Jérôme Valcke: He scored the worst-ever own goal. Now he's running football
He lost his job in marketing at Fifa after a judge ruled he had lied over a sponsorship deal. But 10 months on, he's the boss. David Owen hears his comeback story
Sunday 28 October 2007
It can take a lifetime to build a reputation, 10 minutes to destroy it. Few business executives understand this better than Jérôme Valcke, the general secretary of Fifa, world football's governing body.
Ten months ago, the Frenchman's career was in tatters at the age of 46. A New York judge had stated that Valcke, then Fifa's marketing director, had lied to two groups – MasterCard and Visa – bidding for the right to sponsor the 2010 and 2014 World Cups.
This prompted his employer to "part company" with Valcke and three of his colleagues. "Fifa's negotiations breached its business principles," the governing body said. "Fifa cannot possibly accept such conduct among its own employees."
Talking publicly about his ordeal for the first time last Sunday, Valcke – whose recent return to Fifa as its top appointed official ranks by any measure as an extraordinary shift in fortune – comes across as a chastened but aggrieved figure.
"I made the biggest mistake of my life by saying that in business we don't always say the truth and you could describe that as a commercial lie," he explains. "And then I was dead. The day I [used the phrase] 'commercial lie', I was out – completely destroyed by [MasterCard's] lawyer."
The court said the sponsorship contract eventually concluded between Fifa and Visa was invalid on the grounds that Fifa had breached its "obligation" to give MasterCard, a long-time World Cup sponsor, the first right to acquire the next round of sponsorship. It described Fifa's conduct in negotiations as "anything but fair play".
Yet Valcke insists that nothing in the MasterCard agreement forbade Fifa from entering into discussion with other companies. "I feel I am clean," he says. "I would feel dirty if what I had done between Visa and MasterCard... had been always to push for a higher price. But that was never the case. [Our] goal [from the sponsorship] was $180m and we never used the competition to increase the price.
"We used the competition to make sure that at the end we would have one deal. Up to the last minute there was no insurance that one of them would sign the long-form agreement, so we just kept everything on track to make sure one company would sign.
"I won't say that in the same situation I would do the same today, but I don't have the feeling we have been so dirty. There was never an auction."
Valcke's fortunes began to change in May when an appeals court panel vacated the original judgment and remanded the case. Less than a month later, on 21 June, Fifa and MasterCard reached agreement to terminate legal proceedings at a cost to Fifa of $90m (£45m), including settlement of a separate marketing dispute. Within six days of that, Valcke was back – this time as general secretary.
He marked his return to the Fifa fold by organising a weekend at his house in Corsica for 10 associates who had stuck by him during his spell in the cold. "These guys from the business were the only ones calling me and saying, 'Let's think about what you want to do next,' " he recalls. "But you have the feeling that everything is destroyed."
It shows how highly Fifa president Sepp Blatter (pictured) must rate the former Canal Plus executive that he was rehired even though the affair in effect cost Fifa half the revenues it was expecting from the eight-year sponsorship.
"Our world is a very small world," says Valcke of his return to favour. "We worked closely together for three years. Whatever Blatter asked me, and what I committed to deliver when I joined Fifa, I did. So we have a strong relationship, Blatter and myself."
His main achievement as marketing director was to revamp the body's sponsorship programme with the aim of forging strong bonds with a relatively small number of corporate partners. In the event, Fifa did deals with six groups – Adidas, Coca-Cola, Emirates, Hyun- dai, Sony and Visa – for the 2007-2014 period, raising well over $1bn. "We increased by close to 50 per cent what all these firms paid, if you compare Germany [host of the 2006 World Cup] to South Africa [due to stage the 2010 tournament]."
The cash that has poured into football since the advent of pay-TV has been accompanied by a stream of allegations of sleaze and corruption. Sometimes, as with a recent BBC Panorama programme, these have centred on Fifa. Based on Valcke's four years there, is the organisation corrupt?
He laughs, suggesting I will mention this in my article. A pause, then he replies: "Maybe I shouldn't say this, but I can swear on the people I like the most that I have never seen in my four years at Fifa... something where I could have said, 'Oh, this is corruption'.
"The MasterCard lawyer asked me the question – I was very upset – 'how much did you get from Visa to sign with Visa?' I told him, 'I'm happy that there is a table between us because otherwise I think I would have jumped on you.'
"Not once have I received, not for a single minute, during negotiations which took, some of them, 18 months or 24 months – an idea that potentially the guy would be ready to pay Fifa something, or pay me something, or give me something in order to close the deal. Not a single time."
I observe that the allegations concerning Fifa often involve members of the body's executive committee. Are standards at that level as strong as they should be?
Valcke remarks that governance standards in any organisation need continual adapting, but he goes on: "From September 2003 to December 2006, I have never been asked to use commercial rights to please someone from the executive committee. I have never been asked to sell [anything] for less than market value to one of the countries represented by an executive committee member. [I have] never been asked by Blatter or a Fifa member to make [their] political life easier by using our commercial assets."
I note that I have seen statements from industry executives suggesting the payment of bribes or commissions was endemic in the sports rights business. At first, I am taken aback by his reply: "I agree with you." But, he continues: "The old world was the system of commission. Twenty years ago... you were giving commissions to people in order to get market or to get product or whatever. Today the legal system has changed. I don't know if it's an improvement or not, I just say it has changed. You can't do it any more.
"I'm too young in a way to have been in this system, but I agree it was a system."
I say that the payments I am alluding to continued until 2000. Once again, Valcke agrees with me. "The system was maybe changed in the 1990s," he acknowledges. "But in the '90s you had younger people coming into the business. You had more and more people in charge who were from business schools – who were not just the son of the friends of [so and so].
"When the money [began to come] in, it became a real business. When we launched Canal Plus in 1984, the [TV rights] agreements were just one page. Ten years later, the agreements are 150 pages and you are negotiating for months."
Fifa should soon attain a new level of financial security. Valcke says that by 2010 it will be strong enough, with reserves of "around $750m", to "face a situation where we could have a cancellation" of the World Cup. This will be an important moment for a body still heavily dependent commercially on just one event.
With money still gushing into the so-called beautiful game at an unprecedented rate, does it really matter that football – and Fifa – are saddled with seemingly perennial reputations for dodgy dealings?
Valcke is clear that it does matter. "Who is happy to be on the front line – to have the press saying, 'You are corrupt people' or 'You are a corrupt organisation' or 'Your sport is corrupt?' No one can be happy about that." Given the year he has had, you sense he means it.
They call it the 'beautiful game': Fifa and the allegations of foul play
17 June 2003: Jérôme Valcke appointed head of marketing at Fifa.
9 June 2006: Fifa congress votes to create a new independent ethics committee.
11 June 2006: 'Panorama' airs programme on alleged corruption and the World Cup.
23 October 2006: ethics committee holds inaugural meeting under chairmanship of Lord Coe.
7 December 2006: American District Court judge Loretta Preska rules that Fifa be prohibited from going ahead with a World Cup sponsorship deal with Visa. It is required instead to proceed with an agreement with MasterCard, a long-time World Cup sponsor. She says Fifa's negotiators lied to both companies.
12 December 2006: Fifa "parts company" with four employees, including Valcke, saying thenegotiations breached business principles.
25 May 2007: An appeals court panel vacates the original judgment and remands the case.
21 June 2007: Fifa and MasterCard reach settlement to end legal proceedings at cost to Fifa of $90m.
27 June 2007: Valcke appointed Fifa general secretary.
28 June 2007: Fifa confirms sponsorship deal for 2007-2014 period with Visa.
22 October 2007: 'Panorama' asks why Fifa's ethics committee is not taking action over a series of "suspect dealings" involving the governing body, including some related to the MasterCard and Visa negotiations.
December 2007: meeting of ethics committee scheduled to discuss its role in bidding process for 2018 World Cup and other issues.
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