Yahoo News Newcastle United's bold £40m Adidas move can boost FFP hopes and chances of box-office signing
Newcastle United CCO Peter Silverstone is confident that the club's ability to build the team "on the pitch" will work hand in hand with the retail operation unfolding impressively around it.
Silverstone was a shrewd signing by the club's Saudi backers after leaving Arsenal to become the Magpies' commercial supremo. The Scotsman has spearheaded the club's off-field rebuild after inheriting a Newcastle commercial set-up with a low-budget Castore deal, compared to the new £40million a season Adidas contract, and an operation that was failing to make the most of the potential at St James' Park. As Newcastle try to close the gap between last year's £250m revenue and that of Man City, who posted a £700m fortune last time out.
Speaking at the launch of the club's new Stack-style club shop, Silverstone underlined the importance of getting Adidas back on board after a 14 year absence and how vital maximising revenue is in order to boost Eddie Howe's transfer kitty. The Castore deal was worth a paltry £5m a year while former sponsors Fun 88 brought in a drop in the ocean compared to the £25million a year bonanza.
READ MORE: "We have big plans", Peter Silverstone talks about club's opening phase of Adidas plan
United will now bring their club shop operation back in-house after previous owner Mike Ashley had left Castore to run the show, a decision that hit income and produced mixed results in terms of customer satisfaction.
Silverstone told local reporters: "If you look at retail and commercial revenues separately, then it’s pretty easy to increase your retail revenues when you don’t have any (referring to life shortly after the takeover).
"That’s the starting point, really. Bring retail in-house, and build a product range with Adidas, and outside of Adidas, that reflects the demands of your fans.
"Bring in product that they can buy, and then build retail revenues from there. We’ve already discussed bringing everything in-house – we will now build our own retail business.
"Retail is not just Adidas and kits of course, it’s caps, bags, calendars, board games, golf products – whatever the fan is willing to buy, we’ll try to find for them. Then, you’ve got commercial revenue. Clearly, building sponsorship income is vitally important.
"Revenue, in general, is vitally important given the European and Premier League rules. The more we have, the more we can spend on the pitch, which is what every football club wants to do.
"Building those commercial revenues is really important, and having the right group of commercial partners is important too, partners who are going to build you revenue."
Newcastle have deals like Noon.com and Inpost helping to boost the coffers and as Silverstone showed reporters the club's exciting plans, stars like Bruno Guimaraes, Tino Livramento, Nick Pope and Lewis Hall, along with club ambassador Rob Lee, were involved in a filming shoot at St James’ Park.
Silverstone is enthusiastic about the future and said: "We’re on track to bring those partners in, and it’s partners that are going to help you build your brand. That’s what Sela have been doing with us, with ‘Unsilence the Crowd’ and the drone show.
"Saudia (airline) are able to launch an incredible activation within the city, which you’ve seen a glimpse of, with the Formula E collaboration."
Barely a stone has been left unturned since Silverstone arrived on the commercial scene and expanded the department at St James' Park. Adidas shoots involving Callum Wilson, Bruno, Joelinton and Anthony Gordon have been spotted this season and Sam Fender is also prominent in the marketing of the new kits.
But Silverstone suggested there is more to come: "I don’t need to tell you that Adidas have some pretty extraordinary launch plans for us, which will put us on a global marketing platform, which is fantastic. The bigger we build our brand, and the more profile and activation we do, the more other partners want to partner with us.
"Most importantly, the more we do globally to build our brand, the more people want to be associated with us and follow and support our team."
Newcastle are set to be named as one of Adidas' elite clubs and about to join a list that includes Arsenal, Manchester United, Bayern Munich, Real Madrid, Juventus and Flamengo. The global reach is vital in the view of Silverstone: "Unlike people who are born in Newcastle, who I would hope will always be Newcastle fans, if you’re born in New York or Riyadh or Beijing or Shanghai, then you don’t have a local connection.
"You follow a club that you relate to, whether that’s the colours of the strip, players, activations like ‘Unsilence the Crowd’, what the city means to you – a whole host of things.
"It’s really important we grow that global audience and relevance, to then bring in increased commercial revenue."
