NEWCASTLE United have agreed a new £24m shirt sponsorship deal with payday loan company Wonga. The partnership with the a leading player in this controversial sector of the finance industry has angered some. But for others, it is just a business deal, plain and simple.
PAUL KELLY found out if people on the streets of South Shields considered it morally wrong.
IT was deadlock on the streets of King Street over the rights and wrongs of Newcastle United’s controversial sponsorship deal with payday loan company Wonga.
Shoppers were evenly divided between those who were against and those for the four-year deal.
Some saw the association with the high interest lender as lowering the great club’s reputation.
Others were more pragmatic, accepting the association as a price worth paying - as long as the money is invested in the team.
With its jokey name and knowing marketing, Wonga has become the most visible company making “payday” loans - a fast growing business in the recession.
The interest on Wonga’s loans, one per cent a day, calculates over a year to an astonishing annual percentage rate (APR) of 4,214 per cent.
“It’s all a bit grubby,” said Newcastle United fan Dave Mortimer, 41, from South Shields.
The offshore worker said: “Have you seen the money some people have to pay back on those Wonga loans? The average APR is into thousands of per cent. It’s scandalous. The club really shouldn’t be getting involved with a company like that.”
Sunderland supporter Chris Harris, 28, agreed that loan companies are regarded as “exploitative”, but said fans should see the “bigger picture”.
He added: “At least they have got St James’s Park back. That was a clever move. Most fans would have any name on their shirt if it was helping to bring success on the field. That’s what counts.”
South Shields sales assistant Gary Oldman, 23, said: “There should be some consideration given to the ethics of a company before a club enters into a sponsorship deal. It shouldn’t be all about money.
“I believe Wonga offers a service which is morally wrong. Companies like that can leave people in crippling debt.”
Gary Porter, 45, of Western Approach, Laygate, South Shields, said: “It’s all a question of how the money is spent. If it ploughed into the purchase of new players, then I can see the logic of the deal.
“Getting the St James’s Park name back was an excellent move too.”
Sunderland supporter Phil Goodfellow, 37, co-owner of Northern Threads in Ocean Road, has a businessman’s approach to the deal.
He said: “I’d say good on them. If it drives up revenue that will be spent in the right areas, it has to be a positive move for the club. Look at the Provident, that’s been going for 30 years. We still have ‘Provi’ collectors. These companies are not a new phenomenon.
“If it takes the club in the right direction, as in investing in players, youth development and ground improvements, it should be welcomed.”
Bill Appleton, 82, of Harton Village, Sputh Shields, added: “I think it’s morally wrong. The owner’s only interested in money, not ethics.”