When sports sponsorship goes terribly wrong

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When sports sponsorship goes terribly wrong

The Six Nations is underway and the alcohol/sports love affair seeps again into rugby, with a shiny new title partner, Guinness. What are the risks of such a big sponsorship deal and what happens if it all goes wrong?

The Six Nations, previously sponsored by RBS between 2004 and 2017 and, before that, Lloyds TSB between 1999 and 2003, has a new title partner in Guinness for the next six tournaments.

The alcohol and sports love affair continues, as Guinness sponsored The Premiership rugby between 2005 and 2010 and are current sponsors of Pro14.

Big brands like Guinness know how much sponsorship can work in their favour, but this deal could work especially well for them, with the five games finishing the day before St. Patrick’s Day, the infamous Guinness party hats no doubt donned around towns and cities everywhere.

Yet there’s a very real risk of things going wrong for sponsors of all kinds. Whether a brand sponsors a tournament or league, a team or even a single athlete, it affiliates its brand with another entity, essentially putting its entire brand on the line. Let’s look at some of the reasons sporting sponsorships can turn sour.

 

Reputational risk
When a company attaches its brand to a sporting entity, fans can quickly take an immediate dislike to a brand. When Chevrolet sponsored both Manchester United and Liverpool, it created an advert which spliced rival players of the teams saying the same thing. Fans viewed this as a suggestion the two teams were identical. Chevrolet didn’t grasp the weight of this rivalry that is not only one of two clubs but also two cities. Chevrolet were promptly dropped from sponsoring both clubs.

In 2017, airline Qantas came under scrutiny when Australian rugby player, Israel Folau made several anti-gay remarks. Qantas sponsor the national team but considered pulling out as the brand faced backlash, especially since its CEO had ironically won an award on gay rights activism the year before.

 

Health
Constantly under scrutiny is the association McDonald’s has on sport. Sponsors of the Olympic Games for more than 40 years—the oldest partnership in sport—McDonald’s abruptly ended its sponsorship three years early, citing ‘a focus on different business priorities’.

Experts suggest the decision could also be related to campaigns against McDonald’s, with campaigners arguing the Games have become ‘a carnival of junk food marketing’. McDonald’s do remain sponsors of the World Cup, however.

 

Drugs
The most recent Olympic Games faced the Russian doping scandal, so perhaps this also influenced McDonald’s decision. It’s not easy for brands to walk out of competitions they sponsor, but when they sponsor individual players, they are often easier to drop.

Take Lance Armstrong, for example. When news broke that he had been taking performance-enhancing drugs, eight of his sponsors dropped him within 24 hours, reportedly costing Armstrong $75 million in one day. Sportswear company Skins tried to sue the cycling governing body, Union Cycliste Internationale for damage to its brand whilst the US Postal Service successfully sued Armstrong for $5 million for fraud.

 

Gambling
Though little action has been taken against gambling companies so far, brands must be aware of the legal implications their association has and the likelihood and impact of future restrictions. Gambling addiction has seen an unprecedented rise in awareness and the advertising firms have been heavily criticised. Whilst raising awareness of gambling responsibly is a legal requirement on all gambling adverts, the impact of it is still under scrutiny and further restrictions will surely come.

 

Alcohol
As we already mentioned, alcohol and sport has been a love affair for decades, with studies both marketing-related and scientific seemingly reporting very clear links between males, sport and alcohol consumption. Whilst alcohol-related sponsors have faced criticism, they might well be a necessary evil. Last year’s Six Nations might have been without a sponsor had it not been for a cut-price deal with RBS Group. If Guinness hadn’t taken the mantle for the next six years, who would?

Sponsoring a sporting event is seldom straightforward and never without its risks. If you sponsor an event, competition, team or individual players, what is at stake?

Naturally, adequate insurance should be high on your list of priorities and at Full Time Cover, we’re certain we can help. To find out more about the level of cover, benefits and more, get in touch today.