Newcastle United could conceivably get a £300million stadium naming rights deal past the Premier League’s Fair Market Value auditors, Football Insider has learned....CONTINUE READING THE FULL ARTICLE>>>
The 10-year-plus deal would likely include a front-of-shirt sponsorship tie-in as well as a myriad of other branding rights, including an agreement that covers the Darsley Park training complex.
It is almost certain that the blockbuster deal will be with one of the Saudi Public Investment Fund’s blue-chip businesses, and an announcement is expected ahead of the 2023-24 campaign.
Newcastle are desperate to boost their commercial income in order to unlock the near-limitless spending power of PIF, who bought 80 per cent of the club in October last year.
The Premier League has since introduced Fair Market Value assessment in response to fears that PIF could use their £500billion investment portfolio to artificially inflate the Magpies’ sponsorship income.
They have typically earned around £26m annually from sponsorship and merchandising, a fraction of the £200m-plus trousered by the likes of the two Manchester clubs and Liverpool.
Ben Peppi, commercial expert and head of sports services at JMW Solicitors, told Football Insider: “The reality of sponsorship is that it is intellectual property, and intellectual property has a fair market value.
“But at the same time, there is a case to be made that club IP is as valuable as a sponsor is happy to pay, based on the club, the project, activation opportunities and what the future could hold’
“A naming rights deal is likely to include a front-of-shirt partnership, prominent stadium advertising, substantial branding opportunities and perhaps some visible rights at the training ground too.
“That creates a step-by-step justification to the Fair Market Value assessors for why the deal is worth what it is and significantly alters the price they are going to pay.
“An early termination with current front-of-shirt sponsor Fun88 was likely agreed for two reasons. The first being the impending ban on gambling sponsorship in the Premier League and the other being that Newcastle know they are a club going places and will now back themselves to attract a commercial partner at a financial level they haven’t been able to previously.
“I’d suggest over a 10-year deal we’re looking in the region of £20-25m. If it’s significantly inflated, we could be talking £30m-plus, and I think we are definitely looking at an associated-party deal.
“I certainly think that this deal will be announced next summer. It seems like the stars are aligning towards that.
“Those looking at the value of the deal will think it’s inflated. I’ve got no doubt about that. It just depends to what degree.”
