Commercial partnerships are an important source of revenue for football clubs and other sports rights-holders. As clubs continue to build global fanbases, sponsorship arrangements with financial services businesses, including cryptoasset businesses and online trading platforms, have become increasingly visible across shirts, training wear, digital content and fan activations.

The Financial Conduct Authority (“FCA”) has now written to football clubs, mainly in the Premier League, setting out concerns about sponsorship arrangements with firms operating cryptocurrency exchanges or trading platforms without FCA authorisation[1]. The FCA’s message is not that all financial services or crypto-related sponsorships are problematic. Rather, clubs should take care where a sponsor may be operating outside the UK regulatory perimeter, particularly where the sponsorship could help that firm reach UK consumers.

The warning is a reminder that sponsorship is not only a commercial rights issue. Where a sponsor operates in a regulated sector, clubs and rights-holders should consider the sponsor's regulatory status and their own role in promoting, facilitating or benefiting from the relationship. Liability or regulatory exposure is unlikely to arise simply because a club deals with an unauthorised firm but may arise where club communications amount to unlawful financial promotions, the arrangement helps target UK consumers, or sponsorship proceeds raise financial crime concerns.

Why is the FCA concerned?

In its letter, the FCA says it has seen an increase in football club partnerships with unauthorised firms, some of which appear to be operating unlawfully. The FCA is concerned that sponsorship arrangements can give those firms legitimacy and provide them with a platform to promote their services to UK consumers.

The FCA identifies two main legal risks. First, an unauthorised firm may be carrying on regulated activities in the UK without authorisation, in breach of the general prohibition under section 19 of the Financial Services and Markets Act 2000 (“FSMA”). Secondly, the firm may be communicating unauthorised financial promotions in breach of section 21 FSMA. The FCA notes that both activities are criminal offences.

For clubs, the important point is that the FCA is not only focusing on the sponsor’s conduct. The letter also asks clubs to consider whether the club’s brand, platform and communications may assist the sponsor in reaching fans.

Financial promotions: the legal context

Since 8 October 2023, certain cryptoasset promotions aimed at UK consumers have been within the UK financial promotions regime[2]. Broadly, cryptoasset promotions may only be communicated to UK consumers where they are made or approved through an appropriate regulatory route, or where an exemption applies.

This matters because sponsor-related content is not automatically outside the regime because it forms part of a sponsorship campaign. A club website post, app notification, social media post, video, competition, player-led activation or matchday promotion could all be relevant if it promotes the sponsor’s financial products or services.

What are the actual risks for clubs?

For clubs, the main exposure falls into three areas.

First, a club may create its own financial promotion risk through the content it publishes. Passive branding, such as a logo on a shirt or perimeter board, carries lower risk than content encouraging fans to open an account, download an app, trade cryptoassets or claim a bonus. The stronger the call to action, the greater the risk. Where content crosses that line, it may amount to a financial promotion and, if not communicated through a lawful route, could expose the club to criminal liability under FSMA. Even short of formal prosecution, the club may face FCA scrutiny and pressure to amend or remove the content.

Secondly, a club that enters into, or continues, a relationship despite clear regulatory red flags may face regulatory scrutiny, operational disruption and reputational damage, particularly if fans suffer losses after engaging with the sponsor. In more serious cases, there is potential risk that affected fans may go further and seek to bring claims against the club on the basis that they relied on its endorsement.

Thirdly, there may be financial crime risk. The FCA has expressly raised the possibility that sponsorship payments derived from unauthorised regulated activity or unlawful financial promotions may constitute criminal property under the Proceeds of Crime Act 2002. This does not mean every payment from a financial services sponsor presents a financial crime issue. The position will depend on the facts, including the sponsor's activities, the source of funds and the knowledge or suspicion of those involved.

The practical answer is not to avoid all financial services or crypto-related sponsors, but to manage the legal risk properly by carrying out regulatory due diligence before signing, controlling UK-facing activations and securing contractual rights to pause, amend or terminate the arrangement if regulatory concerns arise.

Due diligence on sponsors

The FCA expects clubs to carry out appropriate due diligence before entering into sponsorship arrangements involving financial services firms, and to continue monitoring during the sponsorship term.

In practice, clubs should consider:

• checking whether the sponsor is FCA-authorised, registered or exempt;
• understanding the products or services being promoted, and whether they may involve regulated activities under UK law;
• reviewing controls intended to prevent UK consumer access, such as geo-blocking, disclaimers and onboarding checks;
• checking the FCA Firm Checker and Warning List;
• obtaining specialist legal advice where needed;
• monitoring the sponsor’s regulatory position throughout the agreement; and
• ensuring that source-of-funds checks form part of due diligence, particularly where the sponsor is an overseas financial services business, cryptoasset business or trading platform.

Where a firm appears on the FCA Warning List, the FCA says clubs should conduct enhanced due diligence and give serious consideration to whether entering into, or continuing, the arrangement is appropriate.

Practical steps for clubs and rights-holders

The FCA’s warning is part of a wider trend of regulators looking more closely at sports sponsorships where fans or consumers could be at risk. This is already happening in gambling, where there has been increased scrutiny of sponsorship by operators that are not licensed in Great Britain. Premier League clubs have also agreed to remove gambling sponsors from the front of matchday shirts from the end of the 2025/26 season[3].

Sports sponsorship can give regulated businesses credibility and visibility with large fanbases. For clubs and rights-holders, this means due diligence should therefore be tailored to the type of sponsor and risk profile. A financial services, gambling or cryptoasset sponsor is likely to require more careful legal and regulatory checks than a lower-risk consumer brand.

Clubs and rights-holders should consider:

• building regulatory due diligence into the sponsorship approval process;
• including warranties, undertakings, information rights and termination rights linked to regulatory compliance;
• agreeing controls over sponsor activations and UK-facing marketing;
• requiring pre-approval of sponsor activations, particularly where club channels, players, competitions, links, QR codes or app downloads are involved;
• ensuring marketing teams understand when sponsor content may raise financial promotion issues; and
• reviewing the sponsor’s regulatory status and consumer-facing activity during the life of the deal.