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Wednesday, November 21, 2012
 
Boycotting Corporate Sponsorships?

Extraordinarily interesting news out of England and the Premier League last month:  Several members of the Newcastle United Football club may refuse to wear the corporate logo of Wonga, a short-term, pay day loan company, on their game jerseys because Wonga's company practices are an affront to their religious beliefs.  Newcastle United recently announced a very lucrative corporate sponsorship agreement with Wonga.


Newcastle footballers Demba Ba, Papiss Cisse, Cheick Tiote and Hatem Ben Arfa are all practicing Muslims. "Under Sharia law, Muslims must not benefit from either lending money or receiving money from another person - meaning that interest is prohibited. Interest is not paid on Islamic bank accounts or added to mortgages." Because Wonga is seen by many in the UK, much like pay day loan companies in the United States, as established to prey on the poor and the unbanked, Ba, Cisse, Tiote and Ben Arfa may refuse to promote its practices by refusing to display the Wonga logo on their jerseys.

From the story in the Daily Mail:  "Shaykh Ibrahim Mogra, assistant secretary general of the Muslim Council of Britain, told The Independent: 'There are two aspects to this. We have the rulings of the religious law and we have the individual’s choice and decision on how they want to follow or not follow that rule. 'The idea is to protect the vulnerable and the needy from exploitation by the rich and powerful.' 'When they [Wonga] are lending and are charging large amounts of interest, it means the poor will have short-term benefit from the loan but long-term difficulty in paying it back because the rate of interest is not something they can keep up with. The Islamic system is based on a non-interest-based system of transaction.'"

Demba Ba and Papiss Cisse
In fact, on some short-term loans, Wonga charges an interest rate that would annually exceed 4,000%. "Should a Newcastle fan accept a loan to buy a £50 club shirt, they would have to repay £71.92 after a month with a rate equivalent to 4,212 per cent per year."  Local politicians in Newcastle were aghast to learn that Newcastle United had partnered with a corporate sponsor such as Wonga: "Nick Forbes, the leader of Newcastle City Council, said: 'I’m appalled and sickened that they would sign a deal with a legal loan shark. It’s a sad indictment of the profit-at-any-price culture at Newcastle United. We are fighting hard to tackle legal and illegal loan sharking and having a company like this right across the city on every football shirt that’s sold undermines all our work.'"

Boycotting a corporate sponsor would be deemed a hugely controversial move in the United States. In fact, the activist athlete has been discussed on the Sports Law Blog many times over the years, and has seemed to be in decline since the advent of the corporate endorsement and the potential to profit in the dozens of millions of dollars. That said, there appears to have been a rise in athlete activism in recent months . . . .





9 Comments:

I hope these guys stand their ground...if they refused to play in the shirts, the club would have a strong position that wearing the shirt is just a condition of the workplace that the employer has great discretion in mandating. If this were in America, the players should claim the First Amendment prohibits the club from compelling them to promote something that crosses their religious beliefs. Don't know if that would fly in the UK though.

Blogger baldwin.nate -- 11/29/2012 12:00 AM  


I think the interesting part will be whether the team executives (who presumably brokered the deal)will side with the players or whether they will side with the one writing them what i'm sure is a hefty check each month.

Also, I wonder if the company would exempt them for religious reasons in order to steer clear of bad press?

Anonymous J. Kaiser -- 11/29/2012 8:48 PM  


While it is quite refreshing to see these four players take the activist athlete position that they have (particularly Ba who is the leagues third leading scorer and Cisse who nearly helped the club to a top four finish last season), this is a unique case that I do not believe we will see repeated in the United States. Currently, in this country, no jersey in any of the four major sports leagues has a corporate sponsor on it, more or less one covering a large portion of the jersey’s front like those in the English Premier League. Without a club forcing its players to wear what is effectively an advertisement of an unfavorable company, I do not see the issue arising.

Also, corporate sponsors and the companies that often employ athletes to sponsor their individual products are usually not the same. For example, the Carolina Panthers sold their stadium’s naming rights to Bank of America while Cam Newton has sponsorship deals with the likes of Gatorade and Under Armour. Unless this changes, I do not see athletes standing up against the typical corporate sponsor anytime soon.

Note it appears that the NBA will have corporate sponsors on jerseys in 2013-14 so this same situation may be possible next season.

Jordan J


Blogger Jordan Jones -- 11/30/2012 12:06 AM  


While it is quite refreshing to see these four players take the activist athlete position that they have (particularly Ba who is the leagues third leading scorer and Cisse who nearly helped the club to a top four finish last season), this is a unique case that I do not believe we will see repeated in the United States. Currently, in this country, no jersey in any of the four major sports leagues has a corporate sponsor on it, more or less one covering a large portion of the jersey’s front like those in the English Premier League. Without a club forcing its players to wear what is effectively an advertisement of an unfavorable company, I do not see the issue arising.

Also, corporate sponsors and the companies that often employ athletes to sponsor their individual products are usually not the same. For example, the Carolina Panthers sold their stadium’s naming rights to Bank of America while Cam Newton has sponsorship deals with the likes of Gatorade and Under Armour. Unless this changes, I do not see athletes standing up against the typical corporate sponsor anytime soon.

Note it appears that the NBA will have corporate sponsors on jerseys in 2013-14 so this same situation may be possible next season.

Jordan J

Anonymous Anonymous -- 11/30/2012 12:08 AM  


I think this is a preview of coming attractions in America. Recently, the NBA has started putting corporate logos on practice and other non-competition jerseys. How long until we have the same situation in Memphis or L.A.?

What I am interested to see is how this situation plays out on this side of the pond. American sports, now more than ever, are reliant on corporate sponsors. The American people also have an obsession with the First Amendment.

While the two issues (Free Speech and corporate sponsorship in a bargained-for employment agreement) may not actually be in opposition to one another, I think we will soon see the two issues come to a head in the media.

Blogger atk001 -- 11/30/2012 1:28 PM  


I think this is a preview of coming attractions in America. Recently, the NBA has started putting corporate logos on practice and other non-competition jerseys. How long until we have the same situation in Memphis or L.A.?
What I am interested to see is how this situation plays out on this side of the pond. American sports, now more than ever, are reliant on corporate sponsors. The American people also have an obsession with the First Amendment.
While the two issues (Free Speech and corporate sponsorship in a bargained-for employment agreement) may not actually be in opposition to one another, I think we will soon see the two issues come to a head in the media.

Blogger atk001 -- 11/30/2012 2:13 PM  


I think this is a fantastic demonstration of athletes taking a "political stand" for personal beliefs. These companies exist exclusively to capitalize on uneducated people who are desperate just to pay bills on time. The business model, as far as I'm concerned, is a complete sham used to hurt a demographic who quite sincerely "doesn't know any better." I applaud these players for forcing their teams to do something about this, it will be interesting to see what that exactly that something will be.

Though there may not be a typical equivalent American "team" sport that relies on corporate sponsorship, there are certainly American athletes that largely rely on corporate funds. Nascar, golf, tennis, extreme sports are some examples of sports that rely heavily on these types of sponsors. I hope that these athletes take note, and take it upon themselves to be socially responsible in regards to the companies from which they accept funds. As they are in a particular demographic that is largely watched and could make a huge impact on how companies conduct business.

Anonymous B.Furr -- 11/30/2012 2:18 PM  


Mr. Kaiser - With as much money as they're paying to be on the shirt, I cannot imagine Wonga would be happy to have some players not wearing the logo...especially because the most visibility for the logos comes when the tv cameras zoom in on the player after he scores, and all the players involved are goalscorers. But since Wonga has already gotten bad press because of this, it might be worthwhile for them to cut their losses and compromise. I would love to know if the sponsorship contract anticipated this.

Mr. J - I agree that drama like this is a big reason why American teams rarely mess around with advertising on jerseys. I didn't know about the NBA's plan, but I recall that Philadelphia's MLS team got criticized for striking a shirt deal with a Mexican-based snacks company called "Bimbo", which presumably doesn't have a chauvinist connotation in Spanish. But that blew over.

Blogger baldwin.nate -- 11/30/2012 3:42 PM  


The first thing that struck me reading this article was how mad the loan company must be. I could imagine they are attempting a find a way to void the contract as I’m sure it requires all team members to wear the logo.
Further, I could imagine they want this to disappear as quickly as possible. This is nothing but bad press for their company and they are being exposed for charging extremely high interest rates.

Stapleton

Anonymous Matt Stapleton -- 12/06/2012 6:57 PM  


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