What effect does a gambling partnership have on fellow sponsors?

What effect does a gambling partnership have on fellow sponsors?

Nottingham Forest recently announced a two-year sponsorship deal with TGP Europe-owned Kaiyun Sports. The East Midlands club has struggled to secure commercial sponsorship since its arrangement with BOXT expired at the end of the 21/22 season. It now joins Aston Villa, Crystal Palace, Real Madrid, and Inter Milan in partnering with the obscure gambling website. In this article, we take a look at what these partnerships mean reputationally for existing sponsors.

Since arriving in the Premier League, Nottingham Forest has been holding out for a £10m sponsor deal. That lofty evaluation is over double The Sponsor’s Fair Market Value for the club at £3.9m. Quite reasonably, potential partners were hesitant to invest in the inflated prices that betting companies have fostered.

How does this fit with Forest’s existing approach?

Despite previously lacking a commercial front-of-shirt sponsor, the Nottingham club hosted the logo of UK for UNHCR, the UN’s Refugee Agency, on their matchday shirts midway through the 22/23 season. Club owner Evangelos Marinakis stated "I hope fans of Nottingham Forest will also be proud that we have chosen to highlight the work of UNHCR…in addition to the local causes our Community Trust supports.” The partnership showed a club using sponsorship, albeit temporarily, for a positive cause in conjunction with its own activities in the community. The shift in tone to a betting firm on the front of Forest shirts obscures the club’s values and means that its platform for other sponsors is a harder place from which to communicate.

New and existing sponsors need to take notice

Part of the attraction of sponsorship opportunities like this is the club’s historic presence in and importance to the community; each of the principal partners (Adidas, Ideagen, e.on, The Park Hospital) are operational in Nottingham. While it has relationships with top-flight clubs, Kaiyun Sports’ press release with Nottingham Forest was vague and uncommunicative. It did not mention the words “betting” or “gambling” despite being a betting website and gave no indication of specific brand activations.

That Kaiyun sports is generally irrelevant to the area will have an impact on related brands. It shows the club ignoring its fanbase and even its wellbeing by undoing their work to promote healthy gambling. For brands looking to promote family and community, this deal changes the perception of Nottingham Forest and by extension the values it can convey. The deal represents a missed opportunity for more relevant potential partners to tap into Forest’s core audience and reflects poorly on related brands. Then again, with their increased scrutiny, betting firms and gambling-related platforms are willing to pay more than others to compensate for their diminished position and the negative effects they have on their business surroundings.

Why fans and community matter in sponsorship

Sponsors should watch closely at the fan reaction to Forest’s gambling partnership. Chelsea’s proposed and aborted partnership with Stake.com in July shows that this issue really does matter to fans; when a brand disconnects from its audience, the sponsorship strength across the board atrophies. A striking 77% of 3,297 fans polled either disagreed or strongly disagreed with the decision to partner with Stake.com. If sponsorship is seen solely as a question of money, it becomes a superficial venture. While this deal with Kaiyun has gone through, Forest’s next sponsor will want to address the community and the shareholders if it wants an engaged audience.

In the immediate future, other brands sponsoring clubs alongside gambling firms should consider the strength of their position. Not only is their reputation harmed by association, but due to a damaged relationship with the community, the ability to leverage sponsorship is reduced.

Sponsors that fuel the fan-club relationship will always be able to mutually strengthen brand identity. Those that intercept or splice this relationship through non-alignment will produce a knock on effect towards other sponsors that starts with a loss of faith and/or interest.