Despite all the public utterings by the Newcastle United hierarchy about the importance of developing commercial revenue, it wasn’t until five years into Mike Ashley’s tenure that the first noteworthy commercial deal was struck. As ever under Ashley however, the deal, with ‘digital finance company’ Wonga was (and remains) hugely controversial. Wonga’s business model targets extremely vulnerable people who need to borrow small amounts of money. This money is loaned with astronomical interest rates (APR) of up to 5,853% and in times of desperation, many opt in to such a deal as high street banks don’t provide similar agreements. Such practices in the United Kingdom are legal, (strictly speaking), but illegal in many other countries.
As news broke of a commercial deal between Newcastle United and Wonga for kit sponsorship being close to completion, there was widespread outcry and disbelief amongst fans, politicians and the media. Michael Martin, Editor of True Faith magazine had this to say (8 October 2012):
“The people who run Newcastle, for the fans, have a social responsibility. I would love them to honestly answer one question: Would you, Mike Ashley, seriously recommend borrowing money from Wonga at those interest rates? If you can’t answer yes then they shouldn’t be our shirt sponsors.
“Newcastle is being used to normalise their product. It cheapens and tarnishes the Newcastle United brand. I wouldn’t want my logo next to them, so what do other sponsors think?”
Newcastle City Council leader Nick Forbes commented (9 October 2012):
“I’m appalled and sickened that they would sign a deal with a legal loan shark.
“We see the devastating consequences of people getting into financial difficulty and we spend a lot of money each year helping people who are in debt through companies like this.
“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.”
“I fear the long term social consequences of the decision and I will be writing to Mike Ashley and asking for him to fund the extra debt advice that we will need to provide as a result.
“Newcastle United is a role model for thousands of people so what they do matters.
“It sets the tone for the city and I don’t want this to be a city built on an image of cheap and irresponsible debt.”
Source: The Independent
Newcastle United managing director Derek Llambias then announced the Wonga deal and stadium renaming back to St. James’ Park as follows (9 October 2012):
“They have a community feel about them. The money will also go to the academy and our foundation. To spend money on the naming rights and then give it back to the fans – that’s a massive thing to say where Wonga are with people and as a company.
“It is our biggest ever commercial deal ever and we are happy with it. Wonga will be a conduit between the fans and the club.
“Did I have reservations? Knowing the people who run Wonga and their staff and where they are as a company, I’ve had no reservations. I only have reservations about the price – I always want the biggest price and they want to try to get the smallest price. We have come to a very good value for a commercial deal. It means another player on the pitch.
“Wonga have 30,000 customers in the North-East. Satisfaction levels are nine out of 10. That is bigger than the banks. That has not been recognised. Wonga are out there and people will sign up to them – no one is twisting their arm. They are up front about what they do. Banks are not lending money, so there is an opportunity for companies to make money.”
A few interesting points there… Wonga have a community feel about them? They are to be a conduit between the fans and the club? No moral reservations at all besides the price? Another player on the pitch? Satisfaction levels of 9 out of 10? Just how morally reprehensible can the representatives of our proud club become?
As the new season, and the day Wonga would feature on Newcastle United’s black and white shirt edged closer, so did rumours about a number of the players, notably the Muslim ones (Ba, Cisse, Ben Arfa) having strong ethical objections to wearing a shirt promoting usury. And sure enough, upon the start of pre-season preparations, forward Papiss Cisse refused to join his team mates for a training camp in Portugal while the situation was unresolved. In the end, Cisse backed down his stance of refusing to wear a Wonga shirt (30 July 2013):
“I have had some useful discussions with my club, my family and Islamic teachers in the last few weeks. After a huge amount of thought and reflection I have made the decision to follow my teammates and wear the kit.”
Source: Daily Mail
In the summer of 2014 Wonga came under increasing pressure from legislators to change their practices, after a series of scandals. This has prompted rumours about them pulling out of the Newcastle United shirt sponsorship deal prematurely. One of the first steps on the road to redemption has been an announcement that from the start of the 2016/17 season (!) Newcastle United children replica kits will no longer feature the Wonga logo. This has prompted Newcastle Central MP Chi Onwurah to reflect (14 November 2014):
“[It is] distressing and depressing to see five-year-olds running round with Wonga on their chest on match days.
“I want Wonga off all shirts, I want their relationship with Newcastle to end, unless they transform themselves into a very different company … Newcastle United supporters deserve better.”
Source: The Guardian