Today Newcastle football club announced it was re-branding St James’ Park as The Sports Direct Arena, after owner Mike Ashley’s company. This is only a temporary measure designed to “showcase” the sponsorship opportunity re-naming the famous stadium could represent to a large corporate sponsor. It is reported that such a deal could be worth up to £10m a season – enough to sign a new player, yet it is extremely difficult to determine what value should be attached to such rights, especially longer term naming agreements.
The attraction of ground naming rights to a sponsor is the opportunity to be associated with all the positive aspects of a sporting organisation in a very high profile way. Of course, the long term poor performance or indeed poor reputation of a sports club can likewise have a negative impact on a sponsor. Such potential pitfalls can be dealt with to an extent, by linking the sponsorship fee to performance on the pitch and including a break clause in the form of a so-called “morality clause” within the Naming Rights Agreement.
From the ground’s perspective, the grant of naming rights makes it difficult to deliver a “clean venue” to any staging partner. This potentially may have an impact on the choice of any governing body wishing to use that ground for a particular event such as an international game or cup final to be played at a neutral venue. This may need to be dealt with in the Naming Rights Agreement, so that the ground has the right to revert the name of the stadium to a non-brand related version for an event hosted by a sports governing body.
Such deals often work best with newly built venues which avoids the problem of changing a ground’s traditional name. However some sponsored names have caught on with the public and media alike – such as The Reebok Stadium (Bolton Wanderers), the Emirates Stadium (Arsenal) and unrelated to football, the O2 Arena (formerly the Millennium Dome).
Perhaps unsurprisingly the announcement today has caused outcry amongst loyal Newcastle fans who feel a great deal of affinity for the ground’s historical name. It is also questionable as to whether a future sponsor is likely to be interested in re-naming Newcastle’s ground a further time, now it is to be named The Sports Direct Arena. Arguably the commercial value has diminished as any sponsor would now be the third name the ground has had in a short space of time.
Chelsea football club hope to announce a new ground naming sponsor before next season. They may well face the same opposition re-naming Stamford Bridge.
If you wish to discuss any issues raised in this blog please contact emily.sadler@parissmith.co.uk