Newcastle United are reportedly in talks with a firm funded by its owners about a £30 million per year shirt sponsorship deal
Newcastle United are reportedly in talks with a new front of shirt sponsor, which would help them close the gap on their rivals after securing Champions League football for next season.
According to Sky News, the Magpies are in talks with Saudi Arabian events company Sela to replace the outgoing betting firm FUN88 for a new shirt deal worth a reported £30 million per year.
Newcastle have proven to be the Premier League’s disruptors with their project, following the takeover by the Saudi Arabian Public Investment Fund in 2021, at a more advanced stage than many had predicted, especially given that the club had not yet truly flexed the financial might that it now possessed.
With UEFA’s new financial fair play regulations kicking in last summer, which require clubs to have their transfer, wages, and agents payment ratio at no more than 70% of turnover, the Magpies’ qualification for the Champions League and the riches that can offer will help them unlock the next wage tier of £200m-£250m to help them establish themselves.
Newcastle’s ability to drive forward commercial revenues is central to their growth strategy and ability to continue investing in top talent and paying higher wages and transfer fees, with the club’s front of shirt sponsor being their most valuable asset in this regard.
If signed at the reported £30m per year rate, the new deal would represent a significant increase over the £6.5m per year that the club was thought to be receiving as part of the multi-year deal with FUN88.
But, with Newcastle now in the Champions League and a completely different proposition, the ‘fair market value’ rule introduced by the Premier League in the aftermath of the PIF takeover will be argued at a much higher rate than it was previously, with St James’ Park chiefs likely looking to achieve parity with the kind of sums that Tottenham Hotspur have managed to extract from their deal with AIA.
During their pre-season tour of Thailand and Singapore last summer, Liverpool negotiated their own new front of shirt sponsorship, extending their partnership with Standard Chartered, which began in 2009. That contract is thought to be worth more than £50 million per year to the Reds.
Because of Liverpool’s position as an iconic global brand, any attempts to try land deals for the same price as Newcastle would almost certainly be met with criticism from the Premier League for violating fair market value rules. However, by achieving such a significant increase from their previous commercial deal for front of shirt sponsorship, the Magpies have demonstrated the trajectory that they are on, with their qualification for the Champions League likely to open up a slew of other commercial opportunities to allow them to grow revenues, which will, in turn, underpin spending on transfer fees and wages.
What will be revealed is how much Newcastle has been able to rely on simpatico relationships with Saudi businesses through ownership. Since the PIF takeover, deals have been struck with regional firms such as Noon and Saudia, with a potential deal with Sela being the most valuable of them all if it comes to fruition. Sela is funded by the PIF, which will almost certainly put the Premier League’s rules on third-party transactions to the test.
When it comes to commercial partnerships, Liverpool has focused on attracting global, blue chip brands. The challenge moving forward will be to extract more value from those transactions in order to fend off Newcastle’s growing financial muscle, having already lost the battle with Manchester City in those stakes.
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