The real reason Newcastle United are jetting out to Japan as £40m incentive laid bare

Newcastle United have a money-spinning reason for visiting Japan on this summer’s pre-season tour.

The Magpies will fly out to Japan at the end of July for friendly matches against Urawa Red Diamonds and Yokohama F.Marinos as they prepare for 2024-25.

In doing so, they follow in the footsteps of Man City, Paris Saint Germain and Inter Milan, who have all toured the country in recent years.

Tottenham meanwhile, whose emphasis on commercial revenue mirrors Newcastle’s own, will also visit the east-Asian country this summer.

But as well as the riches on offer from tour sponsors, match promoters and local commercial deals, Newcastle have piled their chips on Japan for one specific financial reason.

Newcastle United target key Adidas market in Japan

It is no understatement to say that the signing Newcastle supporters are most excited about this summer might just be their partnership with Adidas.

The £30m-a-year deal is a record for a club outside the so-called Big Six and the release of the club’s new Adidas-made home kit for 2024-25 has gone down a storm with the Toon Army.

And, according toiNews’s Mark Douglas, the partnership played a central role in the club’s decision to visit Japan over the summer.

It has been reported that Japan’s status as a primary market for the German sportswear giants made it an attractive destination for Newcastle.

Over 10 per cent of Adidas’s revenue comes from the Asia-Pacific region, according to most analysis.

Newcastle are receiving a £30m base fee from Adidas but the total value is expected to reach £40m with kit sales and other incentives factored in.

And with the Magpies likely to bank somewhere between five and 10 per cent from each unit sold, it’s easy to see why they arelooking to Japan to boost the cash they can make from the Adidas deal.

Newcastle’s Adidas: The secret to unlocking PIF’s riches?

Commercial revenue is absolutely key for Newcastle in accessing the near-endless resources of the Saudi Public Investment Fund under the terms of Profit and Sustainability Rules.

Under both the Premier League and UEFA’s systems, the amount clubs can spend is tied to their revenue.

That has led aspirational clubs like Newcastle and Aston Villa into something of a commercial arms race.

Unlike matchday income and TV revenue, which can increase over the long term but are largely static, sponsorship and merchandise revenue has no upper limit in theory.

The Adidas alliance is the most significant off-pitch deal in the PIF era and effectively adds £25m to their annual playing budget every year given that the previous partnership with Castore was worth just £6m.

Newcastle are still flirting with the upper limit of the Premier League’s spending rules, but the importance of the Adidas deal can’t be overstated.