Has Wonga split Newcastle United?

This week’s announcement that Wonga is to sponsor the Premier League football club, Newcastle United, has NOT gone down well with fans, politicians or players. The deal is worth £8 million.

Almost half of their supporters object and local Labour MP Ian Lavery said he will not set foot in the ground again as a result. Worse, Muslim players, Demba Ba, Papiss Cisse, Cheick Tiote and Hatem Ben Arfa may refuse to wear the club’s new sponsor on their shirt.

 

You can’t blame them all for being upset by the deal, as one radio phone in commentator put it, “They are funding the club with profits made from exploiting the poor and vulnerable.”

 

Wonga is the biggest and best know ‘pay day loans’ company in the UK. Pay day loans is a highly controversial business, and probably the most unethical legal business there is in the UK.  These companies prey upon the poor and vulnerable and exploit them by loaning money at astronomical rates – 4,214% APR in the case of Wonga, thanks to exploiting a loophole in the law.

 

Many charities have condemned pay day loan companies, claiming they force people into further debt, and want them banned from advertising. The question many are asking is, why the government hasn’t shut them down? Word is, Labour will if they win the next election – that alone would get my vote. I am no fan of theses highly unethical businesses.

 

Muslims are also upset because under Sharia law you must not benefit from either lending money or receiving money from another person – meaning that interest is prohibited. Shaykh Ibrahim Mogra, assistant secretary general of the Muslim Council of Britain said, “The idea is to protect the vulnerable and the needy from exploitation by the rich and powerful. When they are lending and are charging large amounts of interest, it means the poor will have short-term benefit from the loan but long-term difficulty in paying it back because the rate of interest is not something they can keep up with. The Islamic system is based on a non-interest-based system of transaction.” (Quote from the Independent.)

 

Leader of Newcastle City Council, Nick Forbes, commenting in the Daily Mail said, “I’m appalled and sickened that they would sign a deal with a legal loan shark. 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 on every football shirt that’s sold undermines all our work.” He has suggested that Wonga should put money into debt advice in Newcastle instead. Dream on Nick!

 

Wonga is the smartest of the brands when it comes to marketing (even if the ads are horrible). They are big spenders on big media (TV, posters, buses, radio, etc) while others seem to stick to PPC (digital heroine as it’s known). PPC isn’t exactly smart marketing as it’s a mugs way to catch people (like giving out £5 notes to get people passing into your shop). But Wonga has realised that brand building in this market is essential, and when you have a well known brand, people search for you – so the savings you can make on PPC offset the TV budget. Smart!

 

The trouble is, they have built trust and confidence, because that’s what TV still does better than any other medium, so now look almost respectable.

 

Few would disagree that pay day loans companies represent the lowest ethical level of the financial industry. As one caller on LBC said, “It’s morally no better than exploiting kids, that’s why we banned child labour, pay day loans needs to be next.”

 

Newcastle fans can at least be grateful that their stadium won’t be named the ‘Wonga Stadium’ but instead will be called the St James stadium again (it’s original name) after a spell as the Sports Direct Arena. This isn’t because Wonga cares, it’s because they had to back down after protests. But despite this, many won’t be wearing the Newcastle shirts if it has the Wonga logo on.

 

But Wonga aren’t the only sponsors that have caused concern, gambling and betting companies are also seen as unethical, even if they are more relevant. Aston Villa and Swansea are both sponsored by casino companies, while Bolton, Wigan and Wolves are sponsored by online bookmakers.

 

Despite having a bad ethical image, does Wonga care about the stink? I doubt it, they know that money buys power and influence, however you make it, and clubs need the money, so they know they can exploit them too.

 

Tweet #wonganewcastle

 

 

 

  • simon cooper

    Is this article still in ‘draft’?

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