Virgin Australia announced on Tuesday they were entering voluntary administration as a result of the COVID-19 (Coronavirus) global pandemic, putting the airlines major partnership deals at risk.
Virgin has very lucrative major sponsorship deals with the AFL and Supercars, along with a host of AFL clubs including Carlton, Greater Western Sydney, and Gold Coast.
With Virgin entering voluntary administration, all sponsorship agreements are now under the microscope with the extent of the financial damage set to be determined by administrators and contractual obligations.
Depending on the findings of administrators, the AFL could miss out on a reported $5-10 million per year and Supercars could miss out on a reported $1.5 million this year as they were in the final year of their naming rights sponsorship with the airline.
Virgin Australia CEO, Paul Scurrah, said the organisation’s sport sponsorships will be a large focus of the administration.
“We’ll work through every one of those contracts as part of administration,” Scurrah said.
“The AFL is a very important partner of ours and it’s important that we have those partners on the other side.
“I know that we have a lot of sponsorships as well in other sports and we’ll be looking at all of those as we go forward through the administration,” he said.
AFL general manager of commercial, Kylie Rogers, said the partnership between the AFL and Virgin has spanned a decade with Virgin as its official airline, and the AFL is prepared to support their long-term partner.
“We will continue to work and support them through this challenging and unprecedented time,” Rogers said.
“The team at Virgin Australia have taken our clubs, players, officials and fans to all parts of the world, and we can’t thank them enough for their continued dedication to our game.
“Virgin Australia’s commitment to footy and directly to a number of our clubs has been valued from day one.
“They are an integral part of the footy family with life-long relationships built across the board.
“We want to ensure that Paul and all his team at Virgin Australia know they have our support and our thoughts are with the whole team and their families as the company works through the current situation,” she said.
AFL club Carlton could stand to lose up to $2 million a year with Virgin going into voluntary administration, with CEO, Cain Liddle, saying the airline will always have the unwavering support of the club.
“Our partnership has been one of enormous mutual benefit,” Liddle said.
“In 2019 alone, our Carlton In Business network delivered more than $5 million worth of business to Virgin Australia.
“Like our club, Virgin Australia will likely look quite different post COVID-19, but whilst they continue to fly Australian skies, they will always have the unequivocal support of our club.
“This is an incredibly difficult time for all Virgin Australia staff and their families, and the thoughts and best wishes of the entire Carlton family are with them,” he said.