Game over for gambling sponsors

Lucrative sponsorship deals between Premier League football clubs and online gaming companies in the UK could become a thing of the past after the Gambling Commission last week confirmed it would investigate whether the partnerships encouraged children to gamble.

The commission will explore whether new laws, set to come into force next September under the UK Gambling Act, should extend to shirt sponsorship after a raft of online gaming companies entered the market. The decision follows a debate on internet gambling in the House of Commons, in which sports minister Richard Caborn admitted to concerns over advertising on football shirts and the sponsorship of football clubs.

Growth area
The demand from internet betting businesses has fuelled huge growth in the football sponsorship market. The total value of Premiership shirt sponsorship deals is set to hit £70m a year next season – up 25% from this season and tenfold since the league’s inaugural season in 1992-93, according to Brand Rapport. Earlier this year, Tottenham Hotspur signed a four-year, £34m deal with Gibraltar-based betting group Mansion after Manchester United pulled out of talks with the company. Aston Villa also recently signed a deal with 32Red, while and sponsor Middlesbrough and Blackburn Rovers respectively.

However, with these companies now facing similar bans to those recently imposed on their tobacco counterparts, the football sponsorship industry is staring at an uncertain future. The decision also comes as a further blow for internet gambling companies that are already suffering from a decision to ban all activity in the US.

Ardi Kolah, chief strategy officer of sports marketing agency Prism, thinks the probe will force online gaming brands to evaluate how to use sponsorship more effectively and think before rushing into football. “It can seriously damage a brand’s reputation if the communication message to support the sponsorship is misdirected,” says Kolah. He also believes that because football teams attract significant interest from children, there is an element of “wastage” in sponsorship tie-ups with gambling firms that could be channelled into more targeted deals.

According to analysts, it would be the smaller clubs, rather than the likes of Manchester United, that would be hit hardest by the departure of companies from a major sector such as gambling. Last year, Manchester United struck a record £56.5m four-year shirt deal with American International Group (AIG), the world’s largest insurance firm, cutting short a £9m-a-year tie-up with Vodafone in the wake of Malcolm Glazer’s £790m takeover of the club.

Phil Carling, head of football at sports marketing agency Octagon, says Manchester United withdrew from talks with Mansion having recognised the need to win the backing of a “big consumer brand that is comparable to the club’s values and is a global company in terms of reach and magnitude”.

Outside gambling, mobile phone and technology groups have been among the most prominent sponsors in recent years, accounting for three of the four most valuable deals in the 2005-06 season. Last year, Chelsea secured the second largest deal in English football by signing a £50m, five-year contract with Samsung Electronics, while Spanish club Real Madrid struck a £16m-a-year shirt sponsorship deal with Taiwanese mobile operator BenQ Mobile.

Sponsorship commentators argue that it is “unlikely” a similar ban would be imposed on other sponsors, such as drinks brands, given their long-standing associations with the sport. Kolah says that unlike gambling companies – which have simply “ploughed money into UK football”, creating a cluttered market – drinks brands have developed “stronger and more strategic” relationships with premiership clubs, creating a genuine connection with adult football fans.

Kolah adds that there is also a danger over selling replica kits featuring gaming brands to children. “Clubs have to be very cautious about how they go about looking for sponsors and who they bring on-board as they run the risk of attracting the wrong type of media interest,” he says.

The Gambling Commission’s review will force both brands and football clubs to consider the value of existing sponsorship deals as they prepare for an uncertain future.



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