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Volume 6 No. 211

Marketing and Sponsorship

Cricket Australia and the Commonwealth Bank have finalized a sponsorship extension that will see the bank become the Test team and Test Series partner for the next four Australian seasons beginning with this summer's Ashes Series. The bank will also sponsor the Southern Stars women's team (CA). A Cricket Australia source says the deal is worth more than $50M (SBD Global). BLOOMBERG's Dan Baynes reported CBA, which has sponsored Australia’s home one-day matches for the past six years and has other deals in place with the Big Bash League, Cricket Victoria and the top-ranked Australian women’s team, "replaces Vodafone as the main backer of Test cricket in the country." Vodafone’s 11-year sponsorship of five-day matches "ended in January" (BLOOMBERG, 5/14).

Experts said that "endorsement contracts are undergoing a major shift, and it's due to scandal," according to Daniel Roberts of SPORTS ILLUSTRATED. Former IMG General Counsel Peter Carfagna said, "This whole industry has changed because of ... Lance Armstrong, not so much Tiger or other scandals. He had federal sponsors, like the postal service, and what recourse do they have when it is alleged, now, that he fraudulently induced them at a time when he was doping. He must have given them some rep that he was clean." So "how do companies now protect themselves when signing a deal with an athlete they believe is squeaky clean?" For one thing, there are often "clawback clauses" that allow a sponsor to recoup its investments (even money they already paid a star) if they "can prove that the athlete misrepresented himself when the contract was signed." But that can be difficult to prove. The language of a contract depends on leverage, and the amount of security a company "can work in to protect itself is higher if the athlete has made mistakes in the past." In the wake of so many high-profile athlete scandals, the balance of the reps and warranties "are shifting in favor of the companies." And yet the endorsement contracts "aren't only protecting companies against the athlete doing something illegal." What about scandals that "ruin a player's reputation even when he didn't technically break any law?" Thus: "the morals clause." Morals clauses "aren't new, either, but they are getting far stricter." And a guy "can cause damage to his sponsors not just with a serious crime, ethical misstep, or public outburst, he can do it on social media, too." That's the other big change "causing companies to use tougher trigger language allowing them to suspend deals." The widespread flood of social media and its prevalent use -- by everyone, from fans to officials, coaches and even the athletes themselves -- "had permanently altered the language of contracts" (SI, 5/14).

Basketball Bundesliga (BBL) club BBC Bayreuth has ended its three-year sponsorship deal with energy provider TenneT. The club will reveal its new shirt sponsor at the BBC event "Sports meets Business" on June 2 (BBC Bayreuth). ... German 3rd League football team Hansa Rostock has welcomed fan initiative "A.F.D.F.C.H. - Alles für den FC Hansa" (Everything for FC Hansa) as its new sleeve sponsor. Every fan who wanted to be part of the initiative was asked to pay a minimum of €19.65 ($25.90). The initiative expected to raise a total of €1,965 ($2,590). However, more than 250 fans have taken part in the initiative and donated more than €5,000 ($6,600) in only two days (Hansa Rostock). ... National Rugby League Newcastle Knights agreed to a new sponsorship with local real estate agency Robinson Property. The company will become the official real estate partner of the Knights for the remainder of the '13 and '14 seasons (Newcastle Knights).