Newcastle United have struck a deal that will enrage former owner Mike Ashley.
Things could hardly have changed more at St James’ Park since high street billionaire Ashley sold to the Saudi Public Investment Fund in October 2021.
Their 4th-place finish in PIF’s full season at the helm was better than any campaign in Ashley’s 14 year reign.
And while the drop to 7th in 2023-24 was not ideal, the club are continuing to progress in terms of their squad, infrastructure and off-pitch operations.
Central to their plan to spend big under PIF is increasing commercial revenue, which is necessary because of the Premier League’s Profit and Sustainability Rules.
The front-of-shirt and sleeve sponsor deals with Sela and Noon respectively have boosted the coffers significantly.
But perhaps best of all is the new partnership with Adidas which, at a reported £35m per season, represents a 500 per cent increase on their previous kit deal with Castore.
And the latest developments with regards to that deal just might put a smile on the face of the Newcastle supporters who were so glad to see the back of Ashley.
Newcastle kit exclusivity deal to cost Ashley nearly £2m
Newcastle announced on Tuesday that they had signed an exclusivity deal with JD Sports, who will now become their official retail partner.
The club’s kit for 2024-25 onwards will be sold exclusivity at the sports fashion outlet as part of the deal, which has been given the green light by Adidas.
The deal has been in the post for a while now, much to the consternation of Ashley, who owns rival company Sports Direct.
As relayed by The Independent in May, Ashley’s representatives argued at the Court of Appeal that the exclusive deal violated anti-competition law.
Sports Direct had ordered £1.5m of kit from Newcastle but that purchase has now been blocked after Ashley failed to get a positive verdict.
Given the profit margin the 59-year-old would hoped to have secured, Sports Direct’s total would easily have reached well beyond £2m.
Ashley was public enemy number one on Tyneside, especially towards the end of his premiership, so the news will likely be welcomed by Newcastle fans.
Ashley was public enemy number one on Tyneside, especially towards the end of his premiership, so the news will likely be welcomed by Newcastle fans.
Newcastle commercial operation has come a long way post-Ashley
Newcastle’s annual commercial income at the last count was £228m, up from £152m in the final year of Ashley’s stewardship.
That figure will rise again when they release their accounts for 2023-24 because of a series of new sponsorship deals and the knock-on effects of Champions League participation.
And the rocket boosters will be truly switched on when the 2024-25 figures are available thanks to their huge new deal with Adidas, which is a record for a club outside the so-called Big Six.
Critics will point out that many of their new arrangements have been struck with companies who are funded by PIF.
But every deal has passed the Premier League‘s Fair Market Value assessment, which, as evidenced in the drama involving fellow state-backed club Man City at present, is not especially lenient.