Controversy as Newcastle bet shirts on Wonga

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English Premier League side Newcastle United on Tuesday unveiled a sponsorship deal with loans company wonga.com, sparking criticism and concern because of the firm’s reputation for sky-high interest rates. Wonga will sponsor the club’s shirts from the start of next season and will also invest 1.5 million pounds (1.85 million euros, 2.5 million dollars) in the club’s academy and a social scheme helping to equip local youngsters with workplace skills.
The Magpies, currently sponsored by Virgin Money, added the deal, whose overall value was not been revealed but which British media suggested was around 24 million pounds, will include a fans’ forum to foster closer links with the club hierarchy. Newcastle managing director Derek Llambias said in a statement: “We are building a club that can regularly compete for top honors at the highest level.
“Throughout our discussions Wonga’s desire to help us invest in our young playing talent, the local community and new fan initiatives really impressed us and stood them apart from other candidates.”
But local politicians and R3, a trade body for insolvency professionals, questioned the appropriateness of the choice as the northeast of England, of which Newcastle is the main city, has the highest rate of insolvency in Britain.
Wonga offers short-term business loans for an annual percentage rate of up to 360 percent while its “representative” annual rate for payday loan for struggling households is more than 4,000 percent.