All Blacks’ strange sponsor

December 30, 2012
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The signing of AIG to be jersey sponsor was a coup, but many fans don’t like it.

Tony Smith, Stuff.co.nz

Remember the line in an old Kentucky coalminer’s song: “I owe my soul to the company store”?

Steve Tew and his New Zealand Rugby Union hirelings should have been humming it when they announced AIG – an insurance giant that received the biggest government bailout in American history – was the new jersey sponsor of the All Blacks.
This was hailed as a major corporate coup by the NZRU. But it’s the final straw for longtime All Black fans of my acquaintance.

The NZRU may have a convenient case of corporate amnesia, but a lot of New Zealanders remember AIG as one of the biggest basket cases of the 2008 financial system implosion.

The American government bailed out AIG to the tune of $US182 billion – about $60 billion more than New Zealand’s annual GDP.

It wasn’t the Government paying for the insurer’s excesses – the cash came from the pockets of American working people.

No wonder the Congressional Oversight Panel (COP) stated the AIG “rescue” demonstrated that the Treasury and the Federal Reserve would commit taxpayers to pay any price and bear any burden to prevent the collapse of the America’s legal institution.

The panel said the deal had had “poisonous effects” on the financial marketplace and public opinion. Fair COP?

Yet within a week of the bailout, AIG spent $US444,000 on a retreat in California where staffers enjoyed lavish banquets, golf games and spas. A further $US86,000 was squandered on a hunting trip to England for company executives.

Still, AIG kept going cap in hand to Capitol Hill for more cash. It reported a record fourth-quarter loss of $61 billion in March 2009 – yet the very same month paid bonuses totalling $165 million to its executives.

Here’s what United States President Barack Obama had to say about that: “It’s hard to understand how derivative traders at AIG warranted any bonuses, much less than $165 million in extra pay.”

Is this really the type of company the NZRU should leap into bed with?

Why would it allow a foreign corporate with a chequered record to splash its livery on the jersey of a team synonymous with a century of excellence?

Why should AIG rehabilitate its reputation through riding on the coat-tails of one of world sport’s most successful teams?

How much is the NZRU getting from AIG? It won’t say, although it’s clearly more than 30 pieces of silver.

It won’t be as much as the $US56.5m AIG paid to feature on Manchester United’s shirtfronts between 2006 and 2010 at the height of its financial crisis.

But the AIG deal is reportedly the NZRU’s second biggest sponsorship behind adidas. The rugby body rakes in about $80m in sponsorship each year, so do your own sums.

I’d like to think there was at least one lone voice around the NZRU board table questioning whether it should do a deal with a company of AIG’s ilk.

But should we really expect anything other than self-interest from the NZRU?

The All Blacks may be the exemplars of courage on the field, but their governing body hasn’t historically always displayed moral backbone.

This is, after all, an outfit that capitulated to demands from South Africa’s racist regime not to include Maori players in the 1949 and 1960 touring teams.

It sat back and allowed proud Pasifika and Maori men like Bryan Williams and Sid Going to tour South Africa in 1970 as “honorary whites”.

The All Blacks toured South Africa in 1976 in contravention of the Gleneagles Agreement among Commonwealth nations opposed to sporting contact which provided succour to the apartheid regime.

The upshot was African nations pulled out of the 1976 Montreal Olympic Games in protest.

The NZRU and prime minister Rob Muldoon allowed the 1981 Springboks to tour here, knowing civil unrest would ensue in a nation deeply divided over sporting contact with South Africa.

Not long after rugby went professional, the NZRU abandoned its 75-year partnership with a New Zealand-owned apparel company, Canterbury International, for a deal with global giant adidas, which boosted its coffers by 60 per cent.

Shrewd business? Perhaps.

But it spurned a company that produced jerseys made by New Zealand workers on New Zealand pay rates for those made for a German firm at factories in Asia, where apparel industry staff have been paid sweatshop wages.

I know a lot of people who say to the idealists among us “you can’t eat your principles”.

But the All Blacks’ jersey is taonga. Before sullying it with a sponsor’s logo, you’d like to think due diligence would be done on more than just the bottom line on the balance sheet.

That proudest and most humble of All Blacks, Keven Mealamu, revealed while modelling the new AIG-inscribed uniform the All Blacks first wore against Australia at the weekend, that the senior players had insisted on a smaller logo so it didn’t dominate the jersey.

If that decision was left to the marketers would every square centimetre, apart from the silver fern, carry a corporate’s imprimatur?

I was one of those who naively believed professional rugby would lead to players who threw their bodies into rucks week after week out being fairly compensated for their labours and that the sport would become self-supporting.

There has been a trickle-down, not a torrent, to the game’s grassroots yet the amateur arm is still dependent on gaming trust grants – hence Steve Tew’s recent opposition to a Maori Party MP’s Te Ururoa Flavell’s private member’s bill aimed at eradicating pokie machines.

Do you ever wonder whether professionalism has been a boon for sport?

Has anyone really benefited beyond players, coaches and executives?

Many professional sports franchises around the globe are giant loss-making enterprises which would be heading for a date with the Official Assignee’s office if normal business principles were applied.

They are propped up artificially by television network money or the largesse of owners seeking vanity projects or tax write-offs. You have to head down to the lower leagues to find the real “professional” clubs – those living within their means.

Fortunately, sport does still have a soul. But you’ll find it in the dressing sheds, not the boardroom.

OTHER NEWS

The New Zealand Rugby Union today announced an improved bottom line result for the 2011 financial year of $9.6m, boosted by a successful World Cup.
This was a turnaround from the 2010 loss of $9.4m.
“We are satisfied with our overall financial performance in the face of economic conditions which continue to be the most challenging our organisation has faced for many years,” said NZRU Chairman Mike Eagle.

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5 Comments

  1. avatar Timeo says:
    December 30th, 2012 at 11:45 pm

    The only thing in the article that I do not agree with is the part about the $180B coming from US tax payers.

    The bailouts were funded with borrowed money. They thus committed future tax monies, but they did sell the last of their AIG shares recently and made a net profit of about $22B on the original investment.

    Either way, AIG still has a bad name over here. The NZRU really sullied the All Black jersey with this one.

  2. avatar Morné says:
    December 31st, 2012 at 8:05 am

    I am not that interested in who they have on their shirts, the interesting thing for me was if professionalism really benefits any sport?

  3. avatar DavidS says:
    December 31st, 2012 at 9:21 am

    Reply to Timeo @ 11:45 pm:

    Has Manchester United thrown them yet?

  4. avatar DavidS says:
    December 31st, 2012 at 9:23 am

    The Barcelona thing of getting a UNESCO sponsorship is apparently the way of the future for advertizing in sports.

    People with a social conscience will now buy a Barcelona shirt because doing so supports international good… which is exactly what people with a view to doing good and liking sports will like.

    If 46664 was big enough that would be a brilliant way for the Springboks to gain more supporters… that or something like UNHCR or Nkosis Haven or Cotlands or something like that.

  5. avatar Timeo says:
    January 8th, 2013 at 6:11 pm

    Now it seems AIG want to sue the Federal Government for forcing them into an unfair bailout.

    http://www.cnbc.com/id/100361095

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