http://www.guardian.co.uk/football/2011/nov/10/newcastle-sports-direct-arena-sponsorship?CMP=twt_gu
Newcastle United's hopes of raising £8m-10m a year in new income from their stadium naming rights are highly unlikely to be realised because the plan breaks the "golden rules" of a successful sponsorship property, industry experts have warned.
Newcastle are third in the Premier League after an 11-match unbeaten start to the season and announced on Wednesday that St James' Park is to be renamed the Sports Direct Arena. Derek Llambias, the club's managing director, said : "I would hope to generate between £8m-10m a year, that will give us another player." It was, in the eyes of sponsorship consultants, the worst possible thing he could have said.
Shaun Whatling, the chief executive of the management and brand consultancy company Red Mandarin, cast doubt on Llambias's forecasts, saying: "They're unwise to raise expectations of £10m incremental revenue and creating linkage with new signings – there's already antagonism amongst fans to the sale of naming rights and Derek Lambias is now preparing a frosty welcome for any sponsor buying in 'on the cheap'."
Tim Crow, the chief executive at the sponsorship consultancy Synergy, believes the best way to avoid the risk of brand damage for interested sponsors would be to stay away. "I'd be very surprised if any brand came forward and if any of my clients asked me for my opinion I'd advise them in the strongest possible terms not to," said Crow. "Or they could do the shirt sponsorship on its own, which would be entirely positive."
Crow has devised six "golden rules" for a successful naming-rights proposition and it is clear the latest development breaches them. His advice is never to rename an existing stadium with a strong heritage and, 125 years after the club first played football there, St James' Park certainly qualifies as that. The exception, Crow has written, is when stadium operators rebuild or relaunch an unloved or decrepit stadium, when a sponsor's cash provides tangible improvements to the facility. This happened at the Millennium Dome (now the O2) and Dublin's Lansdowne Road (now the Aviva Stadium).
But at Newcastle, a wholly owned subsidiary of the retailer Sports Direct, the extra money would go towards players; the likely net effect being only that the unloved parent company is spared the expense. "They've driven a cart and horses through the golden rules," said Crow, who described the stadium's former incarnation as SportsDirect.com@St James' Park as "a horror".
Andy Westlake is the chief executive of the sponsorship and management firm Fast Track and advises clients including Emirates, which signed a successful shirt and stadium deal with Arsenal in 2004. The deal was worth £6.5m a year in shirt sponsorship and only about £2.75m in naming rights. Those were more buoyant economic times but Arsenal discounted the sponsorship value to receive cash up front, without which their new home could not have been built. Although Manchester City's £200m-plus, 10-year deal with Etihad bucked a declining trend in naming-rights values, the relationship between Abu Dhabi's national flag-carrier airline and its Premier League proxy may have distorted the value of that contract. Westlake cannot see Newcastle achieving anything like that amount.
"I don't think any brand will be buying in to naming rights at Newcastle unless they are focusing on building a relationship with fans," said Westlake.
With Mike Ashley trending on Twitter on Thursday in a far from complimentary context, that is unlikely. "In this [recessionary] market you have to recognise what sponsorship is about: adding value for fans in the club they love," added Westlake. "But Newcastle fans are universally against this. Perhaps he's generating the wrath so that a brand coming in can restore the St James' Park name and be loved for it. Otherwise, I can't explain it."
Joey Barton, who left Newcastle in August to join QPR, thinks he can. "Ashley and his subordinates, know the cost of everything but the value of nothing…" he tweeted. "#numpties."
