London’s The Independent has an interesting idea today, namely that corporate sponsors are taking out insurance policies to protect themselves against sponsorship deal going sour.
Big brands associate with sports champions for obvious reasons but all too often the brands link up with an idealised vision of of the champion, an almost mythical status. Whereas the actual individual or team involved is prone to the usual human mistakes.
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So when Tiger Woods goes on the rampage or a cycling team collapses in disgrace, the corporate backer can get a pay out from the insurer to compensate them.
A spokesman for Lloyds said the cost of the policy depends on the worth of the deal and the image of the celebrity. Premiums generally vary between half and one per cent of the sum insured, up to £10,000 per £1m. “If someone is squeaky clean and seems unlikely to cause a scandal – such as [tennis player] Roger Federer, then the premium would be quite low,” he said.
Given the statistical evidence, I suggest the rate could be higher for backing a pro cyclist although I suspect the likes of Astana don’t subscribe to these policies. I wonder if RadioShack have insurance against the prospect of Lance Armstrong getting sucked into the vortex?
More interesting for me is the idea of this insurance. Because for me we can insurance against some freak events but a sportsman going on the slide is something that can be worked at. For example Garmin’s involvement in cycling seems to be a good two-way process, with the sponsor funding extra anti-doping controls and taking the whole team towards an ideal of cleaner sport. In other words a company that takes out insurance might be prudent but it also means they view the investment as neutral, that in the event of something going wrong they can walk away with a tidy insurance payout.