Sponsors Should Do the Right Thing, But Not at Fans’ Expense
Amid the storm surrounding Premier League club Chelsea FC this past week was the news that Three, the club’s jersey sponsor, was “suspending” its sponsorship in the wake of the U.K. government’s sanctions against owner—for now—Roman Abramovich.
(Editor's note: A day after this post was written, Hyundai, the Blues' official global automotive partner, joined Three in suspending its "marketing and communications activities with the Club.")
Two elements of the mobile telecom company’s announcement confuse me.
The first is the reasoning behind the decision. As this blog discussed two weeks ago, swiftly cutting ties with people and organizations connected to events as horrific as Russian leader Vladimir Putin’s invasion of Ukraine is not only the right thing to do morally, it’s good for business.
However, it can be reasonably argued that Chelsea FC is not connected to Putin’s government. It certainly was closely tied through its owner just days ago, but with Abramovich now legally cut off from the club and with the sale of the team in motion, Chelsea sponsors are no longer at risk of supporting a Russian oligarch.
Two other major club partners, hotel search engine Trivago—which has its name on player training uniforms—and kit supplier Nike seemingly understand this, as both companies announced they would continue their sponsorships.
The organization has been thrown into chaos, not only as a frozen asset with limits on revenue generation and spending, but also because no one knows when it will be sold, to whom or for how much.
This state of abeyance is not good for the team’s players, staff or fans and Three’s decision merely rubs salt in the wounds. A curious choice for a company that has spent tens of millions of dollars over the past two years to tap into their passion and loyalty for the club.
The second confounding element is the idea of “suspending” a sponsorship. This is a concept that first appeared on the scene in the aftermath of the Donald Sterling scandal nearly eight years ago, when many L.A. Clippers sponsors announced they would “suspend” or “pause” their partnerships.
These are terms that unless defined in a sponsorship agreement—language I have never seen in a contract—are without literal meaning. Typically, a company is either a sponsor or they are not; there is no legally agreed upon sponsorship limbo. You can suspend activation and marketing activities, but if you no longer want to be a sponsor, then you have to exercise your right to exit the agreement.
Although the practical application of the term is unclear, the reason why a company would announce a sponsorship suspension is not. It allows the company to have its cake and eat it too. A marketer can disassociate its brand from any controversy surrounding the property while keeping its options open pending a resolution.
Viewed through that lens, a public suspension—whatever it means—is a smart move. But in the relationship between Three and Chelsea, it’s unnecessary.