BUSINESS

Will scandal-wary advertisers shun Covers.com like they do News of the World?

TAGs: betEd, Blue Monday, Covers.com, Joe MacDonald, news of the world, Paul Lavers, phone hacking, William Hill

Revelations that UK tabloid News Of The World hacked into voicemail accounts belonging to murdered schoolgirl Milly Dowler, plus relatives of victims of London’s 7/7 terrorist attacks and of British soldiers killed in Afghanistan continue to astound and revile the UK public. The furor has led to a growing list of companies cancelling their advertising relationships with NOTW, including Vauxhall, Ford, Lloyds banking/Halifax, Mitsubishi and Virgin Holidays. Others, like bookmaker William Hill, are said to be “reviewing any commercial arrangements.”

Speaking to TheDrum.co.uk, Jenny Biggam of media buying outfit the7stars wondered about the long-term damage the scandal could have on NOTW’s bottom line, and how much of their taint might spread beyond the NOTW offices. Biggam believes it’s “possible that the NOTW, currently UK public enemy number one, becomes a scapegoat for the entire tabloid industry – and so the whole sector may also suffer.”

covers-news-of-the-world-front-pageFor that reason, CalvinAyre.com continues to raise the alarm over the refusal of failed online sportsbook betED to repay the money it owes its US players. For the uninitiated, betED shut down on Blue Monday (May 23), and Covers.com blogger FreedomAtStake – believed to be a sock puppet shared by Covers founders Paul Lavers and Joe MacDonalddelivered betED’s obituary two days later. Though Freedom was adamant that there was “no money left,” Freedom made promises to recover player funds and announced he was headed to Costa Rica to meet with betED’s owners. But as days and weeks passed with no word beyond rumors of betED’s owners walking away from potential bailout deals, tempers flared and tongues loosened.

The consensus seems to be that Darren Wright, one of the two men indicted in connection with betED, was the man who officially pulled betED’s plug. However, some of betED’s former Costa Rican employees informed us that Wright did so under direct orders from Lavers. Though MacDonald calls the suggestion “total bullshit,” Covers was said to have a suspiciously high revenue-sharing deal with betED. Since as much as 95% of betED’s traffic reportedly came from Covers promoting betED as their top-ranked sportsbook, it appears that Covers essentially was betED, and Lavers and Macdonald were Covers. (Follow the CalvinAyre.com bouncing ball as we broke this story, starting here, here and here.)

The suggestion that Lavers and MacDonald were betED’s beneficial owners sprang from the company’s former Costa Rican employees, none of which have received their rightful severance pay (a serious offence in the eyes of local authorities). We’re now told that the first payments are supposed to be forthcoming sometime after July 22, but lawyers representing betED’s unseen string-pullers have informed employees they will ultimately receive perhaps 20% of what they’re owed. So, yes, the employees have a sizable axe to grind. But their only beef is with betED’s real owners, and they tell us those owners are Lavers and MacDonald.

The emotional toll inflicted on those targeted in the NOTW phone hacking scandal – relatives of slain citizens and soldiers – is something no one should have to endure. But at the risk of sounding insensitive, we’d wager that few, if any, will be going to bed hungry as a result of the NOTW’s misdeeds. The same cannot be said for betED’s ex-employees. In a developing country, the abrupt loss of those salaries – and the lack of severance to bridge the gap until they can find similar employment – means some Costa Rican families will most definitely be going to bed hungry.

Those companies pulling their advertising from NOTW are doing so (a) to protect their brands from guilt by association, and (b) to express their outrage at NOTW’s unconscionable behavior. We think stealing from players and throwing loyal employees out onto the street without paying them what they’re owed qualifies as unconscionable behavior. If William Hill’s review leads the company to conclude that they need to put some commercial distance between themselves and NOTW, would the company consider a similar review of its relationship with Covers.com? We’ve requested comment from Will Hill’s media relations on the wisdom of associating one’s brand with such a scandal-plagued company, and we – along with betED’s stiffed players and stiffed ex-employees – eagerly await their response.

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