Insurance brand Allianz is poised to end its Principal Partner deal with English rugby club Saracens one year early because of the salary cap scandal engulfing the club.
The current four-year contract between Allianz and Saracens was set to expire at the end of 2021 but should now be terminated at the end of the 2020 season, according to the UK’s Financial Times newspaper.
The £2m (€2.4m/$2.6m)-per-season deal includes the club’s main shirt sponsor rights and naming rights to the Allianz Park stadium in north London.
The decision to quit was reportedly made last week after talks between the two parties. While the club is still making last-ditch efforts to retain Allianz, it has already begun the search for a new main sponsor, the report said.
Saracens had initially been fined £5.4m and given a 35-point point deduction in November for having broken the cap for the past three seasons
In January, Premiership Rugby ruled that the club should be relegated at the end of this season after further dialogue with the club over the detail of its failure to comply with salary cap rules.
Allianz said in November that the company acts “with transparency and integrity” and would hold talks with Saracens “to confirm this shared understanding and commitment going forward.”
But the eventual breach was inevitable, according to sports industry expert Tim Crow, founder and chief executive of the sports consultancy Crow Business Services, and adviser to motorsports’ fledgling W Series.
Crow told SportBusiness this morning: “For a long time it has been a question of ‘when’ not ‘if’ Allianz would terminate the Saracens sponsorship. Obviously, the highly-visible brand association has become toxic, but it goes deeper than that.
“In its first and, so far, only public comment on the issue Allianz highlighted that its decision on Saracens would be through the lens of its focus on acting with transparency and integrity. When the Saracens case unravelled, that criterion left them with no choice but to push the button.”
Focus will now switch to other Saracens sponsors, including Nike, the club’s kit supplier in a three-year deal from 2018-19 to 2020-21, which has yet to take a public stance on the situation.