John Fitzsimons can’t see how Northern Rock can possibly justify dishing out £10m on sponsoring Newcastle United.
Hi, I'm John Fitzsimons from lovemoney.com, and today I'd like to ask whether the people running Northern Rock have completely lost their minds?
You remember Northern Rock, that lovely former building society which messed up its business model, leading to the first run on a bank in over 100 years, and pictures everywhere of pensioners queuing round the block to take out their life savings. The Northern Rock that was only saved from going bust by me and you?
Well, that very same Northern Rock has done something unutterably stupid. Again.
Last week it was announced that Northern Rock had renewed its contract to sponsor the football side Newcastle United.
Call me crackers, but I thought Northern Rock's priority was paying back the enormous sums it still owes to the public purse, not chucking money away in a sports sponsorship deal.
And it's not like the deal is cheap either. It comes into force at the beginning of the 2010/11 season, by which time Newcastle will in all likelihood be back in the Premier League. Should the club stay there for the full four years of the contract, the deal will be worth a whopping £10m.
This is an absolutely disgusting waste. Northern Rock has defended itself saying that 'brand awareness' is an important factor in the bank's plans. Believe me, it will take many of us an awful long time to forget the brand Northern Rock - we don't need any helpful reminders the next time a Newcastle game is featured on the box.
I had no problem with the Government bailing out Northern Rock - it was the right thing to do in the circumstances, just as it was right to take a controlling stake in the Royal Bank of Scotland.
But once those banks are owned or at least run by the Treasury, its main aim has to be paying back its debts and moving out of public ownership. And I just don't see how sponsoring a football club - particularly one with such a long history of underachievement - will help it to do that any quicker. That money would be far better spent providing some more competitive products!
That's it for me for today, thanks for watching lovemoney.com.