The Chronicle are reporting today that Newcastle will announce a new sleeve sponsor for the upcoming season next month.
One of the weak areas of revenue for Newcastle has always been the commercial side under Mike Ashley, and we lag well behind the top six clubs and even others in the Premier League.
But finishing in 10th place last year and being a favorite team on live TV with Rafa Benitez on the sidelines should help the club get much better commercial deals in general.
And especially from the shirt sleeve sponsors.
It would have helped the negotiations with shirt sponsors if we already had Rafa signed up to a multi-year deal to stay on Tyneside.
It’s another area where Benitez will bring increased revenues to Newcastle as well as the high financial returns of finishing progressively higher in the Premier League – hopefully.
Last season was a one-off with tire company Madras Rubber Factor Limited (MRF), and quite a few PL clubs had them as shirt-sleeve sponsors.
Rafa Benitez – Newcastle’s most significant revenue driver
Newcastle are now hoping to get a multi-year deal tied up with much higher revenues.
Arsenal announced a £10M per year deal with Visit Rwanda last month, but we will not get anywhere near that figure – at least not yet.
Apparently, five companies are interested in being the short-sleeve sponsors of Newcastle, so that’s good – maybe that will push the price up because of the competition.
Commercial revenue is an area where top football clubs can differentiate themselves from other clubs, with the most successful clubs getting some massive commercial income.
That’s not Newcastle – yet – but if we can tie down Rafa to a long-term deal and Mike Ashley takes Rafa’s handcuffs off and starts to support him, then commercial revenue will increase quickly as sponsors are anxious to become associated with a successful and popular Newcastle United Football club.
Deloitte Sports Business Group stressed in their annual report a few weeks back that commercial revenue was vitally important to top clubs:
Here’s a bit from their report as published in the Chronicle today:
“As a key source of revenue under a club’s control, commercial revenue is the area where clubs have the greatest opportunity to differentiate themselves from their competitors.”
“The development and exploitation of commercial opportunities over the next 10 years is therefore the key growth opportunity for clubs.”
“Whilst for broadcasting rights, clubs act collectively, they are in a fiercely competitive market for commercial deals.”
“As a result, this market has become increasingly crowded, with clubs at all levels offering commercial partners multiple entry opportunities at a wide variety of price points.
“The result is a lack of clarity and an advantageous position for the commercial partner, who can play any potential suitors off against each other in order to drive the price down.”
This is another opportunity for Mike Ashley, but the owner seems to specialize in not spending money – and that’s hardly a good trait if you want to be a successful football club.
And it’s the successful clubs who make big money in commercial revenues – not the ones who are content on merely staying in the Premier League and spending as little money as possible to achieve that.