FIFA, from Non-Profit to Business Empire: The Hidden Story of Adidas and Horst Dassler

FIFA is registered as an association under Swiss civil law, making it a non-profit organization that cannot distribute profits. However, questions arise due to its operation of vast funds and persistent allegations of corruption related to them. Namgung Min, a book columnist, pointed out, "This is an association under Swiss civil law. It's a non-profit association, so it's puzzling why they are so fixated on money," explaining that this is ultimately due to a structure that expends funds in various forms such as personnel costs, bonuses, and corporate cards.

The material uncovering the reality of FIFA's corruption allegations is based on 'FIFA Mafia,' a book by German investigative journalist Thomas Kistner. Published in 2014, the book was compiled from court judgments and FIFA whistleblowing information collected by Kistner over 20 years. Namgung Min, a columnist, explained, "This book, published in 2014 and now out of print, was written by Thomas Kistner, a German investigative journalist," emphasizing that the book became a crucial clue in revealing FIFA's dark side.

Originally, FIFA was an organization closer to a pure social club formed by European football enthusiasts. However, the decisive turning point in the organization's character was the intervention of Horst Dassler, the son of the Adidas founder. Namgung Min, a columnist, revealed, "At the center of this was not a politician, but a CEO. That was the CEO of Adidas," pointing out Dassler's ambition to transform FIFA into a massive commercial business model. With his intervention, FIFA began to lose its previous honorary character and evolved into an organization where money and power exchanged hands.

Adidas's growth is closely linked to the 1954 World Cup final in Bern, Switzerland, known as the 'Miracle of Bern.' West Germany defeated strong favorites Hungary to win the World Cup, a victory underpinned by Adidas's innovative football boots. Namgung Min, a columnist, explained, "The 'Miracle of Bern' incident happened in 1954. What did Adidas do there? What comes to mind when we think of football boots are the studs at the bottom. Adidas started that first." Adidas provided West German players with the world's first studded football boots, allowing them to maintain stable performance in the rain, which became a decisive factor in Adidas's rise as a unique entity in the football market.

In the past, FIFA was closer to a simple football social club, and the presidency was largely an honorary position elected by unanimous applause. However, with Adidas's intervention, FIFA's character completely changed. Namgung Min, a columnist, emphasized, "Now, if Adidas picks the right person as president, global sales will change. Before, it was like a social club president, so it was decided by unanimous applause, but with Adidas joining, it became an incredibly important position." Now, the election of the FIFA president became a crucial commercial decision directly impacting Adidas's global sales, leading to fierce power struggles for the presidential seat.

Horst Dassler's choice of João Havelange as a FIFA presidential candidate was based on exploiting Havelange's moral weaknesses. Namgung Min, a columnist, explained, "From Adidas's perspective, he had a profile that was not bad to keep under their thumb. Yes. He had some shady past and weaknesses, so a subordinate would listen if you bribed them," suggesting that Dassler intended to control Havelange by using his opaque private life. This was part of Dassler's strategy to achieve his commercial goals through the FIFA president, with the calculation that a person with weaknesses would be more susceptible to lobbying.

FIFA President João Havelange was known as 'a friend of the Third World' but was actually embroiled in corruption allegations, maintaining close ties with several Third World dictators. Namgung Min, a columnist, pointed out, "Havelange's nickname was 'friends of the Third World,' but he was too friendly with them, and most of them were dictators in the Third World at the time. He was involved in illegal lottery businesses and arms dealing, for example. Even if there was a dictator who committed massacres in South Africa, he would say 'football and politics are separate' and go hang out with them." Havelange was accused of condoning or even collaborating with dictators' corrupt acts under the pretext that 'football and politics are separate,' which sometimes manifested as coercion in major decision-making processes like World Cup host selections.

Allegations of Horst Dassler's involvement also arose during Juan Antonio Samaranch's election as IOC (International Olympic Committee) president. Samaranch served as governor during Spain's Franco dictatorship and was suspected of being a KGB (Soviet State Security Committee) informant recruited during his tenure as ambassador to Moscow. Namgung Min, a columnist, explained, "Samaranch is Spanish. He served as governor during General Franco's dictatorship. He spent a long time in Moscow, and later, according to declassified records, he was a recruited KGB informant. But anyway, he became the IOC president." He mentioned the possibility that Samaranch's opaque past and Dassler's behind-the-scenes support influenced his election as president. This illustrates Dassler's attempt to expand his influence across the sports world.

One of the first rules to change after Samaranch's election as IOC president was allowing professional athletes to participate in the Olympics. Previously, only amateur athletes could compete, but this rule was abruptly deleted. Namgung Min, a columnist, commented, "This was the very first rule Samaranch changed. He deleted the rule that only amateurs could participate. Because, from the perspective of companies like Adidas, frankly, we want to watch matches with the best players like Messi, not necessarily matches with players who overcame hardships." He explained that this had a commercial purpose: to maximize corporate sports marketing efficiency, boost viewer interest, and ultimately turn sports into a bigger business.

The relaxation of Olympic amateur rules immediately led to the full-scale commercialization of the Olympics. With professional athletes allowed to participate, the Olympics became a stage where global stars competed, which became a significant motivation to attract large-scale corporate sponsorships, such as exclusive sponsor contracts. From this point, the Olympics transformed from a mere sports event into a massive market with immense economic value. While the overall size of the sports industry dramatically increased, criticism also arose that the intrinsic values of sports and the spirit of amateurism had faded.

During the 1982 World Cup in Spain, allegations of FIFA President João Havelange's profiteering arose concerning FIFA's insurance contract. Suddenly, 20% of the contract was signed with an insurance company in Brazil, and investigations revealed that President Havelange was a director of that insurance group. Namgung Min, a columnist, commented, "20% of the entire contract suddenly went to an insurance company in Brazil, and when this lawyer investigated, Havelange was a director of that group," pointing out that this was a clear act of pursuing private interests using the FIFA president's position and an act of corruption. This incident is considered one of the representative examples showing FIFA's corruption structure.

Horst Dassler founded ISL (International Sport and Leisure) in 1982 to manipulate FIFA's cash flow and use it as a pipeline for creating slush funds. Since there was no way to divert the approximately 1 trillion won in direct profits that FIFA received, Dassler used ISL as a marketing company to indirectly funnel profits. Namgung Min, a columnist, explained, "When FIFA directly received 1 trillion won in profits, there was no way to divert it, so they channeled the money to a marketing company and processed it as expenses there, allowing the money to flow out from the marketing company." ISL exclusively won FIFA's marketing rights, generating enormous profits, and these funds were allegedly used to buy votes in FIFA elections worldwide.

FIFA's abnormal transactions through ISL are revealed in specific figures. The marketing rights for the 1986 Mexico World Cup were sold to ISL for 45 million Swiss francs, a figure dwarfed by the 200 million francs ISL resold them for to sponsors, making enormous profits. Namgung Min, a columnist, pointed out, "If FIFA had sold it directly for 200 million francs, but sold it for 45 million francs, it's easy to see that approximately 160 million francs were essentially given to ISL." He emphasized that this was an abnormal transaction, amounting to FIFA effectively giving ISL about 160 million francs. Such transactions strongly suggest that ISL acted as a channel for FIFA's slush funds.

While Horst Dassler focused solely on seizing FIFA and lobbying, Adidas neglected its core business of strengthening product competitiveness. As a result, Nike, created by 'an American obsessed with shoes,' rapidly rose and began to erode Adidas's market position. Namgung Min, a columnist, explained, "During that time, Nike, a company created by an American obsessed with shoes, surged. Adidas must have been heavily criticized in sports from this point on. Its image was stamped as something dark, full of conspiracies, and Adidas itself experienced a period of stagnation." He emphasized that Adidas suffered a significant decline in corporate image and went through a slump, being perceived as 'a dark force ruining sports.'

The Dassler family chose a shrewd strategy: they sold Adidas's management rights but retained their shares in ISL until the very end. ISL was a virtually unknown company that earned enormous profits by monopolizing FIFA's marketing rights. Namgung Min, a columnist, explained, "But the funny thing is, Dassler's descendants didn't sell something. What didn't they sell? They kept their ISL shares. If you hold Adidas stock, you're threatened by politicians and criticized. They just sold all that off and chose the path of living lavishly on 'untraceable money' from the mysterious company ISL." This was a deliberate choice by the Dassler family to escape the political controversies and negative public opinion surrounding Adidas while continuing to collect 'untraceable money' from ISL in the shadows. The Dassler family is accused of abandoning Adidas and making ISL their 'golden goose' to accumulate vast wealth.

Chung Mong-joon, former chairman of Hyundai Heavy Industries, acted as a 'clear opposition' as FIFA Vice President, challenging FIFA's entrenched power structure. He criticized the long-standing corruption and the exclusive power of certain factions within FIFA, advocating for change. Namgung Min, a columnist, analyzed, "Chairman Chung Mong-joon was the opposition in FIFA. He was a clear opposition. Was his argument to return FIFA to its pure state, or 'why are only you benefiting, let me benefit too'? In my opinion, it was a complete battle for votes, a political struggle. If it's a game where the winner takes all, let's gather our strength and try to seize power." His challenge was more a power struggle utilizing the one-nation, one-vote principle than pure reform, but it was significant in cracking FIFA's long-standing lobbying network and vested interests, signaling the emergence of new forces.