SPONSORSHIP experts have questioned Newcastle’s hopes of generating £10m a year from a stadium naming rights deal and criticised the club’s handling of the rebranding of St James’ Park.
The Magpies have renamed their historic home the Sports Direct Arena as an interim measure, with a view to attracting a commercial sponsor willing to pay between £8m and £10m per season for a joint deal also incorporating shirt sponsorship.
“I think they are probably being a bit too optimistic,” Dr Simon Chadwick, professor of sport business strategy and marketing at Coventry University told City A.M.
“The likes of Manchester United, Arsenal, Liverpool, Chelsea and Manchester City may be able to do it, but after that it slips away very, very rapidly and I’m not sure Newcastle have the domestic or international profile to justify this kind of claim.”
While naming rights deals have worked well with new-build stadia, it remains to be seen whether an existing ground, especially one so rich in history and cultural value, can be successfully rebranded.
“I think £10m is on the top side simply because it will not be known as whatever it is called – because it is St James’ Park. Their only hope would have been to call it the X, Y, Z Park,” said John Taylor, chairman of sponsorship and PR agency Sports Impact.
“The fans will not accept it, there will be a backlash, which is not good for the brand associating itself with it. With a new stadium it’s completely different. They are not going to get as much money as a London club or one that has been a very big top club.”
Newcastle fans have expressed their dismay at what they see as the desecration of St James’ Park, which could dent the value of a deal and backfire on the club, and controversial owner Mike Ashley, in the long term.
“I’d be surprised if it was £10m a season. If you are going to do a stadium naming deal there are many reasons why you wouldn’t do this one in particular,” Dominic Curran, deputy managing director of sponsorship consultancy Synergy.
“The reason any sponsor associates with you is to associate with your brand, and if you damage or devalue your own brand then you could lose sponsorship revenue over the long run anyway. Because it’s your brand that you’ve really got to sell. You’ve got to be careful because when you are buying into something like Newcastle you’re buying into the history and local passion – you don’t want to damage that.”
Newcastle announced the immediate rebranding on Wednesday night, a move that appeared to revive and exacerbate friction with their famously passionate support.
Taylor added: “What they should have done and do not seem to have is take soundings from fans and launch a sympathetic PR campaign, not just rush headlong into announcing a crass decision.”
NAMING RIGHTS | VALUE OF BIG DEALS
Emirates Stadium (Arsenal) £100m for 15 years, also including shirt sponsorship
Etihad Stadium (Man City) £300-400m over 10 years, also includes shirt and training ground sponsorship
Signal Iduna Park (Borussia Dortmund) German champions earn £3.5m
FedEx Field (Washington Redskins) NFL side net £4.6m annually
Philips Arena (Atlanta Hawks) NBA franchise pockets £5.8m per season
ANZ Stadium (originally Sydney’s Olympic Stadium) £4m a year