There is an arms race going on as we speak behind the scenes at Premier League clubs up and down the country. Nearly half of sides in the top-flight are in the market for a new front of shirt sponsor, including Newcastle United, who stand to bank the largest deal of its kind in the club's history.
It certainly promises to be a significant upgrade on the £6.5m-a-year Newcastle earned from a rather one-sided partnership with FUN88, which even part-owner Amanda Staveley admitted earlier this month was a 'very difficult' contract to have inherited from the Ashley era. This was the sort of deal you associate with clubs towards the bottom end of the table, who have come to rely on betting companies as sponsors, but Champions League-chasing Newcastle will be able to negotiate a very different contract this time around.
In fact, Newcastle could be out on their own as the only top-flight club to have a Saudi Arabian front of shirt sponsor as industry sources expect. While this partnership is unlikely to compare with the figures the traditional big six can command, where the starting point is now around £40m-a-year and the ceiling is at the £55m-£60m mark, there is a significant gap between these sides and the next group of clubs.
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This is the area where Daniel Haddad, the head of commercial strategy at Octagon, who advises brands such as Budweiser, Mastercard, Expedia and Standard Chartered on their sports marketing asset investments, has predicted Newcastle will fall into initially.
"They will probably end up being in a new territory of still significantly below the top six but quite significantly ahead of the rest," he told ChronicleLive. "I foresee that being in the £20m kind of ballpark because that to me seems to be like a price point in the market that is quite significantly above what Newcastle's current competitive set might be, but still below those other clubs.
"Potentially, then, depending on the length of the deal and the terms of the deal, it's not uncommon to build in bonus structures within that. What you probably don't want to do at a club like Newcastle is lock in a value for five or six years, especially if the club starts competing in the Champions League and at the top end of the table on a regular basis.
"You don't want to be locked into a fee that becomes below the market rate so I envisage a scenario where potentially there is a base rate but maybe a bonus structure that's aligned with Champions League qualification, league position, trophy wins, etc. that protects the club if they enter into a longer-term deal. The complication of that type of structure is to what extent is that going to fit within the current Financial Fair Play protocols?"
Those 'protocols' that Haddad referenced, namely the Premier League's fair market value regulations, bring their own challenges and it is important to stress Newcastle have a huge gap to bridge off the field after years of commercial stagnation in the Ashley era. While Newcastle's return to the Deloitte Money League showed the progress the club have already made in the last 12 months, it was also a stark reminder of the work the Magpies still have to do off the field. Indeed, the £33m Newcastle made in commercial revenue in 2021-22 was less than a 10th of the £336m Paris Saint-Germain generated in the same period, according to Deloitte's analysis.
Yet there can be no doubt that Newcastle have untapped potential off the field and there is a reason why chief commercial officer Peter Silverstone felt moved to return to the Premier League after a previous spell with Arsenal. There are a host of obvious areas to Silverstone and co to target, whether it is launching an app with exclusive content; opening up more commercial opportunities with a new kit manufacturer in the years to come; embarking on a series of overseas pre-season tours to slowly build up a presence abroad; and, in the long-term, potentially selling the naming rights to the training ground or even St James' Park if fans are open to that prospect following consultation sessions.
Playing in the Champions League or the Europa League would also open doors when it comes to justifying lucrative commercial deals are of fair market value and Newcastle are set to announce a number of new partnerships in the coming months to potentially boost spending power.
Although Newcastle currently have 16 partners, it is worth noting the majority of these deals pre-date the takeover. It begs the question: are Newcastle an attractive proposition to top-tier partners at this moment in time?
Sol Lovemore is the founder of commercial agency Lovemore Sports, who work with Fulham, the Ghana national football team, West Ham star Lucas Paqueta and Arsenal forward Reiss Nelson among others. Lovemore has described Newcastle United's history and heritage as a 'real advantage' in helping the club 'build a really compelling case' for sponsors - even if it will take the club time.
"Some of the other clubs have real blue-chip, multi-billion dollar organisations that have joined as partners," he told ChronicleLive. "That is what Newcastle are lacking a little bit, but I genuinely believe once you have one or two, more will start to follow.
"The first one is always the hardest because you have to get that first sponsor to really believe in the vision. That's what it's going to come down to: having a great vision for the project.
"Not only what they are doing now, but what Newcastle looks like in the long-term so sponsors and investors can go on that journey with them. That's where they will be able to unlock those premium sponsors that will increase the appeal of the club."
The first stage of that journey will be captured in a new four-part documentary by Amazon, which will focus on the commercial side of the club, and open up Newcastle to a new audience around the world. Yet, in truth, sponsors already know about the club's loyal fanbase as those scenes at Wembley showcased last month when supporters waved their flags in the final minutes of the Carabao Cup final defeat against Manchester United.
With those 'very loyal' fans in mind, a former commercial director at a leading Premier League club, who did not wish to be named, said Newcastle will be able to provide 'incredible value for partners coming on board now' once the Magpies 'start increasing their digital landscape and reach'.
"I see Newcastle growing as a commercial force and a commercial opportunity over the next decade," he told ChronicleLive. "It's one of the last really big clubs in Europe that hasn't been fully commercialised and it's a great opportunity for commercial partners to be involved at the beginning of a new journey. Now is the time at the beginning of a journey for partners to get involved
"There is significant opportunity both for the club and any partners that sign up to really make the most of the fanbase they have got. The great thing about Newcastle is it's the heart and soul of the city and the community. There is only one club in Newcastle as opposed to two clubs in Manchester or Liverpool. The whole city follows it and is united behind it."
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