By Paul Nicholson
December 2 – Manchester United are missing out on an estimated £16.93 million a year for stadium naming rights, according to analysis by American Appraisal, a specialist valuation firm and consultancy. The English Premier League champions, who have said they will never rebrand Old Trafford, come second in a list of Premier League stadium rights valuations – to near neighbour Manchester City who are valued at £18.23 million.
The reason for the lower valuation is that there is a risk attached to rebranding an iconic stadium, with opposition from supporters the biggest concern, and the impact that could have on other revenues if a fan campaign turned aggressively against the club ownership.
In contrast, Manchester City valuation is driven upwards by the size of its Etihad Airways sponsorship package. But there is some scepticism around the true value as the deal has been criticised for being artificially inflated to allow the club more spending power get around UEFA’s Financial Fair Play (FFP) regulations. FFP stipulates that clubs can’t spend more than they earn.
The valuations again show the power of success. Even Manchester United’s adjusted stadium naming rights evaluation is greater than the combined valuation of clubs ranked sixth to 20th – a list that includes Chelsea.
Manchester United have however sold rights to Aon to sponsor its training ground and training kit – at a value higher than most clubs in the bottom half of the valuation table would get for their naming rights.
Even within the top six clubs there is a near £10 million between Manchester City at the top and third ranked Arsenal.
American Appraisal valuations show the top six Premier League sides (by average points over the past five years) holding all top six position within the naming rights ranking. Combined they have a potential income of £59 million from stadium sponsorship – about 80% of the entire Premier League naming rights market.
The bottom eight clubs are reckoned to have naming rights value of less than a million with bottom placed Cardiff only being worth £280,000. However, American Appraisals says you can expect these values to grow as these clubs establish themselves in the Premier League and work themselves out of pre-existing shirt sponsorship contracts with higher value deals for 2014.
Mike Weaver managing director of American Appraisal, said: “The real opportunity is for those clubs who have not made the leap of faith to re-name their stadiums. There is untapped revenue and when it comes to negotiating shirt sponsorship, stadium naming rights has to be a strong consideration too. The UK stadium naming rights market is still in its infancy versus shirt sponsorship.”
Perhaps the biggest, and potentially most contentious deal that could come to market is for West ham when it moves to the Olympic Stadium in 2016/2017. As a new stadium the rights would be significantly higher than the current £600,000 valuation for the Boleyn Ground.
Currently, as part of the Olympic legacy, the park will continue to be known as the Queen Elizabeth Olympic Park but the Olympic Park Legacy Company has begun a formal process to appoint sponsors for the Olympic stadium, the Aquatics Centre and the Multi-Use Arena.
