SBC News Spanish monopolies ordered to cut sports sponsorship budgets 

Spanish monopolies ordered to cut sports sponsorship budgets 

The Spanish government has ordered state-owned companies to comply with a 2022 Budget Law order that will demand incumbents to drastically reduce their sports marketing and sponsorship budgets. 

Enterprises such as SELAE, Spain’s state-run lotteries society and monopoly counterparts RENFE (rail networks) and Correos (the post office) can no longer spend more than 2% of their accumulated net profits on sports-related partnerships.

The measure was adopted by Spain’s coalition government, that seeks to tighten control of the day-to-day running of businesses in order to return the state’s portfolio of companies back to profitability. 

As a result, Spanish monopolies have been instructed to submit all existing or planned sports sponsorship/marketing agreements to the Ministry of Finance for government approval – in which incumbents have been warned that those ‘in the red’ would see their ad-spend budgets cut.

The Budget Law order has been criticised by Spanish media firms, which last summer had to comply with the government’s Royal Decree on Advertising – a federal command which placed a near blanket ban on all forms of gambling advertising (digital and land-based).

CEMDE – The Spanish Sports Marketing Committee – lambasted the government’s decision to place further commercial restrictions on sports events that are returning back to a normal status in the aftermath of the COVID-19 pandemic.   

“Events, competitions run by Spanish Federations such as La Vuelta (Cycline), Spanish Basketball or Royal Handball League may be left without their main sponsors,” – CEMDE warned the government.

The applied restrictions are unlikely to have an impact on SELAE, as the profit-making lottery operator has recently renewed and expanded its principal sponsorship of Spain’s Olympic and Paralympic teams.

During 2020’s COVID-19 pandemic, SELAE reduced its sports sponsorship budget by 10% to €4.9 million.  The budget was allocated for direct contributions to Spanish Federations that had postponed their headline events.

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