By Mark Baber
September 25 – The extent of the fall-out for football from the Volkswagen emissions scandal has been the subject of speculation with analysis focusing on the extent of VW’s involvement in football, the depth of the crisis facing the company, the identities of the company’s top management and the role of football sponsorship in VW’s marketing mix.
VfL Wolfsburg of the Bundesliga is a subsidiary of VW and the club most likely to suffer direct consequences from the scandal, however VW also maintains investments in Bayern München and FC Ingolstadt, through its Audi AG subsidiary.
VW is reported to have been pumping around €100 million annually into Wolfsburg and is also an official partner of the German Cup and has sponsorship arrangements in place with more than a dozen Bundesliga and Second Bundesliga clubs, including Hamburg SV, Schalke 04 and Eintracht Braunschweig. Volkswagen’s overall sport and sports marketing activities are estimated to be worth several hundred million euros
With VW having admitted that 11 million of its vehicles worldwide have been engineered to illegally defeat emissions tests, the company faces massive fines from regulators in the US, and potentially also in Europe, the prospect of a large scale recall, severe reputational damage and numerous law-suits, the prospect of which has seen the company’s share price plummet from $162.40 on Friday last week to $114.35 this morning.
However the extent of damage which will be done to the world’s biggest car manufacturer is impossible to fathom, particularly with reports the deception may have extended to petrol vehicles, the possibility customers would resist a voluntary recall and uncertainty about the extent to which regulators will pursue the company.
VW chief executive Martin Winterkorn, who resigned his position on Wednesday, is widely seen as being a major force behind VW’s involvement in football and retains a seat on the Board of Bayern. A lot will depend on the attitude of his replacement (and potentially other new senior managers).
Winterkorn, justified high spending on football sponsorship saying: “We sell more cars thanks to the commitment in the regions, whether in Munich, Gelsenkirchen or Bremen,” and it is believed the general feeling in the group was in favour of promotion through football, although supervisory board chairman Ferdinand Piech is understood to favour a scaling back.
Given the current unstable situation, it is unsurprising that a spokesman from VfL Wolfsburg had no comment to make on the crisis. There has also been no word from the company about the future of its football sponsorships, equally unsurprising given the magnitude of the other problems it is facing.
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