New Health & Care Bill: the effect on sponsorship in football

Published on
9 min read

Carabao, Cadbury, Gatorade, Coca Cola. Just some of the well-known food and drink producers which sponsor or partner with household name athletes, sports clubs and competitions, often to the tune of tens of millions of pounds each year. But could these sponsorships, which provide huge exposure for the brands and generate significant income for sports stakeholders across the country, be at risk from the proposed new Health and Care Bill being introduced by the UK Government?

In 2018, the Government set a target to halve childhood obesity by 2030, and some evidence suggests that exposure to the advertising of unhealthy products results in increased consumption by children of those products, which has a negative impact on their health. Therefore, this legislation is being introduced in part to reduce the time and means by which companies can advertise “less healthy food and drink” products on television, by ‘on-demand’ media services and the internet.

Importantly, the limitations and prohibitions introduced by the legislation specifically include advertising of unhealthy food and drink by way of certain forms of sponsorship.

If, as expected, the legislation squeezes the means by which food and drink brands can exercise sponsorship rights, this could have a significant impact on the future values of domestic rights in this important sponsorship category. In turn, this could also hit the bottom line of the UK sports industry as a whole.

Certainly, there will need to be careful consideration by clubs and governing bodies of the types of companies they are, or are looking to partner with, which will affect all aspects of the footballing pyramid. Cadbury for instance, has been adding to its roster of elite football clubs, signing global agreements with Manchester United, Arsenal and Chelsea. The EFL has been with Carabao for a number of years now. Even smaller clubs may well be susceptible; Plymouth Argyle’s shirts are sponsored by Ginsters pasty company. In addition, there are the sponsors that could fall into a grey area, such as the FA’s partnership with Deliveroo, which will require careful analysis of the final form of the Bill.

However, interestingly, the legislation is also being introduced at a time when athletes and sports organisations are increasingly mindful of the need to work with sponsors whose values, products and messaging align with those of the athlete or organisation. As seen during the well-publicised Cristiano Ronaldo press conference during the Euros, this includes messaging to promote healthy living and to increase participation in sport at a grass roots level, particularly when this is voiced to a younger audience.

Industry expert opinion

We approached a number of the country’s leading sports sponsorship experts for their take on the potential impact of the Bill, and you will see their comments at various points below. The general consensus is that, although the Bill will potentially affect the sponsorship landscape, it’s likely that clubs and sponsors will work their way through the changes; whether through an increased focus on healthier products, or by simply being more creative in the manner in which fans are engaged.

What does the legislation say?

It is important to note that this legislation is not yet in force. It has now reached committee stage in the House of Lords, during which the text is analysed line by line. We are likely to see the Bill, albeit with amendments, formerly become law towards the end of 2022.

So what exactly is being proposed?

The relevant part of this new legislation is contained in Schedule 17 of the Bill, which can be summarised as follows:

Sponsorship  

As stated above, the watershed and online prohibition on advertising of HFSS products specifically includes advertising by way of sponsorship. The relevant sections of the Bill refer to the following:

  • in the case of TV advertising: “…advertisements under a sponsorship agreement and anything else which, under a sponsorship agreement, is included in a television programme service, other than in a television programme”
  • in the case of on-demand advertising: “advertisements and sponsorship announcements under a sponsorship agreement”
  • in the case of online advertising: “…paying under a sponsorship agreement as a result of which advertisements are placed on the internet”

Typical sponsorship rights and activations

It is clear then that we should anticipate that some advertising that normally arises from sponsorship activity will be curtailed or prohibited under the Bill. For example, it appears that conventional TV broadcast sponsorship will be covered by the above wording. Similarly, it appears that social media posts forming part of a sponsorship deal involving the advertisement of HFSS products would also be captured.

However, it is less clear exactly how far the above legislation will eat into other forms of sports sponsorship, for example shirt sponsorships, press conference background branding and sponsor activations that are likely to be displayed online.

This Bill certainly has the potential to severely hamper the ability of ‘unhealthy’ food and drinks sponsors to exercise the rights to advertise products they would usually expect in return for their cash: use of players for TV advertisements, social media campaigns with clubs, in-programme advertisements on streaming platforms. This will restrict the market, and a significant reduction in investment by this sector could follow.

This is noted by Chis Bell, Commercial Director at Luton Town Football Club, who says:

“Sports sponsorship is a powerful tool to align brands with tournaments, leagues and clubs. The wide variety of brands that support sport adds great variety and choice to the sponsorship landscape. The messaging and channels used by clubs is closely monitored by the clubs to ensure we give the right message to the right people. Introducing a blanket ban on certain industries, some of which have supported sport for decades, would reduce the diversity in the sponsorship market.

This would prove challenging commercially as the available markets would reduce, more importantly this would take a responsible guardian out of the communication chain between companies and consumers. I recognise consuming certain products and services excessively can be harmful. Sport can be a valuable vehicle to promote and educate good values and habits.”

However, much of the details relating to sponsorship and permitted or prohibited activity are currently unclear. Set out below are the typical mediums used by football clubs to advertise their sponsors, and the possible (but by no means confirmed) implications of the new Bill:

Typical Football Club Rights / Activation

Product Advertising:

Permitted or Prohibited? Our predictions

Front of shirt sponsorship

Permitted, but subject to activation restrictions

Club website branding (eg logos, product imagery)

Prohibited if display of branding considered ‘advertising’ 

Social media branding (eg logos, product imagery)

Prohibited if display of branding considered ‘advertising’ 

Social media advertising (eg product adverts shown on club social media channels)

Prohibited if display of branding considered ‘advertising’ 

Pitch-side LED advertising

Unclear, especially if relevant matches are televised / streamed / online

Interview backdrop branding

Unclear, especially if relevant branding is televised / streamed / online

Product placements (eg products placed on interview tables)

Unclear, especially if relevant branding is televised / streamed / online

TV advertising during relevant matches

Prohibited

Club TV channel advertising

Prohibited

 

More questions than answers?

However, the great uncertainty lies with the distinction between brand advertising and sponsorship, which is permitted, and ‘paid-for product specific sponsorship’, a throw away phrase included at the very end of the scope published within government guidance to the Bill. The idea is that an organisation can still advertise or provide sponsorship as a brand, but only if the advert does not include an identifiable unhealthy product.

We simply do not know what exactly this will mean in real terms, but we hope the legislation will provide answers to some of the questions that are raised by this distinction:

  • How does a brand distinguish itself from its products?
  • We all saw at the recent Euros the bottles of coke situated in front of the players at press conferences (made infamous by Cristiano Ronaldo). Would this type of advertising be permitted under the Bill? Would it be different if there was simply the Coca Cola logo instead of a bottle?
  • Where is the line between background brand advertising and product specific paid-for advertising?

Lessons from history, warnings for the future

There is precedent for such changes to the world of sports marketing. Gone are the days of a Ferrari Formula 1 car adorned with Marlboro branding, or Liverpool taking to the field in a Carlsberg sponsored shirt. The successful outlaw of tobacco advertisement, and the reduction of alcohol sponsorship from the frontline of club’s branding shows that drastic changes to sports sponsorship are entirely possible. Perhaps even inevitable, which could sound a warning to the UK betting industry which has become intrinsically linked with football in this country, and under increasing regulatory scrutiny.

James Tombs, the newly appointed Chief Operations Officer of the Jockeys World Championship and a senior sports industry sponsorship expert, is, however, optimistic:

“Whilst it remains unclear exactly what areas will be impacted by the Bill, and to what extent, it is something that other industries have faced in the past.  Most notably of late it was the tobacco industry and Formula One and alcohol in mainland Europe that fell foul of new regulations. Both found ways to circumnavigate through altered creative of their brand and greater engagement through rights holders and their other fan channels.

Sponsors have really changed their approach in recent years to support greater supporter engagement so sponsorship could remain a winner despite the bill provided they can continue to deliver awareness via owned channels and continued brand engagement through their fan communities.”

Furthermore, is football really that vulnerable to the changes proposed in this new Bill compared to other sports? Whilst no doubt a part of the commercial arm of football, food and beverage sponsors are a relatively small player compared to other industries. This is something noted by Antony Marcou, CEO of Sports Revolution:

“I personally don’t believe the new legislation will affect the football club sponsorship market too greatly. It’s generally quite rare for football clubs to be sponsored by food or drinks brands. The market is dominated by beer and betting. However, F&B brand sponsorship is more prevalent in more family focussed sports like athletics and cricket.

As an agency, we’ve already had first-hand experience of dealing with these sorts of restrictions as one of our clients is the London Legacy Development Corporation, which is responsible for the operation of the Olympic Park. The London Mayor’s office has already banned adverts of unhealthy foods and those restrictions apply to the advertising we’ve been selling and displaying at the Park.

Some smart creative advertising teams have found ways to work within the scope of the new rules. For example, the likes of McDonald’s and Red Bull have continued to retain a brand presence, but by advertising their low sugar products and coffee, respectively. Similarly, some of the beer brands have been advertising their low or no alcohol products.

It’ll be interesting as well to see what happens if any of the global sports events such as the Euros or World Cup are staged in the UK. As we’ve seen in other countries, Governments can carve out exceptions from local legislation to accommodate the wishes of the federations and big event sponsors, including the likes of Coca Cola and McDonald’s.

As a final point, I’d say this new legislation is actually consistent with a recent trend we’ve seen of brands and teams promoting healthier lifestyles and diets and generally looking to encourage younger audiences to participate in sport.”

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