ROYAL Bank of Scotland (RBS), bailed out with billions of pounds of taxpayers’ money, hired top sports stars on “reckless” contracts to entertain clients as part of a £200m sponsorship binge.
Sir Fred Goodwin, the bank’s former chief executive, agreed contracts of up to five years just weeks before he was ousted last October.
Stars signed as “global ambassadors” include Zara Phillips, the rider and granddaughter of the Queen, Jack Nicklaus, the golfer, and Sir Jackie Stewart, the former motor racing champion. Stewart, who is said to have earned £4m to promote RBS said last week: “I am very much still with RBS. My contract has nearly two years to run and they always honour contracts.”
Sachin Tendulkar, the Indian cricket hero, signed a five-year deal just weeks before Goodwin was ousted.
RBS, which announced a £28 billion loss last month, the biggest in British commercial history, said it was obliged to honour deals agreed under Goodwin. The revelation, which follows a row over RBS’s plan to defy public opinion by paying almost £1 billion in bonuses, has angered MPs. John Mann MP, a member of the Treasury select committee, said: “They have been reckless yet again. This doesn’t seem to be a bank that could do anything in moderation. It now needs to realise the golden days are over.” The RBS group now ranks as one of the world’s biggest sports sponsors, with events including the US and British Opens in golf, the Six Nations rugby tournament, the Nat-West series in cricket and Formula One where it sponsors the Williams race team. Its website describes its calendar of events as the RBS World of Sport.
Last year the bank invited 400 guests to the Singapore Grand Prix, where Stewart hosted a cocktail party at the former supreme court building.
Both Stewart and Nicklaus were boyhood heroes of Goodwin, the son of a Paisley electrician.
The banker, who earned £4.2m a year as head of RBS and walked away with an £8.4m pension pot, refused to comment. In 2005, his bank, which is now 68% owned by the taxpayer, printed 2m Scottish £5 notes featuring Nicklaus’s face to celebrate his appearance at St Andrews in the Open Championship, the last major tournament of his career.
Peter Phillips, Zara’s brother, was recruited to run the bank’s £20m sponsorship of the Williams F1 team, which was brokered by Stewart. Phillips is now based in Asia and oversees the team at each Asian grand prix.
A spokeswoman for Zara Phillips, who signed a three-year deal as a sport ambassador for the bank in 2007, said: “RBS has made no move to renegotiate the contract.” A spokesman for the bank said: “All our sponsorship agreements were negotiated on commercial principles and meet strict corporate governance rules.” The bank said it now wanted to “strike the right balance” between obtaining the benefits from sponsorship and trying to reduce costs.
However, one insider said: “We wish we could undo some of these deals but we are signed into contracts.”
Source:the times
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