Saturday 28 February 2009

Don't trust Sports Sponsors.

Commentators in the financial press often remark that lavish company headquarters are a sign of a badly run company. Recent events suggest that another warning sign is lavish sponsorship of sporting events. Northern Rock, the Royal Bank of Scotland, and Sir Allen Stanford all spent a great deal of what now appears to be other people's money on sporting events.

People often blame financial catastrophes on greed. I don't rule that out, but I think megalomania is often more important. Men, and the culprits always seem to be men, want to their company to be BIG and want themselves to be noticed. Sponsoring a well reported sporting event or a successful team is a way of boasting about their size.

Investors should treat it as a warning.

2 comments :

Ged said...

In this context it may be relevant that Warren Buffet lives in a famously modest family home.

Richard said...

I wish I'd spotted Warren Buffet about 30 years ago before he became well known !