More derision from corporate sponsorship industry over St James’ Park naming deal
Posted on November 16th, 2011 | 32 Comments |
I was planning to write a follow up to my previous piece on why Mike Ashley’s “rebranding” of St James’ Park was ill conceived from the very start and doomed to fail.
In it I was going to outline how the value of Newcastle United’s brand has been damaged so much by this that it will lose far more in the long term that the minimal amount gained through selling the stadium’s naming rights. Going on similar deals on considerably less problematic new build stadiums, this amount will be nowhere near the £8-10 million foolishly quoted in public by Derek Llambias in an interview with BBC Radio Newcastle. Going on similar examples such as Arsenal’s Emirates Studium and Borussia Dortmund’s Signal Iduna Park, it will be more like a third to a half of that sum unless a shirt deal is also included and even then, the price is still somewhat ambitious.
As most of you will know, current shirt sponsors, Northern Rock, recently pulled out of their recent rather meagre £2 million per annum shirt sponsorship deal, and it has even been suggested that the furore over the Ashley’s second attempt at a stadium rebrand will jeopardise this sponsorship, as potential sponsors distance themselves from this now toxic brand. As I mentioned in my previous piece on the subject the offer has been almost universally derided by the people in the sponsorship industry who advise corporations on the efficacy of such deals, with one exception, from someone called Jonathon Gabay, who was reported as being an “unofficial consultant” to the club on the renaming issue.
Anyway, my original plans were thwarted as this piece from IMR publication’s “Sports marketing & sponsorship intelligence”, written the day after my own previous item on the subject has already elaborated on the themes I was going to explore from within the industry.
On how Newcastle United’s existing brand has been damaged, and how this may affect a new shirt sponsorship deal it comments:
“First, it is important to understand that Newcastle United is a strong brand in its own right. Its large, passionate fan base is one of the key brand strengths, its proud history is another and part of that history is its home; St James’ Park.
“By damaging the relationship with the former and appearing to degrade the latter, the club’s board has effectively done as much damage to that brand as could be achieved with a single press release.
“The current likelihood of a major international company wanting to take naming rights is very low and given that Northern Rock has just announced termination of its primary deal with the club (not, according to the bank, because of the latest controversy), the issue could devalue the shirt sponsorship rights as well.”
It then goes to back up my own theory that Ashley’s ridiculous “showcase” idea, which I outlined in the previous piece, will actually be a further hindrance, rather than a help in finding a naming rights sponsor, adding:
“Arguably the most bizarre decision made by the club, however, is to brand the stadium as the Sports Direct Arena (named after Mike Ashley’s sports goods company) for a year to showcase the opportunity. What it has showcased to date is the sheer naivety of the club’s board. First, naming rights deals work over a long-term. They are not used for short-term tactical marketing or generating brand awareness but for long-term relationships and brand building.
“Look at naming rights deals around the globe and it is very rare to find any that run for less than five years and most significant examples run for 10 years at minimum. It’s difficult to see how the Sports Direct Arena name can be activated to create a ‘showcase’. There is little time to do anything significant to bring the new name to life, especially with such universal derision among the football, media and marketing communities.
“So what can the board prove to potential sponsors?
“Surely had they wished to demonstrate levels of stadium name awareness and positive resonance, they would have been a lot better basing the marketing on the existing name. What they are inviting now is a comparison between awareness and positive feelings that surround St James’ Park with the results from the change. There is only one way this can go and it won’t be appealing to sponsors.
“The type of major sponsor that the club is targeting will be represented by sophisticated marketing professionals. They already understand how naming rights work and they know how to research the value and potential; they don’t need an irrelevant and counter-productive exercise to help make their decision.”
Although the renaming of much loved grounds with long traditions has previously been avoided, Derek Llambias recently cited Chelsea’s recently announcement that they would be offering stadium renaming rights on their traditional home, Stamford Bridge, as a justification for Newcastle United’s stadium renaming rights offer in the interview linked above. The artocle also compared the two saying:
“Chelsea will certainly have a better chance of succeeding than Newcastle. First, the club has gone about the process in a more professional way having explained the need to increase stadium capacity to compete and fans are aware that the Financial Fair Play rules could hamper the club’s ambitions unless new revenues are found. If it remains at Stamford Bridge, a major redevelopment could dovetail with a naming rights deal to make it more acceptable to fans.
“Equally important, however, is that the demographic and attitudes of the fanbase are very different to Newcastle. Chelsea’s ground is in affluent west London with season ticket prices starting at £595, whereas Newcastle is based in the more working class North East and season tickets start at £345.
“Although both clubs have a long and proud history, Chelsea has been seen as a more commercial and ‘trendy’ club for several decades. The fans saw the first three-tier stand opened in England in the 1970s, hotel and leisure infrastructure built in the 1990s and the words Chelsea and big money are regularly uttered in the same sentence. Its fans, therefore, are more likely to be accepting of commercial change than those of Newcastle. This is not a value judgement and it certainly doesn’t mean that either set of fans is right or wrong – it is a simple fact that there is a difference. In the case of naming rights, it means that Chelsea are more likely to overcome what will be very significant obstacles to successfully achieve a change.”
Although substantial sections of the sports marketing & sponsorship intelligence piece have been quoted above, it is well worth reading the piece in it’s entirety. After reading much material from the industry on how incredibly ill-conceived this latest naming rights offer is, just as the first failed attempt was two years ago, it only seems to reinforce my initial suspicions that the move is in fact a ruse. I certainly wouldn’t be surprised if the hideous “Sports Direct Arena” name remains for years to come, with the club receiving little or nothing in sponsorship fees from Ashley’s Sport’s Direct International PLC. As suggested abpve, it will also make the now vacant shirt sponsorship opportunity far more toxic than it was before too.