Despite FIFA scandal, the show goes on for South American football

When Chile hosts Argentina on Saturday in the final of the quadrennial Copa America tournament, little may seem out of the ordinary unless the home team, which has never won a major football competition, pulls off an upset.

Reuters| Last Updated: Jul 04, 2015, 10:37 AM IST
Despite FIFA scandal, the show goes on for South American football

Rio de Janeiro: When Chile hosts Argentina on Saturday in the final of the quadrennial Copa America tournament, little may seem out of the ordinary unless the home team, which has never won a major football competition, pulls off an upset.

Behind the scenes, though, it is a wonder the event came off. 

The tournament`s organiser, the grouping for South America`s national football federations, is scrambling for financing and fretting over the fate of senior officials, many of whom were indicted or described as “co-conspirators” in the ongoing U.S. probe into corruption in the world`s most popular sport.

Also, the top three executives of the confederation`s key partner are under arrest. The company purchased marketing rights for this and the next three Copa America tournaments, and the executives are accused of masterminding a bribery scheme involving $110 million in promised kickbacks.

Somehow, the 12-nation tournament still proceeded, just two weeks after U.S. prosecutors unveiled their indictments.

What`s more, none of the many broadcasters, sponsors or other third parties with contracts for the future Copa Americas have cut ties with the tournament.

Despite corruption at the bodies that govern football, fans find the sport irresistible. Because the alleged fraud has not been linked to the many third parties at Copa America, it is business as usual for most companies.

“If you yourself did not break the law and you believe that you signed a valid contract, you have no real incentive to change it,” says one Europe-based attorney and expert on media rights, who requested anonymity because in the past he advised FIFA, football`s global governing body, on television contracts.

Still, big problems could be coming.

Midway through the three-week tournament, officials at Conmebol, as the South American confederation is known, said they were scrambling to cover a shortfall caused when Swiss authorities blocked the bank account of Datisa SA. That Uruguay-based company had purchased the marketing rights, and its Argentine and Brazilian founders were indicted.

Datisa still owes the confederation more than half of an $80 million payment that was due during the tournament. So Conmebol had to tap a contingency fund.

Last week, Carlos Chávez, Conmebol`s treasurer, said in an interview that the confederation could eventually break its contract with Datisa, but that would be difficult because of subsequent contracts Datisa signed with others. 

Datisa says Conmebol has not yet broached any rupture. The company already has contracts signed with broadcasters, sponsors and other subcontractors for the 2019 and 2023 tournaments and a special centennial edition of the event scheduled next year.

None of those parties has sought to break or renegotiate contracts, says Jochen Loesch, president of international business for Traffic Group, the Brazil-based company that is one of the Datisa partners and whose Brazilian founder has already pled guilty to U.S. fraud charges.

“No client is seeking this,” Loesch wrote in an email.

Loesch declined to specify what broadcasters or sponsors already have rights to future editions. Major broadcasters across South America, including Brazil’s Rede Globo, Chile’s Canal 13, Colombia’s Caracol Televisión and others currently broadcasting the tournament, declined to comment.

At Conmebol, officials said they were eager for the current edition to wrap up so they could start to determine what`s next.

“We had to make this tournament work given the circumstances,” says Néstor Benítez, a spokesman at the confederation`s headquarters in Asunción, Paraguay. “But we don`t really know what happens now.”