Should political factors be taken into consideration when signing sports sponsorship deals?

Should Political factors be taken into consideration when signing sports sponsorship deals?

With FC Barcelona sponsor Qatar Airways now one of the many entities blacklisted by Saudi Arabia, fans in the country who wear the club’s shirt could face fines of up to $200,000 and 15 years in jail.

The political crossfire illustrates the difficulties rights holders can face through their commercial partners and begs the question: to what extent should political factors be taken into consideration when signing sports sponsorship deals?

Omar Al Raisi, founder of Dantani Inc Sports, who is based of Abu Dhabi, said: "Yes definitely, the brands and sponsors have to be wary of the geopolitical landscape before entering into sponsorship agreements with clubs. It is a tricky subject to deal with in terms of contractual clauses as these situations are out of the clubs or sports organizations hands. It would almost be like asking to pay less if there's a cancelation of the game due to a thunder storm. It is nature’s call."

He further added: "But I'm sure there could be a common ground where both parties can negotiate in advance that if any political situation arises in any of the territories that they have signed up for, they could compensate it by either providing them extra exposure in other territories or perhaps the club providing the sponsor 20% concession, which I assume would be a very difficult point to negotiate.

"Politics has no place in sports and it should remain that way. Or else all parties involved: fans, the leagues, broadcasters and clubs, they all suffer."

Also, post-Brexit we have seen English football clubs suffer consequences as British footballers' price-tags rapidly increased. West Ham United’s David Gold and Stoke City’s Peter Coates have already spoken to the UK's Prime Minister to make footballer's exempt from post-Brexit immigration controls.

The Drum also spoke with Adrian Wright who was the Premier League sales and marketing director for West Bromwich Albion Football Club and is now founder/ceo of Sporting Group International. He said: "I think crossing a commercial arrangement into a political position is very dangerous and, bear in mind the brand which engages with the club or association that resides in country that may have political issues, and they have no jurisdiction over the actions of their government. So I think once again joining in any form of partnership in the sponsorship arena is always open to things that no one can ever foresee."

He further added: “The brands and the clubs should look at the track record of the organisation governed by the commercial side of the business: how successful it is and what their board look like? Using the political angle to reduce any form of liability from a sponsor perspective should definitely not happen.”

However, sometimes it’s not just the political factors but economical factors as well. The Drum reported earlier how General Motors' India departure will 'limit' Manchester United's jersey deal engagement as well. China’s heavy investment into sports sector has attracted global sports brands to invest in their country and partner with various Chinese brands. For example: Fifa strikes sponsorship deal with third Chinese brand after agreeing $450m partnership with smartphone maker Vivo.

With the current world political scenario, it is important that both the sports brands and sponsor take these factors into consideration and transcend through these as their fans are based all over the world.

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Taruka Srivastav

I march to the Indian beat of The Drum.

All by Taruka