Potential Negative Outcomes from Sponsorship for a Sport Property John L

Managing Leisure, 2014 http://dx.doi.org/10.1080/13606719.2014.912050

Potential negative outcomes from sponsorship for a sport property John L. Crompton Department of Recreation, Park and Tourism Sciences, Texas A&M University, College Station, TX, USA

Sponsorship funding has become a staple source of revenues for many sport events, but there are two types of potentially negative outcomes for properties that may be associated with it: operational risk and reputational risk. Operational risk occurs when sponsors insist on changing the rules or format of the event, or when they exercise undue inﬂuence on its content, timing, location or participants. The primary source of reputational risk is increased public sensitivity to the negative health impacts of some product categories, most prominently those of tobacco, alcohol, gambling and products that are high in fat, salt or sugar that may make it contentious for a sport property to partner with companies in these product classes. Similar controversy from public sensitivity may emerge around issues of corporate social responsibility, as expectations grow regarding the impact of a company’s actions on society. Reputational risk also may emanate from over-commercialization of an event, since this may erode “fan equity”, i.e. the passion of fans who traditionally have supported it.

Keywords: sponsorship, operational risk, reputational risk, tobacco, alcohol, gambling, junk food, corporate social responsibility

INTRODUCTION property, or from erosion of “fan equity” caused by over-commercialization. In these When sport organizations accept sponsors’ cases the risk is that clienteles become disillu- resources, they implicitly may be giving up sioned with a property’s behavior so their some control over their event. This may support is gradually withdrawn. result in negative outcomes to the property that were not anticipated when the agreement was signed. This paper reviews the OPERATIONAL RISKS two types of potential negative outcomes that may occur to a sport organization from Changes in a Sport’s Format or Rules Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 a sponsorship agreement: operational risk In return for their support, sponsors may and reputational risk. Operational risk is insist on changing the sporting event so the likely to be the primary focus in the short very nature of the sport is altered. There is a term and result from either change in a well-known aphorism that says those who sport’s format or rules, or undue inﬂuence pay the piper call the tune. Changes may be by sponsors on organizations or events. implemented to make a sporting event more Reputational risk is a longer-term concern exciting, entertaining and attractive, especially emanating either from negative connotations to television audiences. Tennis is an example or controversies associated with sponsors of this type of inﬂuence. The method of that may impugn the reputation of the sport scoring was changed by the introduction of

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sudden death tiebreakers to shorten matches embraced rule changes for similar reasons and make them more interesting, while the tra- with the formation of the National Indoor ditional white apparel was replaced by multi- Lacrosse League in North America. In order colored outfits for the same reason. to increase goal-scoring opportunities, the It may be argued that these changes are net was widened by six inches and the media, rather than sponsor-driven. number of penalties reduced, as compared However, the distinction really is arbitrary to traditional box-style lacrosse (Berrett, and without meaning, because a central 1993). issue in negotiations between a potential For the most part, these changes have been sponsor and a sport property is likely to be successful in attracting new and wider audi- the probable extent of the event’s media cov- ences for their sports. Ostensibly, this is a erage, since this is a major component in the positive development for both the sport prop- leverage of a sponsorship platform. If a erties and sponsors. However, radical sponsor is seeking increased brand aware- changes to the rules and formats of sports ness or image transfer benefits, then a key that have a hallowed heritage stretching to receiving them is the extent, and the back for over a century, inevitably offends quality, of visibility of the sponsor’s brand some traditionalists. They are often the with the sport property. Thus, it is likely central core of a sport’s supporters whose that a sponsor will seek to maximize media deep passion for it makes them prime candi- coverage before committing an investment. dates for companies seeking enhanced The growth of one-day (50-over) and half- brand equity by securing image transfer day (20-over) cricket matches in national from a sport property. The more a target audi- and international competitions was fostered ence feels a sense of gratitude to a company by their ability to accommodate the believing that its support contributes to demands of television audiences who their enjoyment, the greater the likelihood wanted to see an immediate and definite sales increases will accrue to the sponsor. In outcome, rather than waiting for up to five contrast, some proportion of the new audi- days for a result which, even then, is not ence may merely be seeking entertainment guaranteed to produce a winner. Thus, the and lack the emotional involvement of tradi- majestic, traditional international format tionalists on which sponsors seek to “ride” which consists of a series of five games in order to acquire some of supporters’ affec- each lasting five days that is beloved by tion for the property for their brand. hard-core cricket enthusiasts, “stands at a precipice” according to the 149th annual Undue Influence by Sponsors edition of Wisden – the “bible” of cricket Consider the following examples of sponsor (Wilson, 2012). There is a real possibility Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 influence: the traditional format will become a histori- cal relic, usurped by the “quickie” games . When Nike invested $160 million in a five- and their adapted rules to meet the instant year sponsorship of the Brazil national gratification needs of broadcast audiences football team, which many consider the which far exceed the numbers who go to leading national soccer team in the world, grounds to watch the games. the company was allowed to specify In amateur sport, field hockey has experi- where, when and against whom the enced a number of rule changes aimed at national team would play twice per year making the game faster and therefore more (Berrett, 1993). attractive to spectators, media and, hence, . Andretti Autosports’ car failed to qualify for sponsors. The sport of lacrosse also the iconic Indianapolis 500 race so it Negative outcomes from sponsorship 3

negotiated with AJ Foyt Racing. It was interests. Consider the following examples agreed that Andretti would pay Foyt of the influence of NBC television and their $200,000 for its driver and sponsors to sponsor allies at the Sydney Olympics: take over one of Foyt’s cars that did qualify. This was legal under INDYCAR . NBC’s requirement that the overhead rules which stated that the fastest 35 cars power lines and 48 electrical towers at made the race, not the 35 fastest drivers. Homebush Bay be removed and the The arrangement was forged because cables put underground in order to Andretti’s sponsors paid much larger fees improve television images; the New South than Foyt’s sponsors and, hence, had Wales government contributed $20 m much more to lose by not appearing in the toward what state leaders called “a luxury race. There was widespread condemnation we can’t afford”. of the action with many claiming it impaired . The positioning of the running track at the the race’s integrity (Andrew, 2011). Olympic stadium, resulting in winds that . Air Canada, a longtime and heavy-spending seriously impeded athletes’ performances, corporate partner of National Hockey to accommodate the desire for television League (NHL) teams, threatened to with- cameras to have a shadow-free main area draw its sponsorships if the NHL did not not facing the afternoon sun. immediately address the frequency of . NBC’s decision to protect its $1.2 billion headshots and resulting injuries (Beifer- purchase of television rights by delaying held, 2011). all telecasts until evening prime time (since most of the network’s viewing audi- While sponsorship investments buy ence lived in a time zone 12–15 hours brands the right to associate with a property, behind Sydney time) (Lenskyj, 2002). do they also give them the right to influence the property’s presentation of the event even Since the Sydney Olympics, the delay of if, like the Air Canada vignette, they are telecasts issue has become moot by the per- motivated by facilitating the “general good” vasive presence of social and digital media rather than self-interest? which instantly inform those interested of Another dimension of sponsor influence the results. occurs when the needs of a sponsor It has been alleged that as commercial become more important than the intrinsic forces have become more pervasive, the merit of the sporting event itself. The pressure on athletes to perform more often Olympic Games is perhaps the forum at and to participate even when they are hurt which this issue reaches its apogee, but the has increased (Slack & Amis, 2004). For issue is debated in other contexts at lower example, cricket used to be a seasonal Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 levels of sport. The central role of US televi- game. However, the large amount of sponsor- sion companies and sponsors in financing ship and broadcast revenues that have the Olympic Games has resulted in the sche- flowed into the sport have transformed it dule of track and field events sometimes into a year-round global game with few being arranged so they can be shown live breaks for international caliber players. Simi- on prime-time television in the USA. Thus, larly, since Rugby Union became a pro- on occasions, for example, marathoners fessional game in 1995, players have have been required to race during the become bigger, stronger and faster, and hottest part of the day. In such cases, the have been required to play many more welfare of the athletes and the focus on the games. Predictably, the increased physical event become subservient to commercial and mental stresses have led to players 4 Crompton

participating when injured and have resulted game two or three times a year and watch in shorter professional careers. many of their games on television.” . “I was angry in 2012 when the club replaced Britannia its longtime sponsor with Bet REPUTATIONAL RISKS 365. Betting companies make vast profits from exploiting gullible poor people, There is an aphorism that says: People are especially the young, with their persuasive judged by the company they keep. Sport ‘get rich quick’ stories.” organizations are increasingly expected to be responsive to social concerns as well as Balance can be restored either by rationa- their own financial well-being. Thus, they lizing perceptions of actions of betting com- have to be concerned about partnering panies so they become more positive and with companies that could damage their justifiable; or by adopting more negative per- reputation. The extent to which the repu- ceptions of Stoke City F.C. because of their tation of a sport property might be alliance with Bet 365. In this case, the rela- damaged by associating with companies tively tentative support for the football club whose products are widely criticized will and the strongly held views toward betting range widely across the negative–indiffer- suggest the likely outcome would be: “I am ent–positive spectrum. An explanation of disgusted that Stoke City F.C. have ‘sold the process that determines where individ- out’ to a betting company and will have uals locate along that continuum is offered nothing more to do with them.” However, if by balance theory and attribution theory. the individual was a “hard core” fan who Balance theory’s principles were had purchased season tickets for decades, described by its originator: “By a balanced then the rationalization may be reversed: state is meant a situation in which the “The fact that Bet 365 is putting £3 million a relations among entities fit together harmo- year into the club, won’t have any influence niously ...A basic assumption is that ... on whether or not people engage in betting, relations tend toward a balanced state ...if and I think it’s great for the club.” a balanced state does not exist, then Attribution theory addresses how people forces toward the state will arise” (Heider, make causal interpretations. It posits that 1958, p. 201). The theory suggests that members of a target market will cognitively people react aversively to inconsistency infer a motive for a sponsor’s investment in and positively to harmony, consistency an attempt to understand the rationale for and the expected, so they act in ways that it. It recognizes that people interpret behav- further these latter outcomes rather than ior in terms of its causes, and that these their antitheses. interpretations are important in determining Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 Thus, imbalanced relationships are under how to react to the behavior. Thus, “Causal pressure to change toward balance. The attributions play an important role in provid- direction in which balance will be restored ing the impetus to actions and decisions will be determined by the relative strength among alternative courses of actions” of the sources of incompatibility. The (Kelly, 1973, p. 125). The general model of theory is illustrated by the following attribution theory states that antecedents hypothetical internal conversation: which comprise consumers’ beliefs toward . “As a lifetime resident of Stoke-on-Trent, I a sponsor and their suppositions about the am pleased when Stoke City F.C. do well. I company’s motives; lead to attributions as follow the team’s news on the sports to whether the sponsor is a loyal, empa- pages, take the grandchildren to see a thetic, supporter of the sport property, or Negative outcomes from sponsorship 5

is unreasonably exploiting it; which lead to additional revenues to prevail over the consequences that result in where consumers values that sport is alleged to represent locate it on the negative–indifferent–posi- and personal or community well-being, then tive scale (Kelly & Michela, 1980). there is risk of reputational damage to a A central precept of exchange theory property. which undergirds sponsorships is that the Some sport managers have chosen to dis- relationship has to be fair to both sides. regard this risk because they believe their There will be an understanding that in sports would not be financially viable exchange for their investment, companies without sponsorship from companies in need to secure a return on their investment. these sectors. They are concerned that loss However, the company’s sponsorship will be of these revenues would mean either that perceived to have both extrinsic motives events would be eliminated or that ticket (commercial considerations) and intrinsic prices would be commensurately increased. motives (loyalty, support, belief in the prop- The former outcome is likely to occur in erty. If the company is explicitly mercenary some contexts, but an economist is likely to and perceived to lack genuine, sincere argue that the latter outcome is improbable. support for the property, then its investment Both of these outcomes assume that costs will be discounted, imbalance will not be would remain fixed if sponsorship revenues positively restored and the property may declined, but in many instances it is likely suffer reputational damage from associating that efforts would be made to reduce costs. with sponsors that are perceived to be cyni- It is naı¨ve to believe that ticket prices cally exploitative. In contrast, if a sponsor- would be increased. Most sport managers ship is packaged as an act of social are charged with setting ticket prices at a responsibility, corporate altruism or benevo- level that will garner maximum revenues for lence, then motive attribution would their organization, so the current price of enhance sponsor credibility which would tickets is likely to be the highest price the ameliorate the danger of compromising a market will bear. If patrons could pay more, property’s reputation. then sport organizations would charge more now. Thus, ticket prices could not be increased if sponsorship was withdrawn. The Sponsor Product Classes That Are The only way to retain viability or profit Most Controversial margin would be to reduce costs which Some people believe that by helping sponsor would involve reducing players’ salaries, companies to market products which are prize money, administrative overhead, etc. potentially harmful to public health, sport Most controversies focus on sponsors in properties compromise their inherent the tobacco, alcohol, gambling and products Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 virtue for revenue (McDaniel, Mason, & high in fat, salt or sugar (HFSS) sectors. Tra- Kinney, 2004). It is incongruous to them ditionally, companies in these industries that sport which exemplifies a healthy fit life- have been major sponsors of sport events, style should be used as a promotional but the debate over the appropriateness of vehicle for products that appear to be the partnering with such businesses is becoming antithesis of this. In short, these linkages increasingly prominent. In response to the which are consummated for financial pur- public health concerns associated with poses seem to defeat the broader raison these products, some professional sports d’eˆtre for sport. When attribution theory leagues in the USA have inserted “morality” leads to a conclusion that a property is clauses in collective bargaining agreements “selling-out” by allowing the allure of with the players’ associations. These 6 Crompton

clauses prohibit players from endorsing or Administration (FDA) the power to regulate associating with tobacco, alcohol or gam- the tobacco industry. In June 2010, the FDA bling companies (McDaniel et al., 2004). issued regulations closing the existing loopholes. They applied to all tobacco companies Tobacco and all states, not only to those that signed Tobacco companies had a long history of the earlier MSA, and banned all sponsorship. sponsoring sport. Indeed, in the USA before The rules stated: 1998 they ranked second behind the auto- Manufacturers, distributers, and retailers of mobile sector as the primary investors in tobacco products MUST not sponsor any sport. During the 1990s, opposition to their athletic, musical, artistic, or other social or sponsorship reached a crescendo. It cultural event, or any entry or team in an revolved around three issues. First, through event, in the brand, name, logo, symbol, sport sponsorship the product could be motto, selling message, recognizable color associated with the vibrant health of athletes or pattern of colors, or any other indicia of instead of the horrors of emphysema, lung product identification, identical or similar cancer and the host of other illnesses to, or identifiable with, those used for any caused or exacerbated by tobacco products. brand of cigarettes or smokeless tobacco. Second, was the belief that the sport linkage (21C.F.B. 1140.34c) enabled tobacco companies to penetrate the The prohibition of tobacco company youth market, and more than 90% of people sponsorship in the USA is consistent with who will ever smoke on a regular basis do actions taken in many other countries so prior to the age of 19 (Koop & Kessler, throughout the world. For example, a Euro- 1997). Third, was the contention that such pean Union Directive prohibited tobacco sponsorship circumvented the ban of ciga- advertising and sponsorship in its 27 rette advertising and promotion in broadcast member countries in 2005. The demise of media that was enacted in the USA in 1971. tobacco sponsorship in a short 15-year In 1998, the angst with tobacco compa- period was remarkable (and perhaps a salu- nies, and the extraordinary costs they tary exemplar for other potentially harmful imposed on states’ health care systems products) given the industry’s aggressive through people’s use of their products, opposition to such legislation and its formid- resulted in the Master Settlement Agreement able expenditures on lobbying and influen- (MSA). In this, 11 tobacco companies exe- cing political processes. cuted a legal settlement with 46 states, the District of Colombia, and five common- wealths and territories, agreeing to pay Alcohol these entities $246 billion over 25 years. In The nexus between alcohol, sport and males Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 addition, the settlement agreement con- has a long cultural history. By no later than tained a number of important public health the sixteenth century in the UK. provisions, including several resulting in the severe curtailment of sponsorship the ale house was the main arena for staging investment by the companies. sports events ...with fields, greens, courts, rings, and the like arranged in close proxi- There were loopholes in the MSA that mity to the grounds. Here came much cock- enabled some limited tobacco sponsorship fighting, boxing, bowling, rugby, foot-races, to continue. However, these were closed by and more. Riding on the tendency of retired the Family Smoking Prevention and sport players to become pub owners, pro- Tobacco Control Act passed by Congress in prietors became sports promoters and pro- 2009. This gave the Federal Drug grammed contests that would draw the Negative outcomes from sponsorship 7

largest crowds for the sale of brew. (Wenner accompanied by a commensurate increase & Jackson, 2009,p.6) in criticism from those concerned about Alcohol companies are major sponsors of alcohol abuse. There has been heightened sport. In the USA, Anheuser-Busch and Miller awareness in recent years that alcohol is a Coors rank third and eighth, respectively, on drug with the potential to become addictive. the list of companies most active in sport There are approximately 79,000 deaths sponsorship (IEG, 2012), while Labatt and attributable to alcohol use each year in the Molson are similarly active in Canada, and USA, making it the third leading lifestyle- Guinness and Heineken in Europe. Several related cause of death for the nation. There decades ago, the substantial investment by are more than 1.6 million hospitalizations; beer companies in sport sponsorship was more than 4 million emergency hospital explained in these terms: “Beer drinkers visits for alcohol-related conditions and sports fans are one and the same – indi- (Centers for Disease Control and Prevention, visible, inseparable, identical! No one drinks 2011); and unmeasurable negative costs more beer than a sports fan, and no one such as spouse and child abuse, desertion, likes sports better than a beer drinker” emotional problems and fetal alcohol syn- (Johnson, 1988, p. 74). The ages of drome. The concern is that beer companies’ maximum beer consumption and maximum promotions connote it is natural for this sports involvement are the same, both for intoxicating drug to be consumed while men and for women. The peak beer consum- watching, or after participating in, a sporting ing years are from 18 to 29, which are the activity. The question is: Should sport be at peak years for sports’ participants and spec- all connected with a drug that is responsible tators. Males in the 18–34 age group consti- for such problems? Sponsorship and adver- tute only 20% of the beer drinking tising by beer companies promotes the population, but they consume 70% of all image that beer is not very different from beer. Breweries have sought tie-ins with soft drinks, and its negative consequences sports because they provide a “macho” such as traffic deaths, domestic violence, vehicle that appeals to their core young physical deterioration from cirrhosis, hyper- adult male target audience. These heavy tension and stroke, and pregnancy risks are users are the most critical market segment ignored. for beer companies and it is easy to commu- Alcohol sponsorship aspires to create nicate with them through sport associated positive brand image transfer associated events. with sport teams and athletes: vitality, The CEO of Anheuser-Busch identified fitness, fun, health, endurance, speed and four priorities in the company’s quest to strength. It has been observed that “beer comes to share the luster of healthy athleti-

Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 enhance proﬁts by increasing overall consumption and sales: (1) improve the image cism”, and that and desirability of beer; (2) keep beer fun It’s really paradoxic that alcohol and all it and social; (3) increase beer occasions; and stands for should be associated with excel- (4) improve retail sales. Sponsorship of lent athletic performance. You cannot have sports ﬁts well with all four of these strat- one and the other at the same time. If egies and so has become the company’s you’re going to perform as a top-grade primary promotional tool in most of its athlete, you have to cut out alcohol. markets (Wenner & Jackson, 2009). (Johnson, 1988, p. 78) As the magnitude of sport sponsorship by The close relationship between beer and breweries has increased, it has been sport has caused some “to wonder just 8 Crompton

what kind of cultural hypocrisy is going on “moderate” as one drink a day for females when Americans relentlessly insist on and two drinks a day for males. immersing sport- our most wholesome, The debate over alcohol sponsorship is most admired, even (sometimes) most especially potent in the context of college heroic institution – in a sea of intoxicating sports, since they articulate a different drink” (Johnson, 1988, p. 70). mission from the revenue and profit maximiz- In response to their social critics, beer ing model that characterizes professional companies point out that when used in mod- sports. In an open letter to Congress, eration, beer has been shown to have posi- renowned US college coaches Dean Smith, tive effects on health. A cardiologist who John Wooden, Joe Paterno and Jim Calhoun undertook an exhaustive review of the stated, “Advertising alcoholic beverages empirical literature concluded: “A vast litera- during college sports telecasts undermines ture supports the notion of health benefits of the best interests of higher education and moderate alcohol consumption.” However, compromises the efforts of colleges and he issued a caution, “The recent research others to combat epidemic levels of alcohol clearly shows that while moderate alcohol problems on many campuses today.” The consumption is beneficial, the benefit is lost Center for Science in the Public Interest at higher levels of consumption” (Kocheril, sought to convince colleges to sign the 2010, p. 420). The US Departments of Agricul- College Commitment, which features a prohi- ture and Health and Human Services care- bition of alcohol advertisement during tele- fully reviewed all the scientific literature vised collegiate sports events. The related to alcohol consumption and health document was signed by officials at more and concluded: than 250 colleges (Naughton, 1998). The evol- ution of the thinking process among college The consumption of alcohol can have ben- officials is captured by the following anecdote: eficial or harmful effects, depending on the amount consumed, age, and other character- The director of men’s athletics at the Uni- istics of the person consuming alcohol. versity of Minnesota negotiated a contract Alcohol consumption may have beneficial with Miller Brewing Company worth effects when consumed in moderation. $150,000. Subsequently, he was promoted Strong evidence from observational studies to vice-president for student development has shown that moderate alcohol consump- and intercollegiate athletics of the univer- tion is associated with a lower risk of cardio- sity system. When the contract expired, a vascular disease. Moderate alcohol new contract for $225,000 was offered. consumption is also associated with This time he declined explaining, “Being in reduced risk of all-cause mortality among a new position, I was able to get a big- middle-aged and older adults and may help picture view of what was happening ...I Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 to keep cognitive function intact with age. felt like we were sending students a mixed However, it is not recommended that message.” That big picture had included anyone begin drinking or drink more fre- the need for 14 students from the university quently on the basis of potential health to enter alcohol-rehabilitation programs benefits because moderate alcohol intake is and an increase in alcohol-related assaults also associated with increased risk of on that campus, which constituted part of breast cancer, violence, drowning, and inju- his new responsibilities (Naughton, 1998, ries from falls and motor vehicle crashes. p. A57). (USDA & USHHS, 2010, p. 31) Nevertheless, football bowl games, The USHHS (United States Department conferences and some individual colleges in of Health and Human Services) define the USA still accept alcohol company Negative outcomes from sponsorship 9

sponsorships. Some reject it and bar their France. Actions creating momentum likely local media partners from airing alcohol to lead to more restrictions or bans on advertisements in game broadcasts. Ohio alcohol sponsorship include: State, a major athletic power, is illustrative . A report commissioned by the European of this group. Their athletic director Union calling for an outright ban on explained: “Colleges cannot work hard to alcohol sponsorship throughout Europe tone down the use of alcohol around on health grounds. games, while cashing checks from beer com- . An Irish government report, National Sub- panies. There’s a terrible inconsistency stance Abuse Mission Strategy 2009–2016, there” (Fatsis, 2003, p. B12). which recommended: “Ban alcohol spon- The decision confronting sport managers sorships of all sporting and large music, as to whether or not they should solicit or comedy and theatre events.” It states: accept sponsorship from beer companies is “The burden of health harms and the more difﬁcult than that associated with social consequences of harmful use of tobacco companies because, unlike alcohol demand the implementation of tobacco, the problem is not consumption of further measures ...to reduce the amount beer, rather it is the abuse of beer. This of alcohol we drink” (Holland, 2012). makes it tempting for sport managers to . Australia, New Zealand, Welsh and South rationalize that there does not appear to be African governments have all indicated an a strong enough case to ban beer companies intent to ban alcohol sponsorship. from sponsorship opportunities. Certainly, . The British Medical Association urged the the case for a ban ostensibly is less compel- UK government to pass a law that would ling than the case that was made to ban spon- include banning all sports and music sponsorship by tobacco companies. sorships by alcohol companies. The gov- Nevertheless, the alcohol industry is oper- ernment acted on many facets of their ating in an increasingly restrictive regulatory recommendation with multifaceted restric- environment worldwide that is reminiscent tions on the alcohol industry, but to this of the early ruminations which ultimately point have excluded a sponsorship ban led to the ban on tobacco products. from their regulations. Alcohol sponsorship of sport is vulnerable. Every time bad behavior by athletes or fans that is fueled by alcohol receives media visi- Gambling bility, the negative linkage between sport Like tobacco and alcohol, gambling has had a sponsorship and alcohol abuse is reinforced. long relationship with sport. A contempor- Alcohol sponsorship has been banned in ary description of crowds en route to the several countries, most notably France Circus Maximus in Ancient Rome observed Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 which prohibited it in 1991. Thus, the Heine- they are “already in a fury of anxiety about ken Cup, which is the primary rugby club their bets” (Sauer, 1998), while a close competition in Europe, has to be called the relationship has been documented between H Cup in France; when the Scotland Rugby gambling and cricket and baseball in eight- team play in France they have to cover eenth- and nineteenth-century Britain and their sponsor’s name on their shirts since the USA, respectively (Munting, 1996). One Famous Grouse is an alcoholic beverage historian, for example, contended that at (Singer, 2008); and Anheuser-Busch replaces the onset of the twentieth century its popu- beer/alcohol logos on cars it sponsors in larity with gamblers meant that, “baseball Formula 1 racing with nonalcoholic brands was an important nexus between urban it owns when the competition takes place in machine politics and organized crime, 10 Crompton

albeit a lesser one than prize fighting or The emergence of “proposition bets” in horse racing” (Riass, 1999, p. 87). There recent years has been especially trouble- have been many cases of game fixing, includ- some. These relate not to the result of a ing the notorious Chicago White Sox players game but to some aspect of it. For example, alleged to have fixed the 1919 Baseball World a retired English Premier League (EPL) Series for $100,000. All of the major US pro- player who made 400 appearances for his fessional sports leagues over the years team said players would deliberately manip- have had to address betting scandals (McDa- ulate set pieces such as corners and throw- niel et al., 2004). ins: Given this heritage, it might be expected that sport leagues and properties would be For a while we did this almost every week. wary of entering into sponsoring agreements We made a fair bit of money. We could with gambling companies. In the USA such make deals with the opposing captain, for links are generally prohibited by the sports example, betting on the first throw, the first corner, who started with the ball, a yellow leagues, although they do allow sponsor- card or penalty. Those were the sorts of ships by state lotteries. Nevertheless, in things we had influence over. (Jackson, 2012) recent years legal constraints on gambling have been relaxed, so it has become more Soccer is the world’s most popular sport, widespread and expanded the types of but it may also be the world’s most corrupt gaming activities on offer. sport. European police investigations ident- There are two dimensions to the issue of ified hundreds of matches, including some sport sponsorship and gambling. The first involving the World Cup, the European dimension is that the clubs are promoting a Championships and the Champions League, potentially risky behavior of gambling pro- that had been fixed by corrupt global blems that is increasingly recognized as a betting syndicates, many of which are public health issue and that this abrogates based in Southeast Asia. The biggest their responsibility to be socially respon- betting companies transact around $2 sible. The target groups known to be at billion a week, which makes soccer gambling highest risk for gambling problems are an attractive target for criminals (Tatlow, young males and adolescents who both 2013). The preferred method of fixing the tend to relate to sports. outcome of games or “proposition” bets is The second problematic dimension for by bribing referees, but there are also numer- sport managers relates to gambling posing ous examples of players and coaches coop- a threat by introducing incentives for corrup- erating with criminals to fix outcomes. For tion. In recent years, it has been rampant. For example, in international soccer matches example, in US college basketball most involving African teams and a South African Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 betting revolves around whether a team promoter, referees were bribed to award will “beat the spread”, rather than win or multiple penalties to a specified team. lose the game. This means athletes can be When the fix was arranged, organized gangs on the winning team and at the same time across Southeast Asia employed hundreds engage in corrupt actions that reduce the of people to place a series of bets up to winning margin. This enables them to profit $3000 – the theory being that smaller bets if they bet against their own team on the were less likely to draw suspicion spread. Using a “forensics economics” (Chapman, 2012). approach, it has been estimated that this Many of these betting companies are “point shaving” occurs in as many as 1% of based in Asia and the worldwide reach of college games (Wolfers, 2002). the EPL enables them to use their Negative outcomes from sponsorship 11

sponsorship of EPL teams as a platform to Manchester United for the title of world’s establish credibility in their home markets. best known soccer club (Chapman, 2012). While these partnerships give respectability The gambling problem is not confined to to the companies, there may be a risk that college basketball and professional soccer. their pervasiveness and the unsavory conno- For example, a top player on the pro tennis tations associated with gambling in sport circuit commented, “Everyone knows cheat- may damage the perceived integrity of the ing goes on.” In tennis, a favored player can teams and the league. Despite these linkages, retire from a match by feigning injury and sponsorship by gambling companies in thus gift a win to the underdog (Doughty, soccer is flourishing. For example, betting 2012). companies have been the major shirt spon- In this environment, is it appropriate for sors in the EPL with 7 of the 20 teams being sport properties to be partners with betting sponsored by them either currently or in companies? The danger of the sport/gam- recent years: bling companies relationship was identified by the International Olympic Committee Pre- Aston Villa-Genting Casinos sident who said that betting-related corrup- Stoke City – bet365 tion was as big a threat to the integrity of Sunderland – Boylesports (terminated 2010), sport as doping: Tombola (terminated 2012) Swansea City – 32 Red (who formerly spon- It is a world problem and it is a very perni- sored Aston Villa) cious problem. With the introduction of Tottenham Hotspur – Mansion Casino (ter- broadband, you can bet worldwide. The minated 2010) danger is in match fixing and you see more West Ham United- Sbobet and more attempts to manipulate matches. Wigan Athletic – 12Bet (who replaced It is as dangerous as doping for the credi- 188Bet) bility of sport. (Goodley, 2012) The EPL is an obvious vehicle for betting It has been suggested that, “The crux of companies since the people most likely to the matter seems to be short term financial bet on sports are sport fans. After Bwin gain versus the long-term outlook concern- signed a three-year agreement with Manche- ing the integrity of contests as well as the ster United to become the club’s “official image of sports organizations” (McDaniel online gaming and betting partner” (one of et al., 2004, p. 302). the club’s 32 different sponsors), the com- The dangers of sport associating with pany’s CEO stated: gambling were recognized by the European Court of Justice which stated in the Bwin vs As Europe’s leading online sports betting Santa Casa case there was a possibility that operator, football is fundamental to our Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 long-term success, making up approximately an operator which sponsors some of the half of our total sports betting revenue of sporting competitions on which it accepts 261 m euros ($320 million). Manchester bets and some of the teams taking part in United has 569 million followers outside of these competitions, may be in a position to Europe, providing us with a great opportu- influence their outcome directly or nity to offer jointly designed and innovative indirectly, and thus increase its profits. products in countries that do not yet allow (Liga Portuguesa v. Departmento de Jogos, real money online sports betting. 2009) This partnership complemented Bwin’s The court’s concern was that commercial existing sponsorship with the Spanish team gambling providers could use their sponsor- Real Madrid, which competes with ship position to influence the results of 12 Crompton

matches or to gain access to insider infor- of the Mayor of London and with a two- mation. A similar view was taken by the thirds majority has the power to amend the Council of Europe in an Adopted Resolution Mayor’s budget or overturn his strategies. of 22 September 2010 which stated, “Betting In advance of the London Olympics the operators should be banned from funding Assembly passed a motion or sponsoring teams or individual competi- to recommend that the IOC introduces cri- tors if they manage bets placed on compe- teria for the selection of future Games that titions in which they are participating.” exclude food and drink companies strongly associated with high calorie brands and pro- Products high in fat, salt or sugar ducts linked to childhood obesity and to The targeting of youth by fast-food and sugar encourage national organizing committees drinks companies has emerged as an ethical to adopt similar criteria. concern. These HFSS products are being The chair of the Assembly who proposed increasingly regulated, albeit at a relatively the motion said: minor level at this point. For example, in the UK, television advertisements for these London won the right to host the 2012 Games products must not be shown on or around with the promise to deliver a legacy of more programs that may appeal to children active, healthier children across the world. under the age of 16. Given the growing con- Yet the same IOC that awarded the games cerns of societies about obesity, it seems to London persists in maintaining sponsorship deals with the purveyors of high more restrictive legislation is likely in the calorie junk that contributes to the threat future. of an obesity epidemic. Sport is acknowledged by HFSS businesses as being an effective vehicle for The Assembly believed that allowing com- reaching the critical youth market. Asked panies like McDonald’s and Coca-Cola to be why McDonald’s invest so much in sport, featured as The Olympic Partner (TOP) spon- the company’s director of worldwide market- sors contradicted the goal of leaving behind ing said, “It is important that we build brand a healthy legacy for children (“London 2012 loyalty with kids ...sponsorships are a great Olympics”, 2012) way to accomplish this” (Kelso, 2004). One The conundrum of selecting between expert on food policy commented: revenue enhancement and health concerns over fast food is particularly prominent in It is very convenient for fast food and soft the high-school context. It is common for drink people to sponsor sport, because by soft drinks companies to provide sponsor- doing so they place all the emphasis on ship money to fund high-school sports in activity as the means of avoiding obesity the USA, which provokes the questions:

Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 rather than both activity and diet. There is a similarity between the strategy of the does pairing sport and HFSS foods and food industry today and the tobacco indus- drinks implicitly communicate that one can try. Both have used sport as a means of eat them and still look and feel like an reaching young people and both began by athlete? Should high-school sport events be denying evidence that their products are used to promote consumption of a product harmful to health. There is a horrible famili- that the US Department of Agriculture and arity in the way the food companies have all reputable health nutrition texts urge stu- behaved; they are trying to buy inﬂuence dents to avoid? Does it make sense for the and present a kindly face. (Kelso, 2004) school to be teaching avoidance in the class- The London Assembly is a 25-member room and to encourage use on the sports elected body that scrutinizes the activities ﬁeld? There appears to be an ethical issue Negative outcomes from sponsorship 13

with schools embracing a set of values they trustees. GEO have been the target of numer- probably should be against. ous lawsuits and allegations claiming pris- The fast-food industry is under attack oner abuse, which has resulted in them from a growing army of lawyers, doctors paying out millions of dollars in fines and and ordinary citizens. Elected officials are penalties. A US judge described one GEO coming under pressure to pass laws limiting facility for teenaged prisoners as “a cesspool the junk food sold in schools and to regulate of unconstitutional and inhuman acts and the marketing of products high in fats, sugar conditions” and “a picture of such horror or salt. “Big Food” is becoming a target of as should be unrealized anywhere in the civi- protest just as “Big Tobacco” was in the lized world” (Hyde, 2013). Outrage from 1990s. Protestors are campaigning for fast- South Florida communities, which are food companies to put cigarette-style highly sensitive to immigration and human warning labels on their food. Junk-food rights violations; campus protests; and cam- makers have to appeal to children to sell paigns by civil rights groups caused the their products. They need to create custo- agreement to be mutually terminated mers, but is this something that sport man- (Muret, 2013). Presumably, both the negative agers should support through accepting reputational outcome for FAU from associat- sponsorship from such companies? Every- ing with a company perceived by some to be one can get excited at the revenues these a pariah and the widespread negative publi- sponsors bring to the organization, school city drawing attention to GEO’s transgres- or association, but don’t sport managers sions persuaded both parties to withdraw have an obligation to ask whether these pro- from the agreement. ducts are good for the people being targeted Wonga is the UK’s highest profile payday before accepting them as sponsors (Tyre, lender. When Newcastle United signed a £6 2002)? million a year shirt sponsorship with the company, there was a loud outcry. The Other concerns relating to corporate city’s leaders were unanimous and outspo- responsibility ken in their condemnation of the sponsor- In most of the cases described to this point, ship. The president of the city council the nexus between products and their alleg- called it “disgraceful” saying it “undermines edly detrimental health impacts is highly all the work we are doing to crack down on visible. Many other corporate social respon- legal loan sharking”. The head of the team’s sibility issues are less obvious. For example, fan club described the deal as “shameful” McDonald’s has been accused of accelerat- and said “it tarnishes the club’s name, ing the destruction of rainforests to make image and reputation.” A local MP accused way for cattle ranches; wasteful production Wonga of “legal loan sharking” and said, “It Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 and disposal of its packaging; and cruelty is only through preying on families struggling to animals (Slack & Amis, 2004). to make ends meet that Wonga has made Florida Atlantic University (FAU) agreed a enough money to be able to sign this deal $6 million naming rights deal to be paid over with Newcastle” (Conn, 2012). 12 years for its new 30,000-seat football The partnership was consummated, stadium with GEO Group. The $3 billion which suggests the Newcastle club owner company is one of the largest operators of believed the fans’ outrage would be ephem- for-profit prisons in the USA (it also operates eral and would not inflict damage on his in the UK). Its headquarters are in Florida, property. However, Bolton Wanderers F.C.’s and its chairman was a FAU alumnus and owners reached a different conclusion former member of the school’s board of (Kent, 2013). Their fans protested so 14 Crompton

vigorously against the club’s shirt sponsor- An ongoing challenge for sport apparel ship agreement with QuickQuid, another companies is to address allegations that payday lender, that eight days after signing their products are produced in “sweatshops” the agreement the club nullified it. In the in underdeveloped countries where workers Newcastle context, fans’ strong emotional (predominately women and children) are attachment to the success of their club led paid low wages; have minimal safety and to balance being restored by retaining the environmental standards exposing them to sponsorship; whereas in the Bolton case, dangerous machines and harmful chemicals; fans’ negative attributions of the motives of and are required to work long hours at unrea- QuickQuid resulted in balance being listic speeds with no access to unions. Nike, restored by terminating the sponsorship. adidas, Reebok and others face continual cri- Clearly, partnering with such socially contro- ticism. Nike, for example, owns 11 factories versial partners carries a reputational risk in Indonesia that produce 5.5 million shoes, .The consequences of that risk are likely to mostly for the US market. The company’s be weighted differently by different owners typical response to these allegations is: and are only likely to be revealed over a “Nike believes wages are best set by the longer time period. local marketplace in which a contract In the USA, sport properties that have factory competes for its workforce” (Bloom- associated with ExxonMobil have been sub- berg Businessweek, 2006). jected to criticism. When Washington, DC, Organizations such as United Students built a new stadium for the Washington Against Sweatshops urge these companies’ Nationals to welcome baseball back to the products be boycotted. To this point, the nation’s capital, it was the country’s first protests appear to have gained little traction LEED (Leadership in Energy and Environ- among the general population, but this may mental Design) certified green major pro- change as corporate social responsibility fessional sports stadium. One of the team’s emerges as an expectation rather than a dis- sponsors was ExxonMobil whose signage cretionary philanthropic behavior. Adidas, a appeared prominently in the stadium. The TOP sponsor of the London Olympic Games sponsorship was activated by the distri- and the maker of Team GB kit, was the bution of tip cards and by displaying focus of sweatshop protests around the energy-saving ideas on the stadium score- Games. For example, campaigners from War board. Environmentalists were outraged. on Want released a 90-second video on The Strike Out Exxon group protested that YouTube alleging exploitation of workers. the company’s involvement in the park Their spokesman stated: “burnishes the image of the worst environmental company on the planet ...The more adidas has 775,000 workers making products Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 environmental the Nationals make that park in 1,200 factories in 65 countries. What’s seem, the stronger the payday for Exxon”. shocking is at a time they are spending Pointing out that the company had spent $100 million alone on the sponsorship deal with the Olympics, and the additional deals $20 million to finance groups that questioned with the athletes, similar amounts of money links between human activity and climate are not being spent on real improvements change, and that members of Congress and in workers’ rights. (Bowater, 2012) other policy-makers frequented the new stadium, Strike Out Exon suggested, “It’s Mega events provide a platform which perfect politics. They get to associate their activists and protest groups increasingly name with the goodness of baseball and use to further their own agendas. The plat- environmental generosity” (Becker, 2008). form has been created at great expense by Negative outcomes from sponsorship 15

others and is paid for, at least in part, by divested by Union Carbide to a third sponsors. Activists have become skilled in company McLeod Russel India Ltd. Dow’s using it to garner the attention of global spokesperson said, “We didn’t buy the media, some of which are likely to be respon- Indian assets or liabilities because Union sive to controversial-event-related stories. Carbide had sold them to McLeod Russel. Sporting goods are a high-profile part of the Are we responsible? Legally? No. Morally, garment industry and activists sometimes ethically? No.” are able to suggest the sport companies’ Despite Dow’s claims of severance from practices are contrary to the event’s pro- the disaster and the Indian government fessed ethos of “fair play”. For example, the accepting a $470 million payment in final Olympic Charter states, “Olympism seeks to settlement of any obligations, a petition create a way of life based on ...respect for was organized to protest Dow’s sponsorship universal fundamental ethical principles.” of the wrap, and to try and galvanize public In some instances, the negative connota- support to persuade Dow that it should tions associated with a company may be regard Bhopal as its obligation. It had some public perceptions based on a distorted success, since in the British Parliament, the view of the actual facts. Nevertheless, the Shadow Olympics Minister who played a risks of damage to the sport property’s key role in securing the London Olympics image remain. Dow Chemical’s involvement when her party was in power and she was a with the London Olympics illustrates how cabinet minister, and who was still on the this might occur. Dow was a TOP sponsor board of the London Organizing Committee of the London Olympics. They committed said: “It’s better that we have an unwrapped $100 million to the IOC over a 10-year stadium, rather than a stadium wrapped in period. As part of their sponsorship, the the continuing controversy over Dow Chemi- company agreed to pay £7 million for a cal’s sponsorship.” Another elected official “wrap” of polyester and polyethylene fabric said, “This is damaging the credibility of panels which would encirculate the main London and the Games.” Dow was defiant, Olympic stadium. In return, it secured the with their vice president for Olympic oper- right to brand the surfaces with its name ations stating: “This issue is not our issue. until the eve of the Games. We’re not going to be bullied by activists or In 1999 Dow had bought Union Carbide, politicians” (Gibson, 2012). The relationship another chemical giant, which had come to of these issues to sport properties may public attention 15 years earlier when a seem tenuous, but the Dow Chemical case dilapidated plant belonging to its Indian sub- illustrates their potential for impugning a sidiary in Bhopal, a city of 1.7 million people property’s reputation. Enhanced telecommu- in the central Indian state of Madhya nications and globalization suggest ethical Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 Pradesh, exploded and filled the air with conundrums for sport properties of this gases, principally methyl isocyanate, an type will occur with increasing frequency. ingredient in pesticides. Some 3000 people Perhaps the worst scenario for a sport were killed in the first few weeks, many property is when the disreputable behavior more have died in the years since then, and of a prominent sponsor partner rises to the the death total directly attributable to the level of high-profile criminality. The exem- world’s worst industrial disaster now plar of this situation was Enron’s 30-year, stands at around 11,000 in the most conser- $100 million agreement with the Houston vative estimate (the true total may be over Astros Major League Baseball franchise 20,000). Dow bought Union Carbide seven for the naming rights to its new stadium. years after the Indian subsidiary had been When the agreement was signed, Enron 16 Crompton

Corporation was America’s seventh largest Fortunately for Villanova there was no company. The Enron Field name was on all formal written agreement requiring the exterior and interior signage, uniforms school to retain the name and it was able worn by game-day staff, cups, plates, to simply call the center, The Pavilion. The napkins and tickets. potential of corporate or individual donor When Enron collapsed as a result of partners’ names becoming an embarrass- unethical practices, tens of thousands of ment at some time in the future suggests people experienced financial hardship that contracts should contain a clause that through the loss of their jobs, pensions, provides a dissociation option if a donor funds or stock. To the Houston and broader or corporate partner embarrasses a college American public Enron quickly became a or franchise. Companies commonly include pariah. The name became synonymous with such clauses in contracts with celebrity unethical behavior, shame and failure. The endorsers and this appears to be an analo- continued use of the name Enron Field stig- gous situation (Blumenstyk, 1995). matized the Astros. Their spokesperson Obviously, no sport organization would noted, enter into a partnership knowing that the sponsor would damage its reputation, but The Enron logo displayed on the stadium there are occasions when this may occur wrongly suggests to the public that the inadvertently. The nuances involved in Astros are associated with the alleged bad potential relationships that could result in business practices of Enron ...The current perception of Enron is incompatible with negative outcomes to a property were illus- the honesty and integrity embodied in base- trated by the Women’s Tennis Association ball as America’s pastime and espoused by Tour which rejected a $10 million offer by the Houston Astros. (Easton, 2002, p. A5) Tampax tampons to become the sport’s global sponsor because the tour feared the The trustees acting for Enron’s creditors affiliation would adversely affect the image refused to surrender the naming rights and marketability of women’s tennis. Local because they regarded them as an asset tournament sponsors did not want to be that had value. Ultimately, the Astros paid associated with a Women’s Tennis Associ- $2.1 million to Enron to remove the com- ation Tour presented by Tampax. The tour pany’s name from the stadium. spokesman commented, After legendary Pennsylvania State Uni- versity football coach, Joe Paterno, was cri- No doubt it would have been great to work ticized by the official report into the child with a top flight company like Tambrands, abuse conviction of his longtime assistant but whether the offer was $3 million or $10 football coach, Nike removed his name million, image is image, and we received a tremendous backlash for even considering Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 from its child-care center. This was an hon- the proposal. orary title without the quid pro quo which is associated with naming rights agree- A local tournament director added, ments, so unlike the Enron case there was I see complications in it. It didn’t make me no legal problem in taking action. This was feel comfortable, and I sensed it might not also the case at Villanova University where be perceived as positive by my title sponsors John E. DuPont gave $5 million to build a and by the public in general. You could recreation center which was named the almost hear the Letterman [host of a late DuPont Pavilion. However, in a high-profile night network television talk show] jokes court case some years later, DuPont was and, if you want to deal with reality, the heck- convicted of murder (Cohen, 1999). lers. (Finn, 1993, p. B6) Negative outcomes from sponsorship 17

Over-commercialization name is not merely a label, it is a shorthand There is a concern among some that the per- for describing who or what someone or vasiveness of sponsorship in elite sport and something is. If the entity bearing the name the commercialization that accompanies it is important to people, then it follows that may over the long term erode the fan base the name matters. upon which it depends. In the case of Changing a name changes the relationship soccer, for example, it has been argued: with the thing being renamed. When a facility has a long-established, beloved heritage The drive for proﬁt that underpins the name, it is likely to be associated with fond embrace of sponsorship encourages the memories stretching back across gener- club to erode the emotional bond between ations. If it is changed, many will feel a loss club and the traditional supporter. This of ownership, continuity and history. As a “fan equity” is the traditional economic basis of the club because the passion result, those involved in making such a shown by the spectators at the ground is change are likely to be subject to oppro- what produces the spectacle that makes brium, ridicule and regarded with contempt football a televisual product. However, fans by many. When the storied New York lured by the televised product, which spon- Yankees moved to their new stadium in sorship demands, see the game as entertain- 2009, their management recognized the ment not as emotional attachment. The net power of the stadium’s cultural meaning. effect of sponsor-driven televised sport may Consequently, they avoided upsetting fans then be to destroy “fan equity” by driving by retaining the “Yankee Stadium” moniker them from the grounds to which they may at their new site and resisting the temptation never subsequently return. (Slack & Amis, to sell naming rights at it. However, they did 2004, p. 281) sell rights for entrances and concourses. The likelihood of an over-commercializa- The new Malaysian businessman owner of tion backlash is most prominent at the Cardiff City F.C. changed the team’s tra- grade school level. The following vignette ditional blue uniforms to red and incorpor- illustrates the issue: ated a new badge featuring a red dragon when the club was promoted to the EPL. . Fila USA and Footlocker invested $1.5 There was speculation he would rename million over three years to remove or and rebrand the team as the Cardiff refurbish dilapidated basketball back- Dragons. A red dragon is the central feature boards in 825 New York City elementary of the ﬂag of Wales. The intent was to pos- and junior high-school playgrounds, and ition the team as “the club of Wales” to to maintain them. In exchange the compa- broaden its support base beyond the city of nies’ logos appeared on the backboards Cardiff, and to enhance its appeal in the Far Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 above a motivational message such as East where red is considered to represent “Stay in school”. A segment of the commu- “good fortune”. nity protested vigorously at the “corporate These actions at Cardiff City were taken takeover of classrooms, gyms and arenas while recognizing that “history and tra- to sell kids products they don’t need or ditions are the lifeblood of any club and can’t afford” (Davis, 1994). should be zealously guarded and preserved,” Charges of over-commercialization are and “it is a radical and some would say revo- especially prone to occur when long-estab- lutionary move, which will be met with lished community names on stadiums are unease and apprehension by some.” There replaced by corporate names. Names was controversy, but the changes were gen- matter, they have power and meaning. A erally accepted by the fans because their 18 Crompton

attributions were positive. They perceived partnership and win over the club’s suppor- the owner to be an honorable man with a ters, the company’s sponsorship fee sincere interest in the club’s long-term well- included restoration of the stadium’s tra- being, and his motives to be to enhance the ditional name of St. James’ Park (Edwards, club’s economic resources and viability 2012). (BBC Sport, 2013). In addition to being sensitive to fan senti- In contrast, when Newcastle United was ments, companies considering naming purchased by a new owner, and he changed rights also have to scan the broader political the team stadium’s 119-year-old name from environment. The challenge was illustrated St. James’ Park to SportsDirect.com by Citigroup’s conundrum relating to its @St. James’ Park so it incorporated the $400 million investment of $20 million a name of his sports equipment company, the year for 20 years for the naming rights to action was greeted with massive outrage Citi Field which was intended to make the from all sections of the city. While no company’s name synonymous with additional revenue accrued to the club New York baseball. The agreement was from this naming right, the owner’s intent signed in 2006, but when the Great Recession was to use his company’s name to showcase arrived in 2008 Citigroup received a $306 the potential of the stadium naming rights to billion bailout loan from the U.S. Treasury other companies that might purchase them. to insure loans and asset-backed securities, His expectation was that the naming rights and laid off 52,000 employees. Many in the would sell for about $15 million annually. media and the U.S. Congress urged the There was no interest. Indeed, the name company to “Scrap the deal with the became fodder for comedians’ jokes and stadium and make sure you take care of was subjected to national ridicule. The these folks who have mortgages” (Nasaw, owner persevered. He attributed the lack of 2008). It was pointed out, “Even in the ﬂush interest to companies wanting the opportu- times during which it was signed, the deal nity to fully rebrand the stadium, rather seemed questionable. With high name recog- than only to attach their name to St. James’ nition and a place among the world’s banking Park. Accordingly, he changed the showcase leaders, Citigroup hardly needed the Citi name to Sports Direct Arena. The fans were name plastered on a ballpark to enhance even more intensely affronted, and were itself” (Sandomir, 2008, p. 3). The company’s scathing and unstinting in their criticism. rationale for retaining the naming rights They attributed his motives to be selﬁshly agreement was that it “provides an incredible directed at enhancing the commercial platform to promote our world-class brand, success of his own business interest, rather enhance our relationship with current than those of the football club. The end clients, attract new clients and expand our Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 result was fan alienation and contempt for considerable community efforts” (Sandomir, the owner; extensive and extended national 2008, p. 3). It was pointed out that and local negative publicity for his company; and creation of a toxic environ- for a company as big as Citigroup, $20 million ment which destroyed any interest among a year for naming rights is pocket change. potential stadium naming rights purchasers. Still, the spending is symbolic. It’s on a base- The situation was only resolved when the ball stadium in a gloomy economy, an investment that seems to thumb its nose at laid off club negotiated a shirt sponsorship agree- workers. (Sandomir, 2008,p.3) ment with a payday loan company, which was described by the local MP as a “financial Despite the criticism the naming rights predator”. To ameliorate criticism of the agreement remained in place. Negative outcomes from sponsorship 19

While facility naming sponsorships are front is available for individual club shirt widely accepted by the four major US pro- sponsors. The league established a floor fessional leagues – NFL, NBA, MLB and of $500,000 per year for this. Unlike the NHL, this has not been extended to shirt or EPL, MLS prohibits online gambling compa- apparel naming rights. There is a belief that nies from jersey sponsorships. The amount fans see their teams’ shirts as sacred real companies are willing to pay to use MLS estate. Thus, in an attempt to ameliorate teams as a platform for connecting their the charges of over-commercialization brands to team supporters pale alongside some US sport governing bodies, including EPL contracts, but it has increased sub- the National Collegiate Athletic Association, stantially in recent years. Vitamin manufac- NFL and NBA, have imposed rules limiting turer, Herbalife, paid the Los Angeles the size of corporate logos that can be dis- Galaxy $4.4 million for shirt and team played on team uniforms. For example, the naming rights for the 2012 season, which NCAA’s uniform rules limit the size and is the highest value MLS jersey sponsor- number of manufacturers’ logos on game ship to this point. jerseys to “a single manufacturer’s logo not From a corporate sponsor’s perspective, 1 to exceed 24 inches square”. A similar limit- shirt naming rights are likely to be preferable ation is imposed on socks, headbands and to facility naming rights, because they have wristbands. the added value not only of appearing in The definition of what constitutes “over- front of live crowds but also on television commercialization” is culturally specific, and in press action photographs. In addition, rather than generic, so what is acceptable they appear on the replica uniforms pur- cultural behavior in one context may be chased and worn by fans of the teams. unacceptable to others. Thus, in Six Thus, shirt sponsorship creates thousands Nations Rugby Union sponsors’ names are of “mobile billboards” displaying a com- permitted not only on the perimeter, but pany’s name in every park and open space also on the middle of the pitch and the in countries where children seek to emulate dead-ball areas. In contrast, the playing the skills of their team idols, and these areas have always been considered sacro- shirts are also worn by older people as sanct in US major league sports. Thus, casual leisure wear. when Columbia Pictures and Marvel Studios In their ongoing search for new revenue wanted to put logos for their upcoming film sources, it seems likely that the US major “Spiderman 2” on the bases and on-deck leagues ultimately will follow the European circles in 15 stadiums to exploit their rights soccer precedent and embrace shirt as a sponsor of MLB, there was fan outrage naming rights. Indeed, the Women’s National and media coverage that labeled baseball Basketball Association (WNBA) began to Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 as reaching a “greedy new low”. As a conse- pave the way for this to occur when the quence MLB quickly reversed its decision Phoenix Mercury signed a three-year spon- to authorize those actions (Masterman, sorship worth $1 million annually with an 2007, p. 251). identity theft protection company, and Major League Soccer (MLS) in the USA other WNBA teams quickly followed this pre- does not have the long heritage and cedent. The minor league arm of the NBA, entrenched traditions of the four major US the NBA Development League, has also sports leagues and so has been able to sell moved into uniform sponsorship. In 2012, shirt sponsorships without arousing fan the NBA owners discussed the potential of alienation. The back of club jerseys is jersey sponsorship and the deputy commis- reserved for league-wide sponsors, but the sioner stated: 20 Crompton

If we add sponsor logos to jerseys, we recog- and reputational. Operational risks may nize that some of our fans will think we’ve emanate from sponsors insisting on chan- lost our minds. But the NBA is a global ging the rules or format of an event which business and logos on jerseys are well estab- may offend traditionalists whose deep lished in other sports and commonplace passion and emotional identification with outside the U.S. (Sandomir, 2012) the sport or team makes them prime Similarly, the NFL revised its rules to edge targets for sponsors; or from sponsors exer- into jersey sponsorship by authorizing prac- cising undue influence on an event’s tice team jerseys to carry the name of a content, location, timing or participants. 1 1 sponsor on a 32 –42 inch patch. Reputational risk springs from over-commercialization which may erode “fan equity”. This is a particular concern when a long- established heritage name of a facility is CONCLUDING COMMENTS replaced by a corporate name. The other, In most product classes, different compa- and perhaps more potent reputational risk, nies’ offerings are functionally similar. To is for sport properties to partner with differentiate their product from those of tobacco, alcohol, gambling and HFSS pro- others, companies seek to create strong ducts, where there is increased public sensi- brand equity. When they partner with a tivity to their negative health impacts. sport property, sponsors seek brand image Similar controversy may emerge around transfer. This involves “borrowing” some of issues of corporate social responsibility as the property’s attributes and transferring expectations grow regarding the impact of them to the companies’ brands. When a a company’s actions on society. sport property signs an agreement with a Fans’ passion and emotional attachment sponsoring brand, it authorizes some of its to a team or event may enable them to disre- reservoir of both property attributes and gard any misgivings they have toward spon- fans’ emotional capital to be transferred to sors. Balance theory explains such the sponsor. In crude terms the company behavior. Thus, sport owners and managers, says, “We want our brand to have this set for the most part, did not voluntarily forego of image attributes that you possess.” The sponsorship by tobacco companies and, at sport event says, “We will convey that set this point, most of them show little incli- of image attributes to you for a price.” nation to voluntarily forego sponsorship However, this affinity with corporate from any of the remaining three controver- sponsors has the potential to operate in sial product classes, or from companies per- reverse. That is, if the attributes of the ceived to lack social responsibility. However, brand or product resonate strongly with in all three cases there are fans and others Downloaded by [Texas A&M University Libraries] at 15:08 17 June 2014 the sport property’s supporters, then the who use sport as a platform to address the direction of image transfer could be from wider social issues associated with these sponsor to sport property. If these attributes types of sponsors. Public mores and norms are negative, then balance theory suggests on these issues are changing and sensitivity they could hurt the sport property’s repu- to them is increasing. Sport is not immune tation. As an experienced sponsorship to shifts in public opinion, so it is likely manager observed: “Sponsorships are essen- that public sentiment, reflected in govern- tially risky” (D’Alessandro, 2001, p. 72). ment regulatory action, will require sport This paper has suggested that there are properties to conform to these emerging two sources of potential negative image trends to protect their reputations and transfer for sport properties: operational viability. Negative outcomes from sponsorship 21

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