Tag: sports business


Football Clubs: getting the most out of gambling sponsorship 25th September, 2017

There has been a large increase in the amount of betting companies sponsoring football clubs in the top two tiers of English football. And for clubs looking to improve and maybe mount a challenge in their respective leagues, looking for bookies to sponsor your club may actually be step one into doing so. But beware, time is running out, as it is only a matter of time before regulatory bodies intervene.

Betting is now the latest industry to monopolise the sponsorship sector of the footballing world, with match and training kits being sponsored by many gambling companies across the world. However, for clubs and rights holders, your time is running out as authorities will soon put a stop to this, just like in 2003 the Tobacco Advertising and Promotion Act caused tobacco advertisement to be prohibited. 2005 saw the ‘Gambling Act’ passed, allowing domestic and offshore gambling companies to advertise on TV. In 2007, 4 out of the 44 clubs in premier league and championship had kit sponsors pertaining to gambling. Over the years, this figure has dramatically grown, and now out of the 44 clubs in the top two leagues, 22 clubs are sponsored by gambling companies.

The takeover of betting companies

If we take away the top 6 clubs, because they are separate entities from the rest of the top two tiers of English football, over half of the clubs are sponsored by betting companies. Betting companies in 2007 took up just under 10% of the market share or kit sponsors, but 10 years later, it is now at 50%, but what effect does this have on the future of football?

More competition in the Premier League

With the rise of gambling companies, clubs are now able to challenge the top six more than ever before. With an increase in sponsorship money, clubs can inject that money into new players and new infrastructure, giving them a better chance of winning. As a gambling company, sponsoring a club is a win-win. They not only gain more awareness, but if they are giving clubs more money, with the industry spending £47.3 million this causes the gap between the top six and the rest of the Premier League and Championship to shrink as clubs are able to afford more. The quality of players and facilities will improve which makes games much more even, thus containing much more upsets which is beneficial for gambling companies as there is now much more of a chance for favourites to lose.

What does this mean for betting companies, and how to make the most of it?

Football is the largest sport betted on in the world, and with the increase of gambling companies sponsoring football clubs, sports betting will become even more prevalent. With this being said, due to the ethical issues that come with gambling, such as addiction and the breaking up of families, it’s only a matter of time before there is some sort of regulation causing gambling companies to refrain from being the shirt sponsors of clubs in England. Just like with tobacco, gambling advertising in the premier league will become extinct. So in order to get the best out of gambling advertisement, gambling companies need to act now as opposed to in five or ten years’ time.


To Buy or Not To Buy – Michael Jordan & the Cost of Two Coupons 30th October, 2015

Money is almost always a closely guarded secret, whether between friends, business relations or colleagues.

Nowhere is this more prevalent than the world of sports business with undisclosed fees for player transfers and the value of sponsorship deals rarely disclosed, so not to alert others to an inflated bank balance or be extorted for a fee. However, what happens when a company uses rights it has no possession of?

This was the focus of an unusual dispute between Michael Jordan, Safeway and Jordan’s long-term sponsors Nike.

Following Safeway’s unsolicited use of the Michael Jordan name without permission the two recently visited court to settle a proposed $10 million payment from a 2009 infringement.

In 2009 a subsidiary of Safeway’s placed in an advert and coupon incorporating Jordan’s name and Chicago Bulls number within a commemorative Sports Illustrated issue (of which only two were ever redeemed). However Jordan’s lawyers and endorsement history advise that he would not have accepted such a deal. Safeway believed this should be in the region of $126,900, more widely reported as closer to $500,000 from a licencing agreement which MJ held at one point over the last decade.

The argument posed by the athlete is that Jordan name is such a force in the marketing world that this requires a substantial rights fee, something he is keen to reinforce following a statement reporting an income of over $536 million in sponsorship alone from 2000 to 2012.

This is where Nike and other sponsors take interest.

As MJ and his legal team seek to prove how much an organisation typically purchases these rights leading to Judge John Blakely to rule that Nike and other sponsors must divulge their contracts to the court – something that they neither asked for, nor were keen to divulge to their competitors.

Despite being desperate to retain the fiscal anonymity within Michael Jordan’s contract, (a document so closely guarded reportedly only three member of staff have access and it is held in a separate area to all other contractual agreements at the Nike headquarters) the judge ruled this must be shown to the court.
The case is now settled with Safeway ordered to pay $8.6m in rights fees to Jordan, despite Michael expressing “it was never about the money”.

In the world of sponsorship it is always better to acquire those rights than use without permission – who knows it might just save you $8.1m in the long run.


Football clubs and brands: What’s the crucial ingredient for successful sponsorship? 29th September, 2015

When considering what brands to approach for sponsorship, brand values are a crucial ingredient for successful sponsorship. Football clubs, in particular, must be careful when aligning with brands who do not share similar values as the potential reaction to such deals can have far-reaching consequences and usually serve to widen the gap between board and fans. Without these shared values, football club-brand partnerships are susceptible to failure as the following three cases demonstrate.

Newcastle United & Wonga

One of the key issues at the heart of Newcastle fans’ disenchantment with Mike Ashley’s ownership dates back to 2012, when Wonga agreed a four-year £24m sponsorship deal with the club. Despite the brand making a promising start with the fans by returning the stadium name to St James Park as part of the deal, Wonga’s sponsorship of the club never achieved their aim of forging a reputation as a reputable company. As soon as the deal was agreed, the brand received an onslaught of criticism from fans, MPs and media commentators. This was followed by a stinging attack on the brand by the Archbishop of Canterbury in 2013. The following year, Newcastle fans successfully lobbied the brand to remove their logo from children’s replica kits. Finally, during the climax of the 2015 league season, Wonga’s £40m financial losses were openly celebrated by fans on social media which capped a bad year for the brand when PR and branding agency, Aberfield Communications, labelled them the worst for fan engagement in the Premier League.

For sponsorship to be successful, both parties must have shared values. In Newcastle and Wonga’s case, it is clear the brand values of both organisations diverge significantly. Newcastle United is known for its ambition and integrity coupled with a passionate, loyal fan base. Wonga, on the other hand, has encountered numerous controversies since its incorporation in 2006 including the chasing of customers with fake law firms and targeting vulnerable individuals with high-interest short-term loans. Positive initiatives such as investment in the club’s academy and free ticket giveaways on Twitter have consequently not swayed fans towards a positive perception of the brand.

Bolton Wanderers & Quickquid

Another football club that has encountered issues with their shirt sponsor in recent years is Bolton Wanderers who signed a sponsorship deal with payday lender Quikquid in May 2013. However, by June 2013 the deal was terminated.

The £500K shirt deal almost immediately came under scrutiny from fans, who managed to amass 1900 signatures for a petition objecting to the deal. Their objections were upheld when the club decided to renege on the deal after a month. Bolton South East MP, Yasmin Qureshi, commented at the time: “It’s completely wrong. These companies prey on the vulnerable and they should be illegal.” After a month of backlash, the Bolton Wanderers board succumbed with technology firm Fibrlec eventually replacing the payday lenders on the front of the club’s shirt. Labour MPs Chris Evans and Stella Creasy applauded the move with fans agreeing that the sponsorship was not in keeping with Wanderer’s image as a community-based “family club”.

Bolton’s response to criticism of the deal differs markedly from Newcastle United, who, despite receiving a backlash over the Wonga deal, kept the brand as sponsor despite the unpopularity with fans. In Bolton’s case, the Quickquid sponsorship failed not only because of a lack of shared values, but the sum involved was low enough to prompt the board into action. If it had been worth the seven-figure sum as in Newcastle’s case, the deal most likely would have had greater success.

FC Barcelona & Qatar Foundation

In 2010, FC Barcelona agreed their first ever corporate shirt sponsor by signing a £25m 5-year deal with the Qatar Foundation. The deal was signed amid a period in which Barcelona’s debt had climbed to £370m, necessitating a deal that was the most lucrative shirt sponsorship in football history at the time. Despite the Qatar Foundation’s commitment to education rights in the Middle East as a non-profit body, the sponsorship was met with opposition. FC Barcelona fans accused the club of “selling the shirt” which had refused revenue from a corporate shirt sponsor for 113 years. Qatar still remains on the shirt today but as Qatar Airways, following an activation of a clause in the sponsorship agreement. However, its presence divides opinion. Sandro Rosell, the former President who signed the deal, resigned in 2013 partially as a result of its unpopularity.

The Barcelona-Qatar relationship had all the hallmarks of a successful sponsorship, yet, this never occurred. Despite the Qatar Foundation’s commitment to a virtuous cause, the association with Qatar, an absolutist monarchy, contrasts with the “People’s Club” philosophy. This refers to the fact Barcelona is a democratic club, owned by the fans, who are used to voting on key decisions, unlike employees from the Qatar Foundation. Furthermore, the association with Qatar’s unpopular World Cup bid was another factor that did not help foster a positive relationship.

The success of football club sponsorship is underpinned by strong shared values. Therefore, clubs must consider a brand or organisation’s past history and organisational makeup when searching for sponsorship. Regardless of whether a brand’s future activities have sound principles, past associations and controversies will skew fan and media perception. As a result, it is imperative they work with fan groups to negate any issues that may arise from pursuing deals with controversial sponsors.

@SimonBinks_