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With a sponsorship, one side can lose if the other misbehaves

Even if you're not a soccer fan, chances are your interest has been piqued because of the recent media buzz about the 47-count indictment that was levied against nine of FIFA's officials. Joked about on John Oliver's show "Last Week Tonight," the scandal has raised awareness of corruption in the organization and has sparked debates about how the indictments will affect future dealings within FIFA.

But for some here in Los Angeles, the scandal has piqued interest in company sponsorships, particularly those for FIFA. As we pointed out last year in a post regarding the terms of a sponsorship deal, the image of one company can be negatively affected if the individual or company it is sponsoring behaves improperly. A fact such as this could easily be applied to the FIFA scandal, begging the question: will any of FIFA's sponsors suffer negative effects as a result of the corruption charges?

In a Washington Post article last month, reports indicate that Nike could be implicated for its involvement with FIFA. Some speculate that the "major U.S. sportswear company" mentioned in the federal indictment refers to Nike. If so, then the company may have to face bribery charges in connection with the scandal, which could hurt the company's image for years to come.

Although some speculate that Nike's profits will suffer very little from possible litigation, many consumers are still swayed by corruption and illegal activities. Negative press can easily cause some consumers to avoid a company who is linked to illicit activities through sponsorships and endorsements.

Fearing loss of customers and potentially negative press releases, companies may decide to drop a deal with an individual or company if they think it could hurt their own image. Whether this will happen in this case remains to be seen.

Sources: The Washington Post, "Nike becomes suspected player in alleged $150 million FIFA bribery scandal," Drew Harwell, May 27, 2015

TIME, "Here’s John Oliver’s Perfect Response to FIFA President Sepp Blatter’s Resignation," Eliana Dockterman, June 2, 2015

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