For those without a finger on the pulse of English Football League stadium names, Queens Park Rangers’ Loftus Road stadium will be known as the Kiyan Prince Foundation Stadium from the start of the 2019/2020 season. The foundation is a local charity set up in 2008 following the tragic fatal stabbing in 2006 of Kiyan Prince, a promising player in QPR’s youth set up.
As the new English football season kicks off, we’ll be looking at QPR’s decision to gift its stadium naming rights, in the context of charity and today’s football game. We’ll also use this example to explore corporate partnerships between businesses and charities, and highlight the vital considerations when drafting corporate partnership agreements.
More than just a game?
Putting the commercial success of elite level football to one side for a moment, we see charity and football overlap in many ways. Clubs at all levels are often intrinsically linked to their local communities, through donations to local charities and sports and educational programmes. Some even offer job opportunities through local business connections. Players are also regularly seen volunteering at local community projects and visiting hospitals and hospices throughout the year.
One example of such a partnership is Barcelona’s display of UNICEF’s name and logo on the front of its shirts in 2006. This was the first time the club ever displayed a name on the front of its shirt, non-profit or otherwise, in its 107 year history.
A more recent example, and slightly closer to home, is the English Football League’s partnership with mental health charity Mind. For the 2018/2019 and 2019/2020 seasons, all 72 clubs in the EFL will wear the charity’s logo next to each player’s name on the backs of their shirts. This and other initiatives between Mind and the EFL have “a goal to enhance and improve the way that football, sport and society approaches mental health” and aim “to increase awareness and understanding amongst fans, clubs and staff alike”.
Although there are many examples of charitable initiatives in football, it was still a surprise to see QPR gifting the name of their stadium to a local charity, particularly when football clubs are seeking to commercialise every asset to secure financial and sporting success.
It was all the more surprising, given that QPR were playing in the Premier League as recently as 2015 and have ambitions to return to the top flight as soon as possible. And, like all clubs, QPR needs to stay on the right side of the Financial Fair Play rules, which they have come up against in the past. To put this in context, Premier League clubs such as Manchester City and Arsenal are reported to generate approximately £35m a season between them, through their respective Etihad Stadium and Emirates Stadium naming deals.
The perfect match?
In this instance, QPR has demonstrated real community credentials by gifting its stadium naming rights to a local charity deeply linked with the club, rather than simply raising funds to take the club to the next level. In this instance, charity starts at home games.
Perhaps this will now inspire similar corporate partnerships, at a time when charities are increasingly looking at alternative revenue streams and more innovative ways to generate awareness.
Structuring corporate partnerships
Charities do need to consider these corporate relationships carefully to ensure they are appropriately structured and there is a synergy between the two organisations.
These partnerships often appeal to the corporate entity as a way of differentiating themselves from competitors, and promoting their own social responsibility agenda by leveraging the goodwill and reputation of a charity partner. In return, a charity will often be licensing its most valuable assets – its name and logo – and by extension its reputation.
It’s essential to have a contract that documents and manages the expectations of both parties. This should include the promotional activities to be undertaken, the level of funds the partnership is expected to generate, and continued control for both parties over use of their respective brands. Such an agreement is an absolute legal requirement if the proposed fundraising involves any element of cause-related marketing (CRM), where a corporate entity promises to pay the charity a proportion of sales from any goods or services.
We always advise a corporate partnership agreement between a business and a charity should include:
- Relevant commercial participation provisions (for example, capturing the regulatory requirements of any CRM arrangement);
- Intellectual property licences making it clear what rights each party has over the other’s branding (including trade marks), in what context that branding can be used and in what circumstances a party’s approval is needed;
- Promotional obligations such as any commercial tie-ups and volunteering/appearance days; and
- All funds generated by the business to be held in a separate ring-fenced account and transferred to the charity at regular intervals.
Corporate sponsorship relationships can also offer charities much more than just additional funds, and many non-profits are now looking at the additional impact these partnerships can bring. A good example of this is Morgan Stanley’s “Strategy Challenge”, where the company aims to help its chosen charity partners develop action plans to address their key strategic issues.
Let’s look back at the Barcelona example. Although the club was lauded by many for paying UNICEF €1.5m per year to display the UNICEF logo on their shirt, there are serious lessons to be learned. The club was later criticised heavily for moving the charity logo to the back of their shirts. The front later displayed the Qatar Foundation instead. Barcelona explained the change was to help address their financial difficulties, and pointed out that the Qatar Foundation was a non-profit organisation supporting its country’s education and technological development.
This received short shrift from many. It was dismissed as a thinly veiled commercial arrangement – another example of money-hungry football showing its true colours. It is only fair to note that Barcelona continues to support UNICEF (extending its annual donations to at least 2020) despite no longer featuring any visible UNICEF assets on its kit. It has also donated around €15 million to the charity between 2006 and 2016.
Perhaps the real question is whether Barcelona should have been so heavily criticised for doing something a bit different and putting a charity on its most visible asset – compared to a lot of teams that have never taken such an initiative?
As far as QPR is concerned, we’ll have to wait and see how long this arrangement lasts. For the time being, the club’s decision is highly commendable, considering how much it could have gained financially from a more conventional stadium sponsor. And while QPR might not be on the same level as the Catalan giants, Barcelona and the UNICEF example shows that QPR should be (and no doubt will be) aware they must manage this partnership with great sensitivity and an appropriate structure, to avoid risking a backlash from fans and regulators alike.
Our Charities and Social Ventures team can help you think through the issues around corporate partnership relationships, whether you are a prospective sponsor or charity recipient.