Water Cooler Talk: Case Study on Controversial Sponsorship

Florida Atlantic University was recently in the news for all the wrong reasons.  They had agreed to a naming rights deal for their stadium with GEO Group.  GEO Group has a controversial past and also runs for profit prisons.  This decision caused a lot of backlash not only from the students but also the community.  Even though the company’s founder gave a lot of money to the scholarship programs at the school this was not enough to stop the backlash.  Finally earlier this week after a month and a half of controversy, Florida Atlantic dropped their deal with GEO Group. 

This situation got me interested in other controversial sponsorship deals.  I am going to break down two other sponsorship deals that have had their own set of issues.  The first sponsorship deal I am going to look at is the National Rifle Association’s sponsorship with NASCAR.

Last month the NRA announced that they will be sponsoring a NASCAR event on April 13^th at the Texas Motor Speedway.  The event will be called the NRA 500.  This sponsorship comes at the same time that the NRA has been posting more advertisements against the people for gun control.    The NRA CEO was quoted saying "NRA members and NASCAR fans love their country and everything that is good and right about America. We salute our flag, volunteer in our churches and communities, cherish our families, and we love racing."

A majority of NASCAR fans support this sponsorship but not everyone is in favor of the decision.  One of these people against this decision is Senator Chris Murphy from Connecticut.  He believes that by accepting this sponsorship NASCAR has picked their side in a huge political debate.  Even if this was not their intention this is how it seems from accepting the deal.  Texas Motor Speedway’s president, Chris Gossage responded by saying this is not about politics but about sports marketing.

In my opinion, I believe this was a bad choice by NASCAR.  With the event only 9 days away it is too late to take away the sponsorship.  This deal is going to cause too much bad publicity that NASCAR does not need.  It was a bad decision from the beginning to pick a side even if that was not the intention.  When the event day finally gets here, I believe there will be people at the event protesting outside of the speedway.

The other sponsorship deal that I am going to discuss is Newcastle United’s deal with Wonga.  Wonga is a company that gives out high interest short term loans.  They are a legal loan shark overseas.  The company takes advantage of poor people without jobs that are in need of quick money.  Many fans have said that they will not set foot in the park if the sponsorship deal stays in place.  The best quote I found was directed at Mike Ashley, the owner of the team, that said “I would love them to honestly answer one question: Would you, Mike Ashley, seriously recommend borrowing money from Wonga at those interest rates?”  There is also speculation that other sponsors will not want to be associated with Wonga and end their deals with the team. 

I have not found any positive reactions to this deal.  A managing director for Wonga said that this is a good commercial deal for both parties.  This means that it is good financially for Newcastle.  If I was Newcastle I would not go through with the deal.  I would not sign the deal and try to keep the fans happy because the fans should be the most important people.  

After examining these cases, I have realized that teams are willing to take the bad publicity for their sponsorship decisions as long as the money is right.  Money has become the most important thing for teams.  Everyone is trying to make as much money as possible and sometimes they do not think about the consequences.  Hopefully in the future, teams realize the mistakes of taking these deals before they agree to them.      

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Greg Monforte is a Drexel University Sport Management pre-junior from South Jersey.  Currently he works at Not Just Pizza in Sicklerville, NJ and Daddis Fight Camps in Philadelphia where he has social media and marketing responsibilities.  Greg is also the SMTSU Director of Marketing & Outreach.  Follow Greg on Twitter @Greg_Monforte.

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