Newcastle deal raises a storm
NEWCASTLE United’s €30m four-year sponsorship deal with Wonga, the high interest, short-term “payday” loan company, has been greeted by a storm of protest from British MPs, campaigners against debt and supporters.
Derek Llambias, the club’s managing director, said the deal will provide money for the club’s youth academy and community work, as well as boost the first team. It emerged yesterday the deal also includes naming rights for the club’s stadium although Wonga will restore the Sports Direct Arena to its traditional name, St James’ Park.
“We are building a club that can regularly compete for top honours at the highest level,” Llambias said. “As everyone knows, a strong commercial programme is vital to this goal and I am delighted to welcome Wonga into the fold as our lead commercial partner.”
The backlash began even before Newcastle confirmed they had signed the deal with Wonga, whose loans charge interest at an average annual 4,214 per cent.
Wonga say although that figure is accurate, it does not represent the reality of their loans, which are for a maximum 30 days at 1 per cent interest a day, with “compound” interest not being charged as for the APR calculation.
However, Stella Creasy, Labour MP for Walthamstow, who has for two years led a campaign against Wonga, including its sponsorship of football clubs Blackpool and Hearts, describes payday loan companies as “legal loan sharks”. She wants the British government to impose a legal cap on lending rates, at much lower than 4,214 per cent, as happens in all other European countries.
In July the Football Supporters Federation called on the football authorities to ban Wonga from advertising or sponsorship until such regulation of the industry comes into force. Nick Forbes, the leader of Newcastle city council, said he was “appalled and sickened” that Newcastle would “sign a deal with a legal loan shark”.
Michael Martin, editor of the long-established True Faith fanzine, said the deal was “shameful”.