With an annual sales amounting to $27.8 billion, Nike won't be drastically affected by the recent FIFA corruption scandal, in terms of existing deals made with the organization.
Many believe that the sportswear company is stable enough to overcome any challenges in light of the issue.
Andrew Burns, an analyst from D.A. Davidson, sent an email to Biz Journals stating, "I don't think this will damage Nike at all. FIFA corruption has been known for years and any potential financial penalties that are handed down ... Will not be material to the company."
"I don't think any consumer blames or lumps Nike into the broader FIFA issue either. As long as the product continues to lead the market, I think Nike will be a bullet proof," Burns added.
Nike was not stated in the indictment as accused of being included in the kickback payments.
According to reports, an anonymous multinational US-based sportswear company drafted a contract with Brazil's national team in 1996. The deal was to be fulfilled within 10 years, with $160 million negotiated between the said company and the executives of a certain football confederation.
Besides the controversial deal, another agreement between the same enterprise and Traffic Group, a Brazilian sports marketing company, was signed and marketing fees were paid, invoiced by the latter.
$30 million was written down as payment by the branded wear between 1996 and 1999 to the Traffic Group. Half of the money earned it was allegedly pocketed, according to Federal prosecutors.
A statement was issued by Nike on Thursday, clarifying that they are not involved in any of the controversies.
"The charging documents unsealed yesterday in Brooklyn do not allege that Nike engaged in criminal conduct. There is no allegation in the charging documents that any Nike employee was aware of or knowingly participated in any bribery or kickback scheme," the company stated.
The investigation is still ongoing and Nike has been cooperating, and will continue to cooperate, with the authorities.
