Next year’s World Cup in Russia faces financial crisis as sponsors shun corruption scandal-hit FIFA.
The accounts of football’s ruling body’s show it lost £300million last year and is expected to lose a £400million this year.
Potential sponsors have been put off by Moscow’s action in Ukraine and Syria . There is also growing tension between Putin and other world leaders.
Allegations that Russia won the right to stage the World Cup by paying bribes are also being investigated by police in Switzerland, the United States and France, further damaging the tournament’s reputation.
Since the arrest of senior officials in 2015, FIFA has only managed to secure one local sponsor, Moscow based Alfa Bank.
Only one new international sponsor, China’s Wanda Group, has signed up for next year.
Other major companies were tied into long term deals before the FBI investigation into bribes and bungs began two years ago.
Now, more than 40 FIFA officials and television executives are awaiting trial or have pleaded guilty to corruption. Football sponsorship expert Dr Dan Plumley of Sheffield Hallam University said: “The Fifa brand has become toxic.
“The majority of media publicity about FIFA in recent times has all been negative.
“It is an organisation that has become associated with corruption.”
Fifa lost several major sponsors, including Sony and Emirates, when their deals ended at the end of the last tournament in 2014. It has just 10 companies signed up as sponsors for Russia. Before Brazil, the organisation had 20 corporate partners on board.
Its 211 members are to meet at is annual congress in Bahrain next week to discuss how they can increase sponsorship revenue.
FIFA relies on sponsorship and broadcasting deals to help cover the estimated £1.5 billion cost of organising the World Cup. Companies like Coca Cola, adidas, Hyundai, Visa, McDonalds and energy giant Gazprom all signed before the 2015 FBI arrests.
New deals for next year have yet to be signed. Russia had set a target of 34 sponsors for next year’s World Cup but to date, only 10 slots have been filled. Dr Plumley added: “Sponsors can’t ignore the wider picture and are uncomfortable about Russia, which carries a lot of negative political implications.
“They are also worried about any further corruption that may emerge from the police investigations. Companies want to be associated with a brand that shows them in a positive light. That is unlikely to be the case with the 2018 World Cup.”
Fifa has refused to reveal any details on future sponsorship arrangements but said in a statement: “The sales process is ongoing and new commercial affiliates will join the marketing programme before the FIFA World Cup.”
Andrei Malgin, a professor at the Russian Olympic university, warned two years of recession had made companies there wary of the costs of sponsorship: “They’re essentially worried that they’ll pay the money and won’t see any marketing benefits.”
High-ranking FIFA official Sheikh Ahmad Al-Fahad Al-Sabah resigned at the week-end after denying claims linking him to a fraud case.
Kuwaiti Sheikh Ahmad was linked to Richard Lai, the FIFA audit and compliance committee member who was banned for bribery.
Lai admitted taking £735,000 in bribes in a US Court last week. In a statement, Ahmad said he “vigorously” denies any wrongdoing.
The 53-year-old, a member of both Fifa’s ruling council and president of the Olympic Council of Asia, admitted to being aware of the media speculation but said he was “very surprised” by the allegations.
Court documents in Lai’s case did not directly name Sheikh Ahmad but referred to someone who “at various times” was a “high-ranking official of FIFA, the Kuwait Football Association (KFA), and the Olympic Council of Asia (OCA)”.
In a second statement announcing his resignation, Ahmad said it was in Fifa’s “best interests” for him to go.”With regards to alleged illegal payments to Richard Lai, I can only refer to my previous statement and vigorously deny any wrongdoing,” it read.
Fifa president Gianni Infantino thanked him for taking the decision which was ‘in the best interest of Fifa.’