Unfortunately, in recent days we have had to read the latest in a series of cases where arrests in connection with false sports sponsorships and inflated invoices have come to light. This time the focus was on Formula 1 – where in some cases, more than 50 million euros was first collected in full, then moved on to English, Chinese and Italian banks, before then being converted into cash.
From the investigations, renamed the dramatic; “operation Ghost Castle“, the names of 30 companies of the Belpaese have emerged, some of which have used over-invoicing at a rate of 80% in the five-year period, 2011-2017.
The scandal is the latest in a series of curve balls launched at the sponsorship and sports marketing sector. Only a few months ago, the operation “Hidden Accounts” lead to the arrest of 5 people in Brianza and the investigation of another 82 for the issue of false invoices and the consequent reduction of the taxable amount in the motorsport sector pertaining specifically to rally and F1.
Also involved in the investigation was SIAS, the company of the Autodromo di Monza, who allegedly issued non-existent invoices for figures of over one million euros.
Let’s move to a place of clarity on this, and fast: false sports sponsorships, 1 to 3 invoices, inflated bills for the purpose of deductibility and horrendous cases of dodgy tax benefit schemes are the cancer of our trade and as is usually the case, the methods adopted by a deplorable few have put a passionate and hardworking industry in question.
In light of these recent scandals detailing unscrupulous methods and unsavoury under goings – serious operators and straight down the line agencies are being left to protect the integrity of their craft and uphold the reputation of their businesses.
Another travesty left in the wake of these revelations has been the overwhelming value of sports sponsorship as an instrument for brands and companies may now be seen as discredited. The reality remains that sports sponsorship continues to communicate with spanning reach across a multitude of target demographics with exceptional yield in results when considering sales and positioning.
If you want to know more about sponsorship read What is a Sponsorship Activation.
Let’s keep the market safe
If we want to save the sector – not just sponsorships, but sports – there needs to be a decisive and definitive change in culture and practice. A hard and fast rule, mandatory in the case of those who act out of accordance with the law and reasonable ethics.
A culture of work, results and strategies. The culture shift needs to be one from the ground up, from the grassroot levels of the youth sectors.
The United States for example is a country that is not perfect, but banks, insurance companies, financial firms and entrepreneurs have understood that it is necessary to be alongside consumers “in the making”, and to be present during the journey if you want to be chosen when needed. This is why most school gyms, high school campuses and university campuses are well funded and that is why sports programs and facilities are supported at this level.
Finally, it is necessary to start looking at professionals, be they sports, marketing or management pros. It is necessary to look at sports with a corporate spirit, as a flourishing and constantly growing sector that has a lot to offer both to companies and people, even in terms of economic returns.