Saracens ‘could find sponsors hard to come by’ says legal expert
PUBLISHED: 12:56 13 February 2020 | UPDATED: 12:56 13 February 2020
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Saracens will not find it easy to find sponsors following their salary cap breaches, according to a partner of London-based independent law firm Farrer & Co.
A report in the Financial Times stated Allianz will end its long-term partnership with the English and European champions early.
German insurance group Allianz, who also have the naming rights to Saracens' Hendon-based stadium, have sponsored the club since 2012 and were due to do so until 2021.
But with Mark McCall's side now preparing for life in the Championship after accepting relegation from the Gallagher Premership for repeated salary cap breaches, they are potentially facing up to it without the financial backing of their long-serving sponsor.
"I don't think it will be that easy (to find a new sponsor) and certainly not while they are in the Championship," said Julian Pike, a partner at law firm Farrer & Co with over 25 years experience advising clients in the sports sector.
"It would take a sponsor to think very long-term, recognising they have a year in the Championship and then back in the Premiership the year after and there would be a price reduction as a result of that."
Last month Saracens were handed another points deduction, with their relegation also confirmed, and back in November they were fined £5.36million after repeated salary cap breaches.
In addition to sponsoring the kit, Allianz - who are reported to pay Saracens £2million a year - also hold the naming rights to Sarries' home ground Allianz Park.
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Pike added: "If the logic is they have exercised the clause that says your conduct has brought us into disrepute and it is damaging the value of our relationship with you, then the natural conclusion is you would cease all association of your brand with Saracens.
"I don't see why if they have come to that conclusion they would keep the naming rights of the stadium, but withdraw other obligations.
"It slightly depends on what is in the contract, but if you are pulling back I would expect them to pull back completely unless there is a contractual reason why not to do so."
Saracens are not the only major sports team sponsored by Allianz, with the German insurance group being partners with Bayern Munich and Barcelona.
With ties being cut with the double winners, the question was posed about whether any other rugby clubs could join forces with Allianz.
"What you never do know at this time is if Allianz have something else lined up," Pike said.
"They could say they still want to be in rugby so can they find another partner to work with and they may have been working on that, but we wouldn't know until months down the line.
"Obviously you can't tell at this stage, but certainly part of their thinking might be do we look to stay in the sport in the UK or pull out and lick our wounds and think about how to spend this budget elsewhere moving forward."
Allianz have been approached for comment. Saracens have declined to comment.
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