tadashi-ishii
Dentsu CEO Tadashi Ishii
Dentsu is a $15 billion company, with a 25% share of the Japanese advertising market. It’s #1 in Japan, but not dominant, at least in terms of revenue. That’s fine, because Japanese companies, even large ones, don’t like to draw too much attention to themselves.

And yet, you can argue that Dentsu has become one of the most influential sports marketing companies in the world. Currently, Dentsu represents Tokyo2020 as exclusive agent to secure Japan sponsors for the upcoming 2020 Summer Games, signing up over 40 sponsors. It represents such international sports agencies as the International Association of Athletics Federation (IAAF), the International Football Association (FIFA), the International Swimming Federation (FINA), the International Volleyball Federation (FIVB), as well as the United States Olympic Committee (USOC), among many other sports organizations.

As sports marketing authority, David Cushnan, once told me, “if you are an international sports federation, or an international sports league that wants to go to Japan, then your first call is Dentsu. They can get you access.”

And as the Financial Times puts it, once you’re a client, they are so powerful it’s sometimes hard to tell who the client is. “It is not like any company in the world,” says a board member at one of Dentsu’s biggest clients. “You are the customer, but they are the master. Nobody ever says it, but over the years, you need them more than they need you. It is like an addiction.”

Dentsu may be glad to see 2016 over, however, as it was a tough year, nearly impossible to avoid the glare of the red-hot spotlight.

  • Black Tidings and AMS: In May, 2016, The British newspaper, The Guardian, revealed that a USD1.5 million payment was made in July, 2013 from a Japanese bank to an account with a person in a company called Athlete Management Services, affiliated with both the IAAF and Dentsu. This payment was prior to the vote for selection of the 2020 Olympic host city. After Tokyo was selected as the winning city in September, 2013, a second payment was made to the same account for another USD2 million.
  • Caught Overbilling: Toyota raised an alarm that they suspected Dentsu, hiding behind a notorious curtain of opaque transactional costs for online advertising, was overcharging them for ad placements. They were right. Not only that, over a 100 other companies were cheated as well, resulting in an announcement in late September, 2016 that Dentsu will reimburse an estimated 230 million yen ($2.3 million) back to customers.
  • Working Employees to the Extreme: Dentsu recently received the odious recognition being labeled the worst of the “Black Companies” in Japan. A “Black Company” in Japan is one considered a firm that blatantly exploits its employees. Much of this recognition was due to the horrible news that a first-year employee at Dentsu committed suicide. According to this article, the 24-year old woman, Matsuri Takahashi, jumped from the top of her company dormitory on Christmas Day in 2015, after working 100 hours of overtime the previous month.

Apparently, the notoriety around being considered a horrible place to work was the last straw. Dentsu’s president, Tadashi Ishii, announced last week that he would resign in March, 2017.

matsuri-takahashi-and-parents
Matsuri Takahashi and parents
FIFA Official arrested
One of the seven FIFA officials arrested walks from the Baur du Lac hotel following a dawn police raid_New York Times

FIFA, the world organizing body for football, and famously the organizer of the World Cup, is based in Zurich, Switzerland. But when authorities quietly escorted 7 FIFA executives out of a posh hotel in Zurich where a FIFA executive meeting was being held in May, 2015, it was due to the work of the FBI in the United States. I thought, “Wow”, that’s influence. Why is the US driving this and not another country, perhaps one more steeped in football lore where the loss of purity in sport would rankle more deeply.

I’m still not clear on this, but according to this thorough and fascinating piece from ESPN, the roots of the investigation that led to arrests at FIFA began in an FBI Bureau in Brooklyn, New York. When FIFA announced in December, 2010 that not only did Russia win the right to host the 2018 World Cup, but that Qatar won that honor as well for 2022, suspicions ran particularly high that something fishy was up.

As the article explains, “even the laziest ExCo members lived like kings. They each received $200,000 annual stipends, along with liberal per diems every time they went to Zurich. And they controlled the votes that decided where the most watched event in sports, the World Cup, would be played. This selection process seemed engineered for bribery, the FBI agents thought.”

Chuck Blazer with FIFA head Sepp Blatter
Chuck Blazer and Sepp Blatter in better days.

The FBI first focused their attention on a member of the FIFA ExCo who happened to be based in New York, Chuck Blazer. He’s a large man, whom Russian President Vladimir Putin joked looked like Karl Marx, and was so caught up in cloak-and-dagger, stab-you-in-the-back FIFA politics, and so sick from the ravages of diabetes and cancer, that he turned. Blazer became the FBI’s inside man, recording conversations with other FIFA leaders for over a year, providing a “wealth of information” on the inner workings of a scandalous organization.

Another primer for the FIFA scandal is this piece from 60 Minutes, which features the lead FBI investigator John Burretta, as well as the long-standing thorn in the side of FIFA and the IOC, BBC journalist Andrew Jennings. Jennings’ talk on corruption in FIFA had fallen on deaf ears for years before he finally found redemption in these arrests.

John Burretta on 60 Minutes

Of all the things I learned, here’s the bit that got me. Not only did Blazer live in the luxurious Trump Tower (rent $18,000 a month), he had a smaller apartment next door, “reportedly for his cats”.