Should a Nationalised Bank sponsor a Football Club?

[Diego_Sideburns]

Northern Rock, the nationalised Bank, has confirmed that it has entered into a new four-year contract to become the main sponsor of Newcastle United Football Club commencing from the start of the 2010/11 football season. The value of the deal will range from £1.5 million to a maximum of £10 million, with payments phased over the four years to the end of the 2013/14 season.

 

The agreement will be reviewed after two years and the £10 million will only be realised if Newcastle United is playing in the Greedy League for the full contract period.

 

As a tax-payer are you happy for your money to be used to sponsor a Football Club or should it be used to encourage investment and borrowing by people/bodies on a non-allegiance basis?

 

[jimsleftfoot]

Northern Rock, the nationalised Bank, has confirmed that it has entered into a new four-year contract to become the main sponsor of Newcastle United Football Club commencing from the start of the 2010/11 football season. The value of the deal will range from £1.5 million to a maximum of £10 million, with payments phased over the four years to the end of the 2013/14 season.

 

The agreement will be reviewed after two years and the £10 million will only be realised if Newcastle United is playing in the Greedy League for the full contract period.

 

As a tax-payer are you happy for your money to be used to sponsor a Football Club or should it be used to encourage investment and borrowing by people/bodies on a non-allegiance basis?

 

At the end of the day all they are doing is advertising and as the bank is being run on a commercial basis, albeit with the tax payer as the owner, then I don’t really see the difference between them sponsoring a football club and advertising on TV.

[rudemedic]

Northern Rock, the nationalised Bank, has confirmed that it has entered into a new four-year contract to become the main sponsor of Newcastle United Football Club commencing from the start of the 2010/11 football season. The value of the deal will range from £1.5 million to a maximum of £10 million, with payments phased over the four years to the end of the 2013/14 season.

 

The agreement will be reviewed after two years and the £10 million will only be realised if Newcastle United is playing in the Greedy League for the full contract period.

 

As a tax-payer are you happy for your money to be used to sponsor a Football Club or should it be used to encourage investment and borrowing by people/bodies on a non-allegiance basis?

 

I was under the impression that Northern Rock sponsorship deals with the Barcodes, Durham County Cricket and the Falcons were all not going to be renewed. Obviously this isn't the case and I'm not happy about it and think its a scandalous waste of public money considering cuts are going to be made all across the public sector- Newcastle will be able to get another sponsor fairly easily (they have one of the biggest shirt sales in the country). I wonder if this has anything to do with the upcoming general election and the safety of some North East seats.

[garcon]

I wonder if this has anything to do with the upcoming general election and the safety of some North East seats.

I'm sure Gordon would never dream of thinking about it in that context.

[Diego_Sideburns]

At the end of the day all they are doing is advertising and as the bank is being run on a commercial basis, albeit with the tax payer as the owner, then I don’t really see the difference between them sponsoring a football club and advertising on TV.

 

There are plenty in the North East and elsewhere who would not deal with a company/bank which sponsors Newcastle, or Sunderland or Boro. Mrs. Sideburns refused to buy a microwave oven that fitted all her criteria, because it was made by Sharp who used to sponsor ManUre. Cutting the nose of to spite the face, but should public money be put into something that turns away many potential customers based on staunch loyalties?

 

Advertising on TV is hoping to appeal to all viewers, but advertising on football shirts immediately reduces the size of the customer market.

[Yard Dog]

Yes, but by being Newcastle's shirt sponsor they are advertising on tv, as well as in many print and web publications. That's one of the main attractions of becoming a shirt sponsor.

 

I agree with Jim

Edited January 18, 2010 by Yard Dog

[opinions4u]

I suspect Virgin will own the "good bits" of Northern Rock by the end of the year anyway, so by that stage it won't really be public money anyway - the value in the "good bits" of Northern Rock will presumably be repaid to the taxpayer.

 

Getting Northern Rock back on its feet and trading profitably should be a good thing for the North East, and also the charitable bodies that have, for many years, benefited from the Northern Rock Foundation which has always distributed a percentage of the bank's profits to causes predominantly in the North East and Cumbria.

 

Taxpayer owned or not, if the business believes that the investment of its marketing budget in a sponsorship deal with a football club is a good thing for the balance sheet, then why not?

 

If Oldham MBC came along and offered excellent sponsorship terms to Latics, should Latics fans object to such use of council tax funds?

[garcon]

If Oldham MBC came along and offered excellent sponsorship terms to Latics, should Latics fans object to such use of council tax funds?

No, but you can guarantee the other 95% of Oldhamers would.

[opinions4u]

No, but you can guarantee the other 95% of Oldhamers would.

Aren't Tranmere sponsored by their local authority?

[Diego_Sideburns]

...the charitable bodies that have, for many years, benefited from the Northern Rock Foundation which has always distributed a percentage of the bank's profits to causes predominantly in the North East and Cumbria.

 

Which leads me to mention that WBA are to wear shirts against Newcastle tonight in support of the Haiti earthquake appeal.

[Diego_Sideburns]

If Oldham MBC came along and offered excellent sponsorship terms to Latics, should Latics fans object to such use of council tax funds?

 

Oldhamers cannot opt to pay their Council Tax to a different local authority. People looking to invest can opt for a different bank.

[opinions4u]

Oldhamers cannot opt to pay their Council Tax to a different local authority. People looking to invest can opt for a different bank.

So if OMBC made a decision to sponsor Latics, would that be acceptable?

[Diego_Sideburns]

So if OMBC made a decision to sponsor Latics, would that be acceptable?

 

Acceptable to whom? Oldhamers who are Council Tax payers would have to answer for themselves. If they found it unacceptable their only recourse would be through the ballot box.

 

The use of Nothern Rock money for sponsorship affects all taxpayers. It could be counter-productive by turning away potential investors who do not agree with money being given to NUFC.

[F.O.B.]

So if OMBC made a decision to sponsor Latics, would that be acceptable?

 

No. Northern Rock is a business, OMBC is a shamble, er, sorry, Council.

[singe]

No. Northern Rock is a business, OMBC is a shamble, er, sorry, Council.

But is is hard to argue that Northern Rock is not a shambles too!

[F.O.B.]

True, but a Council doesn't have to drum up business using advertising campaigns.

[garcon]

True, but a Council doesn't have to drum up business using advertising campaigns.

Doesn't it?

 

How about the need to attract incoming commercial investment to the Borough?

[jimsleftfoot]

There are plenty in the North East and elsewhere who would not deal with a company/bank which sponsors Newcastle, or Sunderland or Boro. Mrs. Sideburns refused to buy a microwave oven that fitted all her criteria, because it was made by Sharp who used to sponsor ManUre. Cutting the nose of to spite the face, but should public money be put into something that turns away many potential customers based on staunch loyalties?

 

Advertising on TV is hoping to appeal to all viewers, but advertising on football shirts immediately reduces the size of the customer market.

 

I’m sure there are plenty but that wouldn’t buy Northern Rock products but that doesn’t mean that they are not benefiting from Sponsoring Newcastle. I wonder how many people invest in Northern Rock or bought Sharp products because it was a brand they identify with. There are millions that boycott Mcdonalds products for one reason or another but there are even more that buy from them as it is an established company and brand which people know and maybe ironically trust.

 

Looking at it at an economical level, why does ITV say have the right to benefit over Newcastle United. Both are businesses with investors and employees. Why should Newcastle United be barred from receiving such income just because it is a football club. At the end of the day, this could be seen to be distorting the market and would most likely be against EC law.

 

Now if your saying that they shouldn’t spend money on advertising at all, then that is a different argument altogether but I doubt that people would actually have a problem if the money went to ITV.

 

[jimsleftfoot]

I was under the impression that Northern Rock sponsorship deals with the Barcodes, Durham County Cricket and the Falcons were all not going to be renewed. Obviously this isn't the case and I'm not happy about it and think its a scandalous waste of public money considering cuts are going to be made all across the public sector- Newcastle will be able to get another sponsor fairly easily (they have one of the biggest shirt sales in the country). I wonder if this has anything to do with the upcoming general election and the safety of some North East seats.

 

It is expected that the government will make approx £100 million on top of what was originally put into Northern Rock.

[leeslover]

Doesn't it?

 

How about the need to attract incoming commercial investment to the Borough?

"Bring your business to Oldham and pay taxes to support the local football team!"

 

Don't work in sales, do you Garcon?

[garcon]

"Bring your business to Oldham and pay taxes to support the local football team!"

 

Don't work in sales, do you Garcon?

 

Based on that pitch, neither do you.

[rudemedic]

It is expected that the government will make approx £100 million on top of what was originally put into Northern Rock.

 

Which government though. Banks (and bankers) make a fair bit of cash when the economy is good so I could always see the benefits of buying them out but Northern Rock do not need to advertise and I'm a little bit with Diego that advertising for the Barcodes doesn't do them any favours in Mackemville and Smog town. It will be interesting to see when the government gets its money back from the buying of certain key financial businesses as I'm fairly certain a few Yank banks have paid back the money they were lent to the US government. On a related note I doubt AIG will be sponsoring PLC too much longer and I see Andy Murray is still sponsored by RBS- not sure that one benefits the UK tax payer too much.

[leeslover]

Which government though. Banks (and bankers) make a fair bit of cash when the economy is good so I could always see the benefits of buying them out but Northern Rock do not need to advertise and I'm a little bit with Diego that advertising for the Barcodes doesn't do them any favours in Mackemville and Smog town. It will be interesting to see when the government gets its money back from the buying of certain key financial businesses as I'm fairly certain a few Yank banks have paid back the money they were lent to the US government. On a related note I doubt AIG will be sponsoring PLC too much longer and I see Andy Murray is still sponsored by RBS- not sure that one benefits the UK tax payer too much.

There’s more than one answer to that – I think that the banks fairly rapidly repaid the cash the Bank of England lent them during the runs on their deposits, which was a short term situation caused by the tightening of the money markets. The BoE does this at exorbitant rates as by definition if you need them to step in you will have tried everything else anyway. The enormous sums they have guaranteed against toxic debt are basically blank cheques against the future rather than current spending, and the enormous sums used for quantitive easing are also not really spending but a loosening of the money supply, basically pretending that there is more money around and thereby making each pound worth less.

 

Oh, and I think AIG have already said they are quitting the Soxx and they have got some new people signed up already.

[jimsleftfoot]

Which government though. Banks (and bankers) make a fair bit of cash when the economy is good so I could always see the benefits of buying them out but Northern Rock do not need to advertise and I'm a little bit with Diego that advertising for the Barcodes doesn't do them any favours in Mackemville and Smog town. It will be interesting to see when the government gets its money back from the buying of certain key financial businesses as I'm fairly certain a few Yank banks have paid back the money they were lent to the US government. On a related note I doubt AIG will be sponsoring PLC too much longer and I see Andy Murray is still sponsored by RBS- not sure that one benefits the UK tax payer too much.

 

The bank is expected to be sold later this year and that is the point when they expect the profit.

 

Why does Northern Rock not need to advertise exactly? It is very much normal practice for businesses to advertise. Nethermind businesses, HM Revenue and Customs advertise, the NHS advertise, GCHQ, Univerisities, Councils all advertise. Surely if they advertise then a commercially run bank should advertise. What benefit will the taxpayer get from Northern Rock/RBS advertising? Well, the whole point will be to ultimately make the banks more profitable which would be the best possible outcome for the tax payer. Of course, these advertising campaigns don't guarantee value for money but it would be interesting what Northern Rocks market research says rather than the opinion of the average man on the street.

 

[Diego_Sideburns]

I’m sure there are plenty but that wouldn’t buy Northern Rock products but that doesn’t mean that they are not benefiting from Sponsoring Newcastle. I wonder how many people invest in Northern Rock or bought Sharp products because it was a brand they identify with. There are millions that boycott Mcdonalds products for one reason or another but there are even more that buy from them as it is an established company and brand which people know and maybe ironically trust.

 

Looking at it at an economical level, why does ITV say have the right to benefit over Newcastle United. Both are businesses with investors and employees. Why should Newcastle United be barred from receiving such income just because it is a football club. At the end of the day, this could be seen to be distorting the market and would most likely be against EC law.

 

Now if your saying that they shouldn’t spend money on advertising at all, then that is a different argument altogether but I doubt that people would actually have a problem if the money went to ITV.

 

NUFC should not be barred from receiving such income just because it is a football club, but because it is a comparatively narrow means of reaching the wider public audience. If Northern Rock advertised on ITV it would have a universal audience of potential customers. Advertising via NUFC reduces that audience considerably.