Sport Sponsorship crisis: Virgin administration set to further disrupt sport

Sponsorship crisis: Virgin administration set to further disrupt sport

Holden driver Jamie Whincup after winning the opening race of the 2020 Supercars season. Photo: AAP
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Major sports in Australia are facing the possibility of multimillion-dollar revenue hits after Virgin Australia entered voluntary administration.

Virgin holds a lucrative sponsorship deal with the AFL, reportedly worth between $5 million and $10 million per year.

The airline is also in partnership with AFL clubs Carlton, Greater Western Sydney and Gold Coast.

Meanwhile, Virgin has been the naming rights sponsor of the Supercars championship since 2016.

The five-year deal with the motorsport category is set to finish at the end of 2020 and is reportedly worth $1.5 million a year, including discounted ticket rates and access to Virgin’s private VIP facility known as ‘The Club’ for senior management, team owners and all previous champions.

However, all the sponsorship agreements are now under the microscope with the extent of the financial damage to be determined by administrators and contractual obligations.

“We’ll work through every one of those contracts as part of administration,” Virgin CEO Paul Scurrah said on Tuesday.

“The AFL is a very important partner of ours and it’s important that we have those partners on the other side.

I know that we have a lot of sponsorships as well in other sports and we’ll be looking at all of those as we go forward through the administration.’’

The AFL has had Virgin as its official airline for a decade and on Tuesday pledged its support to the long-term partner.

“We will continue to work and support them through this challenging and unprecedented time,” AFL general manager of commercial Kylie Rogers said.

“The team at Virgin Australia have taken our clubs, players, officials and fans to all parts of the world, and we can’t thank them enough for their continued dedication to our game.

“Virgin Australia’s commitment to footy and directly to a number of our clubs has been valued from day one.

“They are an integral part of the footy family with life-long relationships built across the board.

“We want to ensure that Paul and all his team at Virgin Australia know they have our support and our thoughts are with the whole team and their families as the company works through the current situation.”

Carlton, GWS and Gold Coast all issued statements on Tuesday saying they would stand by the embattled airline.

The Blues could reportedly lose up to $2 million a year in Virgin sponsorship.

“Our partnership has been one of enormous mutual benefit,” Carlton CEO Cain Liddle said.

“In 2019 alone, our Carlton In Business network delivered more than $5 million worth of business to Virgin Australia.

“Like our club, Virgin Australia will likely look quite different post COVID-19, but whilst they continue to fly Australian skies, they will always have the unequivocal support of our club.

“This is an incredibly difficult time for all Virgin Australia staff and their families, and the thoughts and best wishes of the entire Carlton family are with them.”

-AAP