Newcastle United ditching Wonga is a big fat red herring
The media are reporting that Newcastle United will be ‘ditching’ Wonga when their four year sponsorship deal ends next summer.
A bit of a red herring this story and not exactly telling the whole truth.
A very belated government crackdown on payday lenders basically wrecked Wonga’s ruthless business model.
This led to a £37.3m loss by Wonga in 2014 and when the figures for 2015 were released in May, the slide had picked up some momentum!
The 2015 losses were £80.2m and the company saw revenue drop from £217.2m to only £77.3m, Wonga blaming the regulatory body’s stricter lending criteria and introduction of a regulatory price cap.
With the UK government acting to bring this industry in line with the regulations in more forward thinking countries, it means Wonga can surely never return to the days of ridiculous high profits thanks to the public’s desperation for quick cash.
As the deal with Newcastle United ends at the culmination of this 2016/17 season, the shrinking nature (by two thirds when 2015 figures released £217m to £77m) of Wonga’s business means they were never ever going to even attempt to extend their relationship with NUFC.
To give Mike Ashley any kind of credit for supposedly choosing to not deal with Wonga anymore is clearly ridiculous.
The payday loans company have massively cut back on their advertising and to shell out £6m a year or more on sponsoring Newcastle United would make no sense at all.
When looking at who will take over as from next season, let’s hope that Ashley and his minions have both their financial and moral (at least up to a point!) heads on. The association with Wonga dragged the (one-time) good name of NUFC into the gutter and it didn’t even make financial sense, with many thousands of fans refusing to buy the replica shirts because of who the sponsor was.
When Wonga was added to the list of Mike Ashley’s crimes against the good name of Newcastle, many fans were appalled.
One of the poorest regions in the UK having a legal loan shark charging ridiculous levels of interest emblazoned across the shirt of it’s football club, yet another reason for the once good name of the club to be dragged through the mud.
In the meantime, those against having the payday loan company associated with the club were given some small relief.
Back in 2014 Wonga belatedly agreed to not put the inappropriate logo on shirts for children, although due to ‘production schedules’ they said this couldn’t be done until shirts going on sale for the 2016/17 season.
So when the new NUFC home shirt went on sale (the same when the second and third strips go on sale), the kit for kids didn’t have Wonga ruining the effect.
Darryl Bowman, Wonga’s marketing director – November 2014:
“As a responsible lender we believe removing our logo from children’s replica shirts and training wear is the right thing to do. We appreciate the club’s support in this matter.”
If you would like to feature on The Mag, submit your article to [email protected]