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Mounting Pressures End Caesars’ Sponsorships Of College Athletics

Written By Derek Helling on June 2, 2023 - Last Updated on November 29, 2023
caesars' sponsorship of lsu and michigan state athletics has ended

LSU athletics might have used some cash from Caesars to buy air-conditioned helmets for its American football players. If there are any similar equipment upgrades in the future, though, LSU will have to find other sources of funding.

Caesars, LSU, and Michigan State are parting ways, ending their sponsorship deals. The decisions come amidst a torrent of both external and internal pressures that made terminating the deals the easier move for all parties.

Caesars, LSU, Michigan State cancel sponsor contracts

On May 28, Graham Couch of the Lansing State Journal reported that both Caesars and Michigan State decided it was time to go their separate ways. On Thursday, a spokesperson for PlayFly Sports confirmed to Sam McQuillan of Legal Sports Report that Caesars and LSU replicated that action.

For parties in both Michigan and Louisiana, this news represents early exits. Both sponsorship contracts had multiple years remaining. In both cases, the value of the deals on both sides became net losses. In LSU’s case, for example, it had become increasingly difficult to justify the value of the contract when the athletic department can afford to provide air-conditioned helmets for athletes.

That was simply because there were other costs associated with continuing the partnership.

Internal criticisms for LSU, Michigan State

Both LSU and Michigan State received plenty of criticism for their partnerships with Caesars. Some of that came from right on their campuses.

In January, LSU faculty grilled athletic department staff on the Caesars deal. Part of the faculty’s negative fervor for the partnership came as a result of a Caesars promotional email that went out to students from LSU athletics.

In April, Michigan State faculty led a petition drive urging the athletic department to cut ties with Caesars. LSU and Michigan State weren’t the only parties to these deals facing some internal pressures, though. Caesars’ experience has been similar.

Gambling industry makes pressure on Caesars to end sponsorship deals

Caesars wasn’t alone in its sponsorship of collegiate athletic programs. However, such deals fell out of style. For example, PointsBet canceled its deals with Colorado and Maryland earlier this year. That left Caesars as the lone outlier on the issue.

Not only did Caesars risk its public image by holding on while others were jumping ship but the bottom line was sending a message as well. During the company’s first quarter 2023 earnings call, CEO Tom Reeg shared that the company was upside down on these sponsorships.

Simply put, the business the deals were generating wasn’t commensurate with the money that Caesars was spending to maintain them. That made them hard to justify while the company was otherwise pulling back on its marketing spend.

Internal pressures weren’t the only forces acting on these matters. Adjacent figures piled on as well.

Governmental forces take interest in sponsorships

Several states have at least considered legislation to regulate gambling companies’ sponsorship of college athletics. For instance, New Jersey is currently weighing a bill that would require institutions in the state to devote part of their funds from such partnerships to responsible gambling education.

However, the highest-profile action on the issue came from US Sen. Richard Blumenthal (D-Conn.).

Blumenthal sent letters to over 60 colleges and universities asking them for details of their policies regarding such sponsorship deals. That scrutiny on the federal level may have proven the breaking point for Caesars, LSU, and Michigan State.

It’s more likely that the sum of the parts was greater than the whole in this instance, though. The least probable explanation was that Caesars, LSU, and Michigan State suddenly decided their partnerships no longer “fit their values.” That is, unless you consider making money that value.

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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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