GAMBLING SPONSORSHIP BAN IN PREMIER LEAGUE

Introduction

 

Sponsors have always been an important source of income for teams, including partnerships between betting companies and Premier League clubs. The relationship between football clubs and betting companies has been a controversial subject for many years. Currently, eight Premier League clubs have betting companies as front of the shirt sponsors, with the collective value of those contracts amounting to £60 million per year.

In recent times, there has been a change of approach and an outcry for restrictions and bans upon gambling sponsorship. This has gathered momentum an led to a ground breaking agreement under which all 20 Premier League clubs have collectively agreed to withdraw gambling sponsorship from the front of match day shirts, a move which will come into effect at the end of the 2025/2026 season. The decision has been made to reduce the exposure of gambling advertising.

 

Financial Implications

 

The financial benefits on offer from the gambling sector are often greater than other sponsorship deals. For football clubs, these sponsorship deals are a valuable source of revenue, aiding in acquiring talent, enhancing infrastructure and remaining competitive. Whilst the traditional big six clubs do not have major agreements with betting companies, it is the next caliber of clubs that will be affected. There is a large probability that the ban will manifest into the English Football League, where gambling partnerships generate club revenues of over £40 million annually and over 50% of clubs have commercial partnerships with brands in the gambling sector.

It is too early to assess the financial impact of such a ban in the UK. The English game is following in the footsteps of Italy and Spain. Italy introduced a gambling ban in July 2019 and the ban in Spain was introduced in November 2020. The financial impact on football clubs in both countries isn’t as big as it seems. In Italy, shirt sponsorship revenues have actually increased post ban by more than £20 million, with only two clubs, Roma and Lazio losing sponsorship deals with betting firms. The immediate dip in broadcast revenue and overall club revenue has been blamed on the Covid 19 pandemic and not the ban on gambling sponsorships. In Spain, eight La Liga clubs and three second division clubs have had to find new main shirt sponsors because of agreements they had with betting companies and only one club did not have a main shirt sponsor for the 2020-2021 season.

In the English League, the gambling partnerships are worth £4 million – £6 million annually to each club, with the majority residing in the bottom half of the table, which pales in comparison to the tens of millions the so called big six teams earn each year from their shirt sponsorship deals. Nevertheless, the sides outside the European places are typically much more reliant on TV money for the bulk of their income, meaning the revenue hole left by departing betting sponsors is unlikely to be significant. In addition, gambling brands can still feature in other areas, which include shirt sleeves and on advertising hoardings, beyond the 2025-2026 campaign. Clubs can take advantage of the increased competition for that inventory by driving up their asking price. The general consensus is that there is an increased confidence clubs will be able to adapt to the gambling ban and not be disadvantaged in the long run, as seen in Italy and Spain.

Alternative Considerations for Football Clubs


A ban on gambling partnerships will offer an opportunity for brands in other sectors to fill the void. There is an acceptance that clubs will need to be more agile in marketing and how they package their shirt sponsorship rights in order to drive revenue.

Legal Considerations


Before clubs can seek to obtain revenue elsewhere, they must initially terminate any current deals with gambling companies. A typical sponsorship agreement will contain termination rights to enable both the clubs and sponsors to path ways. In addition to the classic boilerplate provisions, a prominent issue to consider would be to include a provision to terminate where legislative or regulatory changes are introduced such as a gambling sponsorships ban during the term of the agreement which would restrict and inhibit both parties from continuing with the partnership.


Conclusion


A few can argue that gambling sponsorship is an issue not worth tackling. How effective such a ban will be remains to be seen as there are many avenues betting companies can use to have their name shown, nevertheless it does seem like a major step in the right direction. One of the challenges faced by clubs is how they will attract other sponsorship revenues to fund the gap left by the withdrawal of gambling sponsorships, although there is little evidence to suggest that clubs will suffer a financial crisis because of a betting ban. It seems likely that there will be a blanket ban on gambling sponsorship across Football in England, making it even more important for Football clubs to have the right instruments in place to deal with any impact, from both a financial and legal perspective.