(Bloomberg) -- China's Hisense Group has signed with FIFA to become a World Cup sponsor, a major win for an organization dogged by a corruption scandal and struggling to enlist corporate partners for the world's most popular sporting contest.
Hisense, a maker of consumer electronics largely unheard-of outside its home country, joins McDonald's and Budweiser in the soccer body's second highest of three sponsorship tiers. As part of the agreement, its logo will flash up on LED boards both on the field and on scorecards during TV broadcasts of the upcoming tournament in Russia, the company said in a statement.
Before Hisense, FIFA had secured just one new top-tier level partner -- China's Dalian Wanda Group Co. -- since the last tournament in Brazil. FIFA had just nine companies on its roster for the tournament, excluding Hisense. That compared with 20 by the time the Brazil World Cup kicked off.
“Sponsoring the World Cup is a good way for Hisense to quickly build brand awareness internationally,” Liu Hongxin, Hisense's president, told reporters Thursday in Beijing. “Global expansion is a key strategy for Hisense.”
For a QuickTake on corruption scandals at FIFA, soccer's ruling body, click here
Hisense wouldn't put a price tag on the value of the deal. But Chinese companies from Wanda to Huawei Technologies Co. have grown increasingly aggressive in sponsoring major sporting contests in recent years as they seek to grow their businesses abroad. Wanda, run by billionaire Wang Jianlin, has pledged hundreds of millions of dollars to FIFA. Like other wealthy Chinese, Wang has ploughed investments into soccer since President Xi Jinping made the sport a national priority last year.
Hisense also sponsored the 2016 European soccer championships and its FIFA sponsorship marks the beginning of a longer-term cooperation with the governing body, Liu said without elaborating.
The deal marks a much-needed win for FIFA, which is dealing with the fallout from 2015's corruption scandal that threatened the sporting group's existence and forced out long-term president Sepp Blatter. By the same stage in the tournament cycle for Brazil, almost all agreements had been concluded -- the majority of those confirmed more than three years before the event kicked off.
U.S. companies are staying away from joining FIFA because of the reputational risk associated with the body following its 2015 corruption scandal, said Tony Ponturo, who was responsible for Anheuser-Busch's relationship with FIFA until leaving the brewer in 2008. U.S. authorities in May 2015 charged several senior soccer officials with ties to the organization on corruption charges. That ultimately led to Blatter's fall and demands from sponsors for change.
But companies like Hisense could find the World Cup an efficient marketing vehicle.
“Let's say it costs $100 million. With more than a hundred countries passionately following the tournament, that's less than $1 million per country,” Ponturo said by phone.
Russian state-owned gas giant Gazprom PJSC joined FIFA as a partner in 2013 and it wasn't until July 2016 that Alfa Bank joined as FIFA's first ever --- and so far only -- regional sponsor. FIFA is targeting 14 tier-one and tier-two backers, joined by a further 20 regional sponsors drawn from five global territories. World Cup-related sponsorship brought in $404 million in 2013, according to FIFA data. That figure was down to $246 million in 2015.
--With assistance from Tariq Panja
To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net.
To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Robert Fenner at rfenner@bloomberg.net, Young-Sam Cho
With assistance from Gao Yuan
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