Of Payday Lender Football Sponsorship and Islam

Shirt sponsors obviously occupy the best camera-estate you can buy on football jerseys. In the past, there have been infamous companies occupying this space alike the late AIG with the world's most famous football club, Manchester United. Unfortunately for the Mancunians, they had to sport the disgraced firm's logo even after its spectacular implosion during the global financial crisis. That said, Manchester United too has its own share of American stinkers.

Earlier on, I was rather dismayed that one of the top economics blogs in the blogosphere cataloguing the various follies of high finance had banner ads from, of all things, a payday lender. While I understand if blogs wish to gain some advertising revenue, surely they could choose better businesses to advertise than those preying on folks who've fallen under hard economic times by extending short-term loans at exorbitant interest rates? Fortunately, most of these blogs became more selective in choosing advertising on their sites since then.

I wish the same could be said about the English (British?) Premier League. While there have been outright stinkers alike the aforementioned AIG, there have been heartwarming instances too alike Aston Villa having the children's hospice Acorns as its unpaid shirt sponsor. (Yes, I am a Villa fan since I am partial to championing lost causes.) Then again, commercial pressures led Aston Villa to sponsor a Cypriot forex trading site then a Chinese casino developer.

However, how about having a payday lender for a shirt sponsor? Is it really that much worse than online financial speculation or bricks 'n'n mortar gambling? UK lawmakers apparently believe so as they've criticized Newcastle United's new deal with payday lender Wonga (it's British slang for money):

Newcastle United's £24m four-year sponsorship deal with Wonga, the high interest, short-term "payday" loan company, has been greeted by a storm of protest from MPs, campaigners against debt and supporters. Derek Llambias, the club's managing director, said the deal will provide money for the club's youth academy and community work, as well as to boost the first team...

The backlash began even before Newcastle confirmed they had signed the deal with Wonga, whose loans charge interest at an average annual percentage rate of 4,214%. Wonga says although that figure is accurate, it does not represent the reality of its loans, which are for a maximum 30 days at 1% interest a day, with compound interest not being charged as for the APR calculation.

However Stella Creasy, the Labour MP for Walthamstow, who has for two years led a campaign against Wonga, including its sponsorship of the [lower division] Blackpool and Hearts football clubs, describes payday loan companies as "legal loan sharks". She wants the government to impose a legal cap on lending rates, at much lower than 4,214%, as happens in most other European countries.

In July the Football Supporters' Federation called on the football authorities to ban Wonga from advertising or sponsorship until such regulation of the industry comes into force. Nick Forbes, the leader of Newcastle city council, said he was "appalled and sickened" that Newcastle would "sign a deal with a legal loan shark".

Northumberland and Newcastle MPs including Ian Lavery, MP for Wansbeck, and Chi Onwurah, MP for Newcastle Central, also expressed outrage. "Some of the richest young men in Newcastle to wear shirts calling on the poorest to go to a legal loan shark," Onwurah tweeted.

There's also the quite relevant factoid that Newcastle United has several (actually quite good) players of Islamic faith. Their religion of course looks down on charging interest--let alone at rates that are quite honestly usurious. Is there a player boycott in the offing with regard to Wonga?

Four Muslim players – Demba Ba, Papiss Cissé, Cheik Tioté and Hatem Ben Arfa – started against Manchester United on Sunday. "Assuming all four are on the pitch at the same time, if you have seven out of 11 [with the sponsor on their shirts] you have sufficient coverage," Shaykh Ibrahim Mogra, assistant secretary general of the MCB, told the Independent. "It is not asking too much, I believe."

It's a very interesting brew of sports, commercial pressures, multiculturalism and religion. Consider too that the UK is well and truly in recession with the north of the country being particularly hard-hit. I do believe that having a payday lender as a title sponsor crosses the line. While football and finance are inextricably linked, some things are just too crass even for me.