Sponsors like Magellan shouldn’t walk away from Cricket Australia

As brands begin to disassociate themselves from Cricket Australia, Jason Rose considers if sponsors are revealing their true colours as nothing but fair-weather friends.

The recent ball tampering fiasco once again highlights the risks for brands of aligning themselves with athletes and sporting codes. It certainly didn’t take long for Magellan, the global fund managers, to rip up their three-year sponsorship deal with Cricket Australia.

I understand why they chose to do so. For a company that invests other peoples’ money, values such as integrity and honesty are central to their brand. They certainly don’t want to be associated with lying and cheating.

However, I wonder if a brand like Magellan – or any other brand – that reacts to a scandal such as the one we have just seen by exercising their right to terminate a contract is actually missing out on a far larger brand-building opportunity.

The simple rationale for a company taking out a high-profile sponsorship is two-fold: first, the exposure of aligning with something of major public interest and, two, the rub-off of associating with something that is loved and admired.

That’s why sport is such a powerful drawcard for sponsorships, because it creates unrivalled passions that companies are willing to pay very large sums for an even marginal association. It’s also why these same companies dive to the ground yelling “grenade” when things go wrong.

To me, the starting point for any marketing decision has to be to assume that the public isn’t completely stupid. No-one believed that Magellan in any way supported the deceit at the centre of the sandpaper fiasco simply because they were a sponsor of the cricket team. The public gets that.

What the scandal actually did was hand Magellan a unique moment to very publicly demonstrate its true values as a business. These moments are rare and should be embraced rather than run away from.

Imagine if rather than calling stumps on its sponsorship, Magellan said that it was deeply disappointed with the actions of Smith, Warner and Bancroft and that the company had seriously considered terminating its relationship with Cricket Australia. Fair enough.

However, after much deliberation, it had decided to continue with its sponsorship because it loves cricket, it understands that sometimes people make mistakes, even egregious ones, and that it takes courage to admit it and to fight to regain respect.

Now, maybe Magellan was looking for an out clause for completely separate reasons, but imagine if it had adopted that kind of approach to the scandal? It would have truly demonstrated far more about itself than what some very expensive signage on the MCG during the Boxing Day Test ever could.

As of last week, they are no different from countless other brands that are fair-weather friends of sports and sporting stars – there for the photo ops in the good times and nowhere to be seen when things turn.

The guys behind Magellan are whip smart and have done exceptionally well by pouring into global equities in recent years. No doubt, however, at some point in the future, they will run into problems. Returns will be down. An employee will do something dodgy. Who knows?

For Magellan’s sake, I hope their customers will show more loyalty, solidarity and understanding than they themselves showed towards Cricket Australia.

Jason Rose is a corporate advisor and co-founder of Manifest.Fund, an early-stage investment fund focused on marketing growth.


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