In the upcoming seasons, stadium naming rights are probably going to become a more popular method of increasing commercial revenue.
The Premier League already has venues like AMEX Stadium, King Power Stadium, Emirates Stadium, Etihad Stadium, and Vitality Stadium; for all but the latter, the stadium naming rights changes followed a move to a new location where the perceived constraints of tradition were lifted. Football clubs selling the naming rights for stadiums is not a new phenomenon.
For Newcastle United, the problem of stadium naming rights is also not new. When Mike Ashley owned the Magpies in 2009, they changed the name of their home field to sportsdirect.com@St James’ Park. The stadium was renamed the Sports Direct Arena in 2011, and Derek Llambias, the managing director at the time, emphasized the significance of the change.
Llambias said in a statement: “Our goal for Newcastle United is to keep delivering success for the supporters and everyone connected to the club. To achieve that achievement, we need to financially stabilize our club.
“We will need to rely more and more on commercial income in order to expand responsibly and make investments in our future. Rebranding stadiums is a profitable strategy for teams to bring in a sizable sum of extra cash.”
This was an extremely controversial decision, to the point that in 2012, Wonga.com decided to rename the stadium St. James’ Park after acquiring both the jersey sponsorship and the stadium naming rights.
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 a 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 moved to one of the most cutting-edge stadiums in European football in 2019 when they moved into a new, purpose-built building on the site of their former White Hart Lane pitch.
After building a facility at a cost of more than £1.2 billion and accruing debt totaling £800 million, the team began investigating stadium naming rights at an early stage. Links to prospective sponsors like Google were made public, but Spurs chairman Daniel Levy is known for negotiating well, so the team is reportedly adamant about what they think a sponsorship spot is worth.
Levy has also previously discussed the possible benefits of retaining the Tottenham Hotspur Stadium moniker rather than giving stadium naming rights to a company. This might have an influence in developing markets, particularly as the stadium hosts NFL regular season games every year.
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.
California, where Los Angeles is located, has a GDP greater than that of France, India, Italy, and Brazil combined. Some of the largest companies in the world, with annual sales in the billions of dollars, are based there.
In the US, it’s common for large local businesses to own stadium rights. Stadium naming rights are quite appealing because most North American leagues do not offer front-of-shirt commercial options, but modest jersey sponsorship patches are now allowed and in-stadium branding in US sports is generally clean.
“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 that into what that could mean in Europe,” said Daniel Haddad, head of commercial strategy at global sports agency Octagon, in an interview with the Bottom Line earlier this year.
“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.
In the US, field signage is not as prevalent. When it comes to stadium branding, an NFL game is generally a clean place to view.
“The actual playing environment is much cleaner, but the concept is obviously different there, with a lot more companies embedded in the broadcast limelight as in sponsored portions on CBS or ESPN.
Although there are several exceptions, most stadium naming rights are acquired by a sizable company based in that state (Crypto.com is one of them). Accordingly, the firm would typically be a US company with its headquarters in that state if you look at the majority of stadium naming rights agreements in the US.
These states have enormous economies. The economy of California is larger than that of the UK, and there are numerous enterprises in every state. Businesses with billion-dollar annual sales are the signatories, as they can afford to spend that on marketing. It’s a different market as a result.
“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.”
Many teams have sold the right to name their stadiums. After leaving Highbury, Arsenal signed a long-term deal with Emirates; Manchester City owns the Etihad Arena, Brentford owns the Gtech Community Stadium, and Brighton & Hove Albion owns 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.
The commercial rights are not applicable, for instance, if a club hosts matches in the World Cup or the European Championship. Therefore, contrary to popular belief, companies do not receive as much exposure in these locations as they may originally.
“That’s why, given the value and exposure they are receiving as commercial partners, something more commonplace like a shirt deal is always there.”
Newcastle might generate more income from sponsorship deals in order to reinvest more funds in the starting lineup. But, regardless of the deal’s worth, that would mean defying custom and losing some goodwill in the process, which is a significant risk element for ownership.
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