Australia-based Forex broker, IC Markets is suing Italian soccer giant, Inter Milan for cancelling their lucrative sponsorship deal. Why was the contract cancelled?
As AtoZ Markets reported in July this year, Inter reached an agreement with IC Markets for them to become the club’s first-ever shirt sleeve sponsor for €10 million ($11.3 million).
Why Inter Milan cancelled IC Markets sponsorship deal?
Italian Serie A football club Inter Milan have announced that they have cancelled the contract due to IC Markets failure to comply with contractual obligations and will be retaining the €2.5 million that IC Markets already paid to them.
The Nerazzurri club has also confirmed to AtoZ Markets that IC Markets have filed a wrongful termination lawsuit against them and are seeking reimbursement of the money they have already given to the club, plus interest. The first hearing of this case will be held before the court of Milan on April 14, 2021. Conclusively, the club said that they have set aside €2 million in their audited financial statements for this matter.
Is sports sponsorship worth it?
Sports sponsorship has long been a way for businesses to extend their global reach. In fact, there is a direct correlation between the target markets of sports organizations and clubs, and FX and CFD brokers. The ROI achieved from such partnerships appears to induce a lucrative ROI for global brokers.
In the past, we have seen clubs like FC Barcelona sponsored by Forex brokers. While it does give the broker good coverage, and exposure, we have seen that this type of deals are counter-productive. Although it is subject to discussion, the ROI as a result of sport sponsorship deals are often negative. However, smaller-scale sporting events have proven to generate better results for various brokers.
AFX group sponsored a sailing team in the past, however, the company entered a voluntary administration. IronFX sponsored Barcelona, after which the company had financial troubles. USGFX sponsored Sheffield United, however, just recently, we announced USGFX bankruptcy.
Moreover, ACFX sponsored the Serbia Open tennis tournament and the company later went bankrupt. In conclusion, we will have to watch and see the outcome of the legal battle between IC Markets Inter Milan.
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