Please assist with the question following the case study.

The Global Soccer Industry and the Effect of the FIFA Scandal

The Federation Internationale de Football Association (FIFA) was founded in Paris in 1904 and was initially comprised of only European nations. By World War II, FIFA had added a few South American members. Newly independent states in Africa, Asia, and the Caribbean joined later. However, it continued to be governed as though it was an exclusive European club until 1974 when Joao Havelange, a Brazilian, won the election as FIFA president. Havelange was able to transform the organisation and expand the World Cup competition to teams from nations outside Europe and South America and made the tournament a money-making enterprise. With the amount of exposure and money involved, companies desired sponsorship rights because of the advertising potential. Adidas AG and Coca-Cola were original sponsors. Havelange oversaw significant revenue from television rights. In the process, Havelange was alleged to have participated in much corruption and eventually was suspected of amassing $50 million in bribes.

Havelange facilitated the election of Sepp Blatter who became FIFA president in 1998 and continued to follow Havekanges approach to politics. After FIFA became a worldwide organisation, especially in developing countries in Latin America, Africa, and the Caribbean, more allegations of corruption surfaced. One analyst suggested that FIFA could not have developed soccer in poorer countries with corrupt practices. Of course, there has been corruption in more developed countries, such as the United Kingdom and the United States, although normally not through blatant bribery. On May 27, 2015, the United States Department of Justice and the FBI announced a list of indictments, and simultaneous arrests of FIFA officials were made at the Zurich FIFA meetings in Switzerland. Several days after the indictment, though he was not officially indicted, Blatter stepped down from his long presidency.

In order to understand the amount of exposure and money involved, an estimated one billion watched at least some of the 2010 World Cup Final. In the same year the National Football Leagues Super Bowl accumulated only 114.4 million worldwide viewers. Given the massive exposure, it is no wonder that sponsors along with television and media outlets want to be involved. However, sponsors do not want to be associated with a larger scandal. Coca-Cola, Adidas, Nike, McDonalds, and Hyundai Motor were all said to be deeply concerned about the FBI allegations-and by indictments brought recently by the United States Department of Justice against many regional and country-level FIFA-affiliated exceutives who were identified as having participated in the alleged corruption.

Many of the sponsors are cautious about supporting an organisation that ha been tainted politically such as FIFA. Apparently, the way the corruption has been pursued is through intermediaries who are paid exorbitant amounts for contracts that they helped establish; these intermediaries funnel the bribes to the leaders of the regional and country FIFA-related associations. For example, in order for Nike to get a contract in the soccer-crazed country of Brazil, it paid a sports marketing agency, Traffic Brazil, $30 million between 1996 and 1999, which Traffic Brazil used, in part, for bribes and kickbacks. This allowed Nike to sign a 10-year, $160 million agreement to become a co-sponsor of the CBF, the Brazilian soccer confederation. Nikes strategic intent for the deal was to better compete with its chief overseas rival, Adidas. In 2014, the World Cup was held in Brazil, and Nike had $2.3 billion in sales of soccer products, an annual increase of 21 percent, compared with $2.29 billion in sales for Adidas, which was up 20 percent over its previous year. These figure illustrate how strong the incentives are for sponsors as well as for media outlets to participate; the advertising potential and selling opportunities are enormous for those involved.

However, because of the weak institutional infrastructure in many countries around the world where the game of soccer is played, there is opportunity for corruption. Apparently, many involved in the FIFA infrastructure globally, regionally, and within specific countries have taken advantage of this opportunity. For example, Paraguay has been the headquarters for the Latin American regional confederation known as CONMEBOL since 1998 when Nicolas Leoz, a Paraguayan businessman and president of the Latin American Confederation, negotiated to have the confederation headquartered there. As part of the agreement, he obtained prosecutorial immunity for the organisation through the Paraguay parliament. In essence, this gave the federation license to act in ways that would protect it against local law enforcement officials, similar to local embassies that have exemption from prosecution in a particular foreign country. As such, this allowed the local confederation to pursue deals under the table. Leoz was charged in the FIFA indictments by the U.S. Department of Justice, along with 13 other FIFA officials, of bribery and money laundering schemes related to funds he received from sports marketing firms during his tenure at CONMEBOL. Interestingly, following the indictment, Paraguays congress moved quickly to repeal the prosecutorial immunity for the CONMEBOL federation.

Likewise, many other and investigative organisations in Switzerland, Latin America, and around the world, including INTERPOL, an international investigation organisation, have begun to initiate their own enquiries. Many fans in the soccer world have been excited about these indictments because they felt that the corruption was hurting the game. People were profiting in illegal ways that tainted many organisations associated with the game of soccer. This outlines a main danger of working in countries where many participate in corrupt practices indirectly sponsored by the government. This is not to say officials in more developed countries are not also corrupt, but the rule of law is not as strong in many developing countries

Having read the above FIFA scandal case study, please assist me with the following question:

1. Concerning the case study, what is the link between ethics, corporate governance, and social responsibility?