Newcastle United have announced a lucrative commercial deal which, interestingly, is part of a wider strategy within the Premier League.
The Toon Army have become unusually acquainted with the club’s sponsorship dealings in recent years for a Premier League fanbase.
Why? Because commercial revenue is absolutely central to the club’s long-term strategy to unlock the endless wealth of the Saudi Public Investment Fund.
Unlike matchday income and TV cash, there are very few barriers to accelerating commercial revenue – and that could be crucial,with every extra penny earned going straight Eddie Howe’s budget.
We’ve already seen this during PIF’s three years at St James’ Park, with the income stream jumping from £21m in 2020-21 to £47m in 2022-23.
That figure will rise again when they release their 2023-24 accounts, and again when they post their figures for 2024-25.
That is thanks in large part to new deals with kit manufacturer Adidas and front-of-shirt sponsor Sela, as well as the circa £10m they received from their bespoke Amazon documentary.
But the club have 13 commercial partners in total. And the latest update to that list is indicative of a wider trend within the Premier League.
Tottenham and Wolves join Newcastle in sponsor network
Newcastle partnered with betting brand BetMGM last season.
After what Newcastle’s chief commercial officer Peter Silverston said was “an exceptional first year together,” the pair have now renewed and strengthened their contract.
The new deal will see the brand get enhanced signage at St James’ Park and allow them to sponsor content and experiences.
Significantly, BetMGM have also announced deals with both Tottenham, who have made them their primary training kit sponsor, and Wolves, who will now call BetMGM their betting partner.
It is estimated that BetMGM are spending north of £120m per year on marketing at present, with a current push to cement themselves in the UK market.
The fact that this latest Newcastle deal is one of three in their Premier League sponsorship strategy suggests that they are not going down with their UK campaign any time soon.
And with no length given for the Newcastle-BetMGM, that bodes well for the club when the deal is up fore renegotiation.
- READ MORE NEWCASTLE FINANCE NEWS: Liverpool and Newcastle owners in talks with £100m off-pitch deal already agreed
How much can Newcastle earn from commercial sources? How will this affect PSR?
Newcastle’s new deal with Adidas is believed to be worth somewhere in the region of £30m per year, while front-of-shirt sponsor Sela pay £25m per year.
Both of those deals represent enormous and unprecedented upswings on their previous arrangements in both categories, with Castore and Fun88 respectively.
Theoretically, there is no upper limit to Newcastle’s commercial ambitions. However, every deal does need to pass the Premier League’s fair market value test.
Regardless, commercial revenue will go past £80m in 2024-25, potentially by quite a margin.
And that will be a record for a club outside the so-called ‘Big Six’.
While the gap between that elite group and the rest has been huge in recent years, Newcastle are intent on closing it.
