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‘It’s great news for football,’ says chief of British football federation

FIFA President Sepp Blatter said on Tuesday that he will step down as the head of world soccer’s governing body, in the wake of the disclosure last week of U.S. criminal charges against more than a dozen current and former FIFA officials and sports-marketing executives.

Mr. Blatter, who was re-elected on Friday to a fifth term by FIFA’s 209 national associations, said in a news conference that despite the poll, his re-election wasn’t embraced by many and that he would relinquish his role after an extraordinary congress of the organization.

Mr. Blatter’s announcement, which was hailed by many soccer fans and officials around the world, came six days after Swiss law-enforcement officials raided a Zurich hotel and arrested several soccer officials there to attend FIFA’s annual meeting. The arrests were linked to a U.S. indictment of more than a dozen current and former FIFA officials and other executives accused of complicity in alleged corruption over more than two decades.

After his re-election, Mr. Blatter defiantly vowed to lead a renaissance of the body, tarnished by the latest scandal and by years of allegations of corruption and abuse of power.

In a brief, terse appearance on Tuesday, he changed gears.

“What counts most to me is the institution,” Mr. Blatter said, after announcing his plans to step down.

Mr. Blatter has served as president of world soccer’s governing body since 1998, weathering a series of controversies and scandals, including the awarding of the 2022 World Cup to Qatar, a country with scant soccer experience or infrastructure.

While Mr. Blatter had faced down pressure before, in the last week there have been unprecedented calls for boycotts of the World Cup and the creation of a competing event that would include countries in the Americas and Europe that supported Mr. Blatter’s opponent, Jordan’s Prince Ali bin al Hussein, in last week’s election. Mr. Blatter faced the prospect of becoming the man responsible for the collapse of the world’s most popular sporting event.

The U.S. Justice Department didn’t name Mr. Blatter in its indictment of 14 individuals last week. The acting head of the U.S. attorney’s office in Brooklyn, which is leading the case, said last week’s arrests in Zurich marked the “beginning” of the effort rather than the end.

Prosecutors are expected to enter a second stage of the probe as they work to extradite some of the arrested defendants and try to persuade them to give information to help the U.S. pursue others, according to law-enforcement officials.

Prosecutors described more than two dozen unnamed co-conspirators in last week’s indictment, ranging from several characterized as “a high-ranking official of FIFA,” to multiple executives at three unnamed sports marketing companies. U.S. law-enforcement officials said Jérôme Valcke, FIFA’s general secretary, authorized $10 million in payments from FIFA bank accounts to a Caribbean soccer federation in 2008. The indictment alleges those funds ultimately served as bribes to buy votes for South Africa’s selection to host the 2010 World Cup.

The U.S. indictment has set off a cascade of other legal actions. Swiss authorities are investigating possible bribery in the selection of Russia and Qatar as World Cup hosts. On Tuesday Brazil’s Federal Police asked the country’s prosecutors to indict the former head of the Brazilian soccer confederation, Ricardo Teixeira, as well as Sandro Rosell, the former president of FC Barcelona, one of the world’s most popular soccer clubs.

The allegations against Mr. Teixeira include money laundering and tax evasion, according to a person close to the investigation, who said Mr. Rosell faced allegations of presenting false documents and concealing information. Neither Mr. Teixeira nor Mr. Rosell, nor representatives of either man, could be immediately reached to comment.

FIFA statutes require at least four months before a new election can be held. The body’s 24-member executive committee will schedule a vote between December and March, Mr. Blatter said, adding he would remain in office in the interim.

The head of FIFA’s audit and compliance committee, Domenico Scala, taking the microphone after Mr. Blatter announced his decision to step down, said the group would embark on a wide-ranging reform effort in the wake of the scandal.

“Now it is the time for FIFA to move forward,” Mr. Scala said. “There is significant work to be done in order to regain the trust of the public and to fundamentally reform the way people see FIFA.”

Mr. Blatter’s departure will mark the end of a long, formative chapter of FIFA’s history. A former watch executive and general secretary of the Swiss Ice Hockey Federation, he joined FIFA in 1975 as technical director, working alongside the man who would be his mentor, FIFA President João Havelange of Brazil.

Mr. Blatter spent the next two decades forging ties with member associations all over the world. He understood that the game’s global popularity—and the reach of FIFA’s jewel, the World Cup—was transforming its power structure.

In 1998, Mr. Blatter beat the president of the European soccer confederation in the election for FIFA’s top job, buoyed by support from Africa, South America and other parts of the developing world.

Mr. Blatter immediately set about building FIFA’s biggest financial assistance mechanisms. Today, nearly every association on the planet, from Canada to Fiji, can count on at least $500,000 a year in direct funding from FIFA.

Mr. Blatter also oversaw the growth of the World Cup into a multibillion-dollar cash cow and the primary source of FIFA’s revenue. During the 2011-14 cycle, it generated $5.72 billion of revenue, according to FIFA’s most recently published financial results. The Swiss-based nonprofit is also sitting on $1.52 billion of cash reserves.

Throughout the growth however, FIFA was plagued by scandal, especially since December 2010, when FIFA’s executive committee stunned the world and voted to give hosting rights to the 2022 World Cup to the tiny emirate Qatar over the U.S., Japan and Australia, despite summertime temperatures of 120 degrees.

Reactions to Mr. Blatter’s announcement poured in from around the world.

“It was a difficult decision, a brave decision, and the right decision,” said Michel Platini, head of the Union of European Football Associations and a vocal critic of Mr. Blatter.

“The announcement today is a positive step for the good of sport, football and its fans,” Coca-Cola, a long-time FIFA sponsor, said. “We believe this decision will help FIFA transform itself rapidly into a much-needed 21st century structure and institution.’’ Adidas AG, another key sponsor, said it “welcomes FIFA’s commitment to change.”

U.S. Soccer President Sunil Gulati, a member of FIFA’s executive committee who opposed Mr. Blatter’s re-election, called the announcement an “exceptional and immediate opportunity for positive change within FIFA.I commend him for making a decision that puts FIFA and the sport we love above all other interests.”

“Today is an occasion for optimism and belief for everyone who shares a passion for our game,” Mr. Gulati added.

German Justice Minister Heiko Maas, who spoke out in recent days urging Mr. Blatter to resign, said Tuesday’s move “can only be a first step toward clearing things up and starting anew.”

“Fans should no longer pay for the FIFA quagmire,” Mr. Maas said on Twitter.

Greg Dyke, chairman of the Football Association, the governing body for soccer in England, told the BBC Mr. Blatter’s resignation was “great news” and long overdue.

“Clearly there is something that has come out of the events of last week that has made Mr. Blatter stand down, and one can only assume that is to do with the investigation either by the Swiss justice authorities or by the attorney general of America,” Mr. Dyke said.

“But if you’re in football, forget that—he’s gone, we’re going to get someone else, and at long last we can sort out FIFA,” he said. “We can go back to look at those two world cups. If I was in Qatar today I wouldn’t be feeling too confident.”