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Is a sponsorship deal an endorsement?
Peter Etherington explores the line between football teams and their sponsors
Are football club sponsorship deals an endorsement of a product or service or just a cold, hard coin grab?
This question was raised by Bromley Football Club’s recent stadium naming deal with a property investment company.
The company in question is a startup venture that offers punters a guaranteed, and very sizeable, return on their investment. Sign up today and you’ll more than double your money in a year, and you’ll get your original investment back.
Before you rush off to get your cheque book, you might want to do a bit of due diligence.
Or do you? At a recent fans’ forum, when questioned about the stadium sponsorship deal, Bromley owner Robin Stanton-Gleaves implied that the club had done its due diligence where this company was concerned. A ringing endorsement then? Go get the cheque book.
As a word of caution, it’s worth noting that the club’s new stadium sponsors aren’t registered with the Financial Conduct Authority, so there’s no safety net if things go wrong. In fact, the FCA website states that one of the warning signs of an investment scam is a company offering returns that seem too good to be true.
Does that mean this is an investment scam? No. A Ponzi scheme? No. Should you do your research and get some independent professional advice before diving in? Yes. Emphatically, yes.
For an example of why due diligence is important, look no further than a previous sponsor of Bromley Football Club, Buy2LetCars.
(I stress that the following example of an investment scheme that turned sour bears no relation to Bromley’s new stadium sponsor. There is no crossover between the two companies in terms of personnel or business model, and I cast no aspersions on their integrity. The sole remit of this article is to remind readers to thoroughly research any investment they plan to make. I’m sure the company in question would agree with that sentiment.)
“Bromley Football Club are delighted to welcome Buy2LetCars as our new main sponsors.” This was the opening line of a 2016 press release celebrating a “fantastic opportunity.”
The club even went so far as to share the company’s sales pitch, offering almost guaranteed returns of up to 11% per annum. Fast forward to early 2021 and Buy2LetCars were being shut down by the Serious Fraud Office. Its owners, meanwhile, were being treated to a guided tour of their local prison cells.
City watchdogs are still trying to make sense of it all, but the bottom line is millions of pounds have gone up in smoke and thousands of investors have lost money. A lot of money in many cases. To compound the confusion, while Buy2LetCars weren’t regulated by the FCA, its parent company Raedex Consortium Limited were. This has plunged investors into a finger-pointing legal purgatory from which they may never escape.
Valiant attempts are being made to recover investors' money, but the complexity of the case means that reparations, if there are any, may be years away.
It is important to note that the investors who lost money weren’t city slickers. In fact, thanks to the trust gained by the sponsorship deal, many of the people stung by the scam were Bromley fans. That’s right, we’re not talking about Gordon Gekko here. We’re talking about people like you and me. And my dad.
He was a lorry driver who heard about Buy2LetCars through an advert in the local paper. Like a lot of people, he was growing frustrated with the lack of return on his Premium Bonds and watching his pension pot dwindle. A Buy2LetCars investment seemed like the perfect opportunity to reverse that.
West Wickham-based company. Guaranteed returns. Football club sponsorship. It all seemed so legitimate.
His first investment returned exactly the kind of profit the company had promised. Clearly, this was a sure thing. So he invested more. And more. And eventually, his retirement fund was sitting in their bank account. You know what happened next.
Some commentators have suggested that Buy2LetCars was a legitimate enterprise to start with. But the Serious Fraud Office allege that, as the company grew, new investors’ money was being used to pay old investors’ dividends. In other words, it was a Ponzi scheme. Whether it became one on purpose is another matter.
‘Thousands of investors’ are an abstract concept until you know one of them. In retrospect, my dad and his fellow investors were naive to get involved with an unregulated company. But, until the bubble burst, they had no reason to think they’d made a bad decision. I can only imagine the anguish and sleepless nights caused by the collapse.
To compound matters, not long after the investigation into the dealings of Buy2LetCars got underway, my dad received a diagnosis of terminal cancer. Sorry to spring that on you out of the blue, but it is what it is.
Research into the links between stress and cancer has provided tenuous results, so it’s unlikely that Buy2LetCars conjured my dad’s malignant cells. But it certainly made his situation all the more heartbreaking. Suddenly, the retirement fund he’d invested with these cowboys had become an inheritance for his children and grandchildren; an inheritance they would likely never see.
During what remained of his life, my dad bravely made peace with his situation, financial and physical. He was buoyed by the efforts being made to recover the money, and it gave him hope that there might be a happy ending in the years after his passing. While I’m not holding my breath, I’m glad it gave him comfort.
My dad passed away this month at the age of 66. He and his outsized personality will be very sorely missed by all who knew him. But he’d want me to carry on being wry and vaguely entertaining, so here goes.
Bromley Football Club did not give my dad cancer. There’s a sentence I never thought I’d write. But where does the buck stop with sports teams and their sponsors? Do they have a case to answer when they promote a company whose product does harm?
British football banned alcohol advertising because of its known side effects: unearned confidence and karaoke. But if that brand happens to have an alcohol-free version, they can advertise with impunity. Having tasted them, I suspect big brands only make a 0.0% product so they can carry on advertising at the football. Budweiser’s penny-flavoured rice water is particularly suspicious.
But if you thought people’s health was the line in the sand, pitch-side adverts for sugar-laden drinks and fast food ‘restaurants’ suggest this isn’t the case. We’re all adults here, we know that stuff is bad for us, but (Helen Lovejoy voice) “won’t somebody please think of the children!”
The ban on alcohol and cigarette advertising was aimed at improving the health of the nation and protecting children from ever looking cool. But unless you ban junk food advertising as well, the message merely morphs into an ode to diabetes. Don’t lose a lung, kids, lose a limb.
Then, somewhat inevitably, we arrive at gambling sponsorships. Tunic-toting Romans were betting on gladiatorial contests long before Ray Winstone’s meaty head was floating around on our screens. But while gambling’s golden thread is interwoven with the fabric of football, you could pull the thread without ruining the technicolour dreamcoat. Dare I say, you might actually improve it.
Football has been tugging at the thread of late but can’t bring itself to remove it completely. Many would ask if it really needs to. And with lucrative sponsorship deals on the line, clubs certainly aren’t in a rush to end this marriage of convenience.
Almost every top-tier club has hopped into bed with a ‘gambling partner.’ We’ve all been there. But the open door policy has led to some questionable shirt sponsorships from gambling firms in the Far East. These firms aren’t targeting our tiny isle, they’re targeting the billions of gambling fanatics in their home market (where it’s illegal to gamble - go figure).
In their rush to reap revenue, football clubs let it all get a bit weird. This might explain why, earlier this year, the bigwigs at the Premier League announced a ban on gambling sponsors on the front of shirts from the 2026-2027 season onwards. Gambling firms will still be able to hawk their wares on shirt sleeves and hoardings, but a slapdash line has been drawn.
Is this a move to improve the health of the nation, or has the influx of funny money spooked the top brass? When you follow the ownership threads of these Far Eastern gambling companies, it gets very murky indeed. In fact, when Manchester City announced the deal with their Asian gambling partner in 2022, it turned out that the firm didn’t actually exist yet. Suddenly, our concerns about fast food and sugary drink advertising seem a bit tame.
Gambling can be fun. Gambling can make you rich. Gambling can ruin lives. Replace the word ‘gambling’ with ‘investment schemes’ and you’ve reached the crux of my article.
This was driven home by the recent collapse of Football Index, a hybrid investment and gambling company. Thousands of football fans invested in this fly-by-night firm, only to see their money wiped out in a matter of hours when the company imploded. The resulting financial ruin has taken some investors to the brink of suicide.
Yet, until the bubble burst, Football Index was the main shirt sponsor of Nottingham Forest and Queens Park Rangers. Once again, it all seemed so legitimate.
Will we see the day when someone sues a football club for their endorsement of a product or service that harms them? It seems unlikely.
When a club agrees on a sponsorship deal, they essentially become a billboard for that company. Suing the club would be like suing your local bus stop for having once displayed a Northern Rock poster. But bus stops rarely pop up on your social media feed selling you the dream (unless you follow some very niche accounts).
Are investment schemes any different to the gambling firms that football is pretending to distance itself from? What’s the difference between an investor and a gambler anyway? They both need to be reminded not to bet more than they can afford to lose.
Or is this melodrama just another case of nanny state nonsense? Can’t we trust our fellow humans to make informed decisions about their health, wealth, and choice of gambling partner?
Ultimately, what you do with your money is your business. But, for my dad’s sake, when it comes to an investment, do your research.
If it sounds too good to be true…
*This article was proudly sponsored by Espresso & Grief.
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