on television rights for several of the most popular international sports events including the Olympics, World Cup football and athletics World Championships is said to have been secured through a pattern of shelling out multi-million dollar bribes to key players within the organizing bodies.
“ISMM negotiated contracts worth billions of dollars, gaining the broadcasting rights from the IOC, FIFA, International Association of Athletics Federations, International Organization for Swimmers, International Basketball Federation, Confederation of African Football, Union of European Football Associations, Olympic Council of Asia, Association of Tennis Professionals and others.” And according to the report investigators discovered that between 1989 and 2001 US$21m was transferred to persons who had a direct or indirect connection to contracts with ISMM. The report fingers several key FIFA officials.
The sale of rights is one of the largest sources of revenue for sports organizations such as FIFA and the IOC. According to the TI report ISMM began to lose its monopolistic position in the early 1990’s and, in 1996, failed for the first time since its establishment to win the television rights for the Olympics. The company, nonetheless, continued to use its clout to buy up television rights for some of the most popular sports events. In 1998, for example, it held the rights to the world volleyball, swimming and gymnastics championships as well as the United States CART auto-racing series.
In 1996, however, ISMM appeared to have bitten off more than it could chew when, having signed a US$2bn marketing and television contract with the Association of Tennis Professionals in the United States the company was unable to sell the broadcast time which it had acquired at such a high price. “While contracts for the World Cup in 2002 and 2006 somewhat alleviated the liquidity troubles, it seems that they were too little too late. ISMM declared bankruptcy in 2001 with total debts of more than US$300m.
Meanwhile, according to the TI report a FIFA lawsuit against ISMM over the company’s failure to make a previously agreed payment of US$60m representing 75 per cent of the income received by ISMM for selling television rights for the 2002 and 2006 tournaments to Brazil and Japan had to be hastily withdrawn in the wake of allegations of widespread bribery involving ISMM and FIFA officials.
Nonetheless, the public prosecutor who investigated FIFA’s original legal action continued his investigation into the alleged financial crimes, which investigation, the TI report says, included a search of the office of FIFA General Secretary Sepp Blatter. Suspicions of collusion between ISMM and FIFA arose primarily out of the fact that FIFA had consistently granted broadcasting rights to ISMM. The company reportedly transferred approximately US166m in bribes to sports organizations and individual sports officials between 1989 and 2001.
