Newcastle United could strike £500m deal that would blow Barcelona and Tottenham out of the water

Football clubs selling the naming rights for stadia is not a new phenomenon.

In the Premier League already exists the AMEX Stadium, the King Power Stadium, the Emirates Stadium, the Etihad Stadium, and the Vitality Stadium, among others. For all but the latter, the stadium naming rights changes came after a move to a new venue, where the perceived shackles of tradition were removed.

The issue of stadium naming rights isn’t new for Newcastle United, either. Back in 2009, then under the ownership of Mike Ashley, the Magpies renamed their home sportsdirect.com@St James’ Park. What followed in 2011 was the renaming of the stadium as the Sports Direct Arena, with then managing director Derek Llambias talking up the value of such a move.

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In a statement, Llambias explained: “Our aim for Newcastle United is to continue to deliver success for the fans and everyone associated with the club. We must make this club financially self-sufficient in order to deliver that success.

"To grow sustainably and allow us to invest in our future, we will need to rely increasingly heavily on commercial income. Stadium rebranding offers a lucrative way for clubs to secure significant additional income."

It was a move that proved to be deeply unpopular, so much so that when Wonga.com acquired both the shirt sponsorship and stadium naming rights in 2012 they opted to revert back to the stadium being known as St James’ Park.

Things are different at Newcastle now. The acquisition of the club by the Saudi Arabian Public Investment Fund (PIF) at the end of 2021 ushered in a new era for the club, but despite being owned by one of the world’s richest sovereign wealth funds, the club is bound by what it can do in the transfer market due to the Premier League’s financial controls that exist, with the club having to engage in player trading to a significant extent on the final day of their financial year to ensure compliance with the League’s profit and sustainability rules (PSR).

PSR, as well as the greater controls that now exist around associated party transactions, something that could have been a significant lever for Newcastle to pull to raise commercial revenues and ease PSR worries, means that the club have been unable to build on their qualification for the Champions League and were even faced with the prospect of losing stars such as Alexander Isak and Bruni Guimaraes due to financial controls in June.

But the stadium naming rights potential for St James’ Park remains untapped, with no such move as yet made by the PIF. But as economic pressures on football clubs continue to build, and the odds keep getting stacked higher against those wanting to bridge the gap between themselves and the so-called ‘big six’, will there ever be a time when it would be more palatable for fans, and just how valuable could it be?

In Spain, Barcelona were willing to risk wrath when they sold the naming rights for the Nou Camp to streaming giant Spotify. That deal could have been worth more had it not been for the fact that Barcelona had limited data on their fans, something that Spotify put a great deal of focus on and that damaged the overall value.

There is no doubt that Newcastle United could command an sizeable sum on a multi-year deal from a potential naming rights partner, potentially with links to the Middle East, given their status and at a time when the sport is increasingly globalised and reach extends into territories such as the US that now have a huge interest in the game of ‘soccer’, with the Premier League’s US TV deal making up 20% of all global broadcast revenue for the most recent cycle.

Tottenham Hotspur’s 2019 move to a new purpose-built stadium on the site of their old White Hart Lane ground saw them take residence on one of European football’s most state-of-the-art venues.

With a build that cost some £1.2bn plus, with £800m worth of debt still existing on the balance sheet as a result, the club looked into stadium naming rights early. Links with potential partners such as Google were mentioned but given Spurs chairman Daniel Levy’s notoriety for getting a good deal, the club are understood to be holding firm on what they believe the value of such a sponsorship space should be.

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Levy has also previously talked about the potential value of not handing over stadium naming rights to a firm, instead keeping the Tottenham Hotspur Stadium name, something that could be impactful in growing markets, especially given that the stadium hosts NFL regular season games annually.

But the US market is not the UK market and the same kind of success can’t be assumed.

In 2019, financial firm SoFi acquired the naming rights to the home stadium of the Los Angeles Rams, and Los Angeles Chargers in a mammoth $600m-plus, 20-year deal. In 2021, Crypto.com paid $700m to take over the naming rights of what was once known as the Staples Center, the home of the Los Angeles Lakers and Los Angeles Kings. In 2024 the Los Angeles Clippers will open a new purpose-built arena in Inglewood, the rights for that have already been sold to Intuit for $500m.

Los Angeles sits in California, a state with a bigger GDP than France, India, Italy, and Brazil. It is home to some of the biggest firms in the world, firms that generate billions upon billions of dollars in revenue each year.

There is a trend in the US for major local firms to be the ones to take up the stadium rights. In the absence of front-of-shirt sponsorship opportunities across major North American leagues, although small jersey sponsorship patches are now permitted, and with the in-stadium branding fairly clean in US sport, stadium naming rights have a significant pull.

Speaking to the Bottom Line earlier this year, Daniel Haddad, head of commercial strategy at global sports agency Octagon, explained: “It's a completely different mark in the US, and I think one of the big mistakes that a lot of European clubs or sports entities make is actually trying to draw a comparison on the value of a stadium naming rights deal in the US and trying to translate it into what that could mean in Europe.

“Essentially, the key difference is that if you look at traditionally how sports teams are able to sell their assets in the US, they don’t have to share, they don't have the kind of other highly visible points of entry.

“The market in the US is almost kind of trying to accommodate those with jersey patches, etc. But it’s always been in the US that stadium naming rights is the top-tier asset in terms of brand recognition and exposure.

“There isn’t the same extent of field signage in the US. If you watch an NFL game it is pretty much a clean environment from a stadium branding perspective.

“Obviously the model there is different and you get a lot of a lot more brands integrated in the broadcast spotlight as in sponsored segments on CBS or ESPN, but the actual playing environment is a lot cleaner.

“Crypto.com is actually one of the exceptions to this, but mostly stadium naming rights are purchased by a massive business located in that state. So, if you look at most of the stadium naming rights deals in the US, the corporation would usually be a US company with its headquarters in that state.

“The economies of these states can be massive. California is bigger than the UK economy, and in every state you have multiple businesses. The signature is billion-dollar revenue businesses that can afford that as a marketing expenditure. So, that's why it’s a different market.

“The other thing to consider is that it’s always hard to sell a stadium naming rights deal outside of the US when it's not a multi-purpose, 365-day-a-year venue.

“If you look at in the UK, for instance, even like the Co-Op Arena in Manchester, that was sold before it was constructed because that isn’t a football stadium with a limited number of home games where the brand is present and then competitions like the Champions League on the calendar, where there is limited reference to the stadium naming partner and branding is taken over by UEFA sponsors.”

A number of clubs have sold stadium naming rights, with Arsenal’s move away from Highbury seeing them enter into a long agreement with Emirates, while Manchester City has the Etihad Arena, Brentford has the Gtech Community Stadium, and Brighton & Hove Albion has the AMEX Stadium.

All were new builds, unbound from the traditions that stopped the selling of rights previously, while three of those four teams have alignment across major shirt sponsorship and stadium sponsorship, with Arsenal, Manchester City, and Brighton’s front-of-shirt sponsors the same as the stadium naming partner, limiting the dilution of rights and brand visibility.

Said Haddad: “For sponsors, you've got the 19 matches in the Premier League and then a domestic cup. There are no rights around the Champions League or Europa League.

“Let’s say, for example, that a club hosts games in the Euros or World Cup, the commercial rights don't don't apply. So actually, the frequency of exposure for brands in these areas is a bit more diluted than you might initially think.

“It's why something more ubiquitous like a shirt deal is always there as commercial partners now how much value and exposure they are getting.”

Newcastle would be able to yield higher commercial revenues to be able to funnel more money back into the first-team squad. But that would involve breaking with tradition and losing some goodwill along the way, and that is a major risk factor for ownership, regardless of the value of the deal.