Loan company Wonga is "considering scrapping" its sponsorship deal with EPL side Newcastle United and "might never go back into TV advertising, after a major fall in profits last year," according to Tim Wallace of CITY AM. Wonga had a "meteoric rise powered by catchy adverts, but profits crashed last year." The lender is paying customers £2.3M ($3.7M) in compensation for "sending debt collection letters from fictional lawyers," and is investing an additional £12M ($19M) in "better trained finance staff, helping pull profits down" 53% to £39.7M ($64M). Newcastle United said that it was "not yet in talks with Wonga over any change to the contract, but the club has come to similar arrangements in the past -- sponsor NTL sold its advertising setup to Northern Rock a decade
ago, mid-way through a deal" (CITY AM, 10/1). INSIDE WORLD FOOTBALL's Mark Baber reported new Wonga Chair Andy Haste has admitted the company "has been lending to people who can't 'reasonably afford the loan in question.'" Having "finally admitted this is the case," 330,000 customers have had their loans written off, "justifying the campaign" by Newcastle supporters, the Church of England, "local and national politicians against the Newcastle United board for advertising a company accused of preying the club's supporters and damaging the local community." Media reports have suggested Wonga has "been looking to cut" its £8M ($12.9M)-a-year sponsorship of Newcastle United, now two years into a 4-year contract. On the other hand, "it is also possible Wonga will see overseas broadcasting of the Premier League as helpful in helping the company to expand its activity abroad," into markets which "lack the financial regulations now being put in place" in the U.K. (INSIDE WORLD FOOTBALL, 10/2).
