Could Nike Drop Barcelona Over Referee Payments Scandal?

Barcelona are currently embroiled in a scandal centred around payments of €1.4 million that the club made to Enriquez Negreira, vice-president of Spanish football’s refereeing committee at the time of the payments. Is it damaging enough for Nike to cut ties with the Blaugrana?

Could Nike Cut Ties with Barcelona?

Last week it came to light that Barcelona made several payments totalling (€1.4 million) to a company called DASNIL between 2016 and 2018. DASNIL is owned by Jose Maria Enriquez Negreira, who was vice president of the Spanish referees committee at the time, so those payments certainly raised suspicion. Both Barcelona and Negreira deny that the payments were made in return for preferential treatment from league referees, saying that Negreira instead provided a consultancy service and advice to the club.

Prosecutors are currently investigating the case, while the Spanish Football Association and the High Council for Sports (a government body) could also become involved. There has been talk of possible punishments, with a points deduction mentioned, although La Liga president Javier Tebas has said that Barcelona will not be docked points by La Liga as the time window for such sanctions has expired. However, the investigation is only in the very early stages, and it's difficult to say what the fallout could be at this point.

Away from any potential sporting sanctions, there is also the question of damage to the club's image. Paying off referees would not exactly demonstrate great sporting integrity. For their commercial partners, this could make them reconsider their relationship with the club. In today's society, brands place a lot of focus on upholding their values, or at least appearing to do so. Nike are Barcelona’s most important commercial partner and have been working with them since 1998. Could the American brand deem the club’s actions serious enough to end their partnership?

Nike's History of Dealing with Scandals

Nike have a history of terminating contracts with individual athletes for behaviour that the brand condemns. Here are a few examples:

• Kyrie Irving, basketball player who shared anti-semitic content on social media.
• Antonio Brown, NFL player who failed a drug test.
• Maria Sharapova, tennis player who failed a drug test.
• Amaury Nolasco, baseball player who failed a drug test.
• Ray Rice, NFL player who physically abused his wife.
• Lance Armstrong, disgraced cyclist who was stripped of seven Tour de France titles for doping offences.

Nike announced last summer that they were pulling out of the Russian market completely in the wake of Vladimir Putin’s ongoing war on Ukraine. They also announced an end to their deal with Spartak Moscow last summer, although the club continue to wear Nike gear, as do Zenit St. Petersburg. There are fewer clear cut examples of the brand dropping teams - as opposed to individuals - for ethical reasons, but one such example came in 2021 when they cancelled their deal with Yorkshire County Cricket Club due to allegations of a culture of racism within the club.

In relation to the scandal surrounding Barcelona, Nike have been in a similar situation before. When Juventus were found guilty of match-fixing and relegated to Serie B as a result in 2006, and stripped of two Serie A titles, Nike were their technical sponsor. It is said that Nike wanted to terminate their contract with Juve, but instead renegotiated reduced financial terms that were more beneficial to them. The relationship was rocky from then on though, and the two ended up going to court, with Juventus ordered to pay Nike €2 million in damages in 2016. Nike’s complaints related to Juve’s insistence on adding three stars (each star represents 10 Scudetti) to Nike branded gear in 2012, despite their official title count being 28 due to the outcome of the Calciopoli scandal, as well as a “lack of brand exposure” caused by players not celebrating a post-Calciopoli title win in Nike clothing.

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The world is a different place today, compared to 2006, when Nike stuck with Juve through their scandal. Brands and corporations are much more open to criticism of their ethics (or lack thereof) and much more vulnerable to the damage that can be done to their reputation as a consequence. The influence of social media generally works in their favour with its vast marketing potential, but it can also be a double edged sword. Many choose to distance themselves from deals and partners who have been accused of wrongdoing, for fear of being judged guilty by association. For example, mobile phone company Three temporarily suspended their sponsorship of Chelsea after then-owner Roman Abramovich was sanctioned by the UK government in the midst of Russia’s invasion of Ukraine. Nike were of course involved as Chelsea's technical sponsor, but did not alter their sponsorship agreement with the London club at any stage of proceedings.

Nike's Current Relationship with Barcelona

Overall, the 25 year partnership has definitely be a success for both club and brand. Nike have not yet commented on the current Barcelona scandal, and despite all of the money both parties have made together since 1998, relations between the two have been somewhat strained in recent years. Nike reportedly did Barcelona a favour in 2016 by giving them cash up front to help them to fund certain objectives. A contract extension that would take them up to 2028 was also announced in 2016 and due to be signed in 2018, but disagreements on how to split profits led to delays, then the Covid pandemic put another spanner in the works.

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It was reported in 2021 that Nike felt they were over-paying Barcelona. According to Marca, the basic deal costs Nike €105 million per season, with a maximum value of €155 million, dependent on variables. There are conflicting reports of the current contract situation, with some sources stating it runs until 2023, while others say 2028, and some sources claim there has been no concrete deal in place since 2016, which has created tension.

A couple of weeks ago it also emerged that Nike were allegedly putting pressure on Barcelona to find a “Messi replacement” for the much-vaunted number 10 shirt, with current occupant Ansu Fati having lost form and fallen out of the limelight. From a commercial point of view, not having a star in the famous jersey is far from optimal for Nike. Messi was a marketing phenomenon who will not be replicated at Barcelona any time soon, but Nike still feel its necessary to have a star player in the number 10 shirt.

The Verdict

With all of these elements at play, the referee payment scandal will give Nike food for thought. Their course of action will most likely depend on the outcome of the investigation, which will continue for some time still. While the allegations alone are damaging, if Barcelona are cleared of any wrongdoing, it seems unlikely that Nike would end their partnership as a direct result of the case. On the other hand, a guilty verdict and a hefty punishment could make the Swoosh rethink their association with the club.

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This is all just speculation for now, and we don’t expect to hear anything from Nike on the matter anytime soon. Nonetheless, at some point they will have to think about the future between themselves and Barcelona and they will have to take the scandal into account along with everything else when deciding how to proceed. They will surely be contemplating the implications of all of this, the most important of which are the financial ones. How much money do they stand to make/lose by dropping/sticking with Barcelona? How will their decision impact the brand’s image? Could the virtuous choice make them more money in the long run by creating a perception that they are a brand with real sporting values?

What's your take on the situation? Do you think the referee payments scandal could lead to Nike cutting ties with Barcelona? Let us know your thoughts in the comments.