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Wonga row rumbles on


The row over Newcastle United's sponsorship by payday loan company Wonga rumbles on, although at the end of the day the deal is likely to stay in place.  

The Magpies may have suffered some reputational damage, although that is nothing new for them off the pitch under the present regime, but Wonga have got loads of free publicity.   If no one had heard of them before, they certainly have now, although the downside may be increased scrutiny of their business.

Ryan McKnight, until very recently the editor of FC Business, appeared on BBC News last night and, as one might expect, he offered a robust defence of Newcastle's position.   He pointed out that what Wonga does is lawful and that no club could be 100 per cent moral.   His most interesting point was that, with the arrival of financial fair play, clubs need to maximise income from sponsorship.

He was on slightly shakier ground when he said one couldn't avoid offending minority groups and that Sharia law did not apply in the UK.   That is true, of course, but as the interviewer pointed out, the values it represents might still be important to Muslim players.    Islam's moral and religious code instructs its followers not to lend money for profit, the principle of charging interest going against its beliefs.   My understanding of how Islamic banks operate in the UK is that they do have a functional equivalent of interest as I looked into loaning money to one but was put off by the complicated form and intrusive questions.

As it happens, none of this really matters as it seems unlikely that there will be any refusal to wear the shirt or other protest by the club's four Muslim players (Demba Ba, Paipiss Demba Cissé, Hatem Ben Arfa and Cheik Toté).

R3, the insolvency industry trade body, noted Wonga had chosen to target a region with the country's highest personal insolvency rate, at 35.2 per 10,000 adults, more than double that in London.  Nick Forbes, the leader of the Labour-controlled city council, said he was 'sickened and appalled' by the sponsorship deal.  He wrote to Newcastle owner Mike Ashley, urging that some sponsorship money be donated to fund additional debt advice locally.

I first became aware of payday loans when I was working in the United States in the late 1990s, but one of the oddities of arrangements there was that most people were paid once a fortnight.