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Zoopla sponsorship dispute with West Bromwich Albion: What options are available to clubs and sponsors?

Thu 23rd Jan 2014 | Football Sponsorship

Property website Zoopla has announced that it is to end its sponsorship of West Bromwich Albion FC at the end of the current season.  The announcement is the culmination of an on-going dispute between club and sponsor concerning the goal celebrations of Nicolas Anelka.

Anelka is alleged to have made a "quenelle" gesture (claimed to be a “Nazi salute in reverse”) following a goal against West Ham united in December last year.  Since then Zoopla has been putting increasing pressure on the club to drop Anelka from the squad. However, West Bromich management maintained that, until the Football Association released the result of its ongoing investigation into Anelka's celebration, the player will be remain available for selection. 

Zoopla’s announcement on the 20th January came on the eve of the FA’s decision to ban Anelka for a minimum of 5 matches.

The dispute highlights both the way in which tensions can arise between a club and its sponsor's competing interests and the need for contracting parties to have clear remedies available to them in the event the relationship sours.

What options are available to clubs and sponsors?

There is little subtlety to the dispute in this instance and it has, unfortunately for all involved, ended with a complete breakdown in the relationship.  Termination of an agreement is usually seen as the last resort.

Although West Bromwich are yet to respond to Zoopla's announcement that the sponsorship is to be terminated, at this time there is no indication that Zoopla is not entitled to terminate.  This suggests that the contract between the parties contains a clause allowing Zoopla to terminate on notice (possibly without any need for the sponsor to point to the offending behaviour of club or player). 

Inclusion of a termination clause is standard in nearly all contracts, although parties will typically look to limit the circumstances in which the counterpart can terminate, thus bringing some certainty to the arrangement.

Short of having to rely on termination provisions, clubs and sponsors can look to include other clauses in their agreements in an attempt to protect their interests. 

Such clauses are often referred to as “disrepute” or “morality” clauses.  Both operate, as the names suggest, on the occurrence of a trigger event which brings the club and / or sponsor into disrepute, or if a specified party’s behaviour falls below expected levels of morality.

Ideally the trigger events should be specified as clearly as possible in order that there is no ambiguity as to the clause’s applicability. In addition, the clause will need to specify the rights of the injured party (ie. the party seeking to rely on the clause).  Such rights could be the temporary suspension of the agreement, the imposition of financial sanctions to compensate the injured party for the losses they suffer as a result of the disrepute, or the right to terminate the agreement on short notice.

In the case at hand, Zoopla's inability to prevent the club from selecting Anelka is informative. It demonstrates that Zoopla had no contractual right to insist on the player's suspension (particularly where the FA had not yet imposed a sanction).  Such a right would in any event be unusual in a sponsorship agreement between a club and commercial partner where there is no direct relationship between Anelka and Zoopla.  The lack of such a clause explains why Zoopla first tried to exert commercial pressure on the club (ie. drop Anelka, or we’ll terminate our sponsorship) in an attempt to disassociate itself from Anelka.

These are just a two examples of the types of clause that clubs and sponsors can include to protect themselves (and provide remedies) when instances such as this arise.

Given the release of the FA’s statement on the matter and its decision to ban Anelka, Zoopla may with hindsight feel that its decision to terminate was a little hasty.  Similarly, given that the player has now been banned and it is now without a sponsor for next season, West Bromwich Albion may feel that it could have done more to remedy the situation short of pushing Zoopla to terminate.  In either case, the dispute highlights the need for clubs, sponsors and players to pay particular attention to their commercial agreements.

Thomas Barnard, sports specialist solicitor, Thomas Eggar LLP

Picture: Action Images / Paul Childs Livepic

Posted by: Kev Howland

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