‘The more we have, the more we can spend on the pitch’
NEWCASTLE United CCO Peter Silverstone is confident the club’s ability to build the team “on the pitch” will work hand in hand with the retail operation unfolding impressively around it.
Silverstone, pictured, was a shrewd signing by the club’s Saudi backers after leaving Arsenal to become the Magpies’ commercial supremo. The Scotsman has spearheaded the club’s off-field rebuild after inheriting a Newcastle commercial set-up with a low-budget Castore deal, compared to the new £40million a season Adidas contract, and an operation that was failing to make the most of the potential at St James’ Park.
Newcastle are trying to close the gap between last year’s £250m revenue and that of Man City, who posted a £700m fortune last time out.
Speaking at the launch of the club’s new Stack-style club shop, Silverstone underlined the importance of getting Adidas back on board after a 14-year absence and how vital maximising revenue is in order to boost Eddie Howe’s transfer kitty. The Castore deal was worth a paltry £5m a year while former sponsors Fun 88 brought in a drop in the ocean compared to the £25million a year bonanza.
United will now bring their club shop operation back in-house after previous owner Mike Ashley had left Castore to run the show, a decision that hit income and produced mixed results in terms of customer satisfaction.
Silverstone said: “If you look at retail and commercial revenues separately, then it’s pretty easy to increase your retail revenues when you don’t have any (referring to life shortly after the takeover).
“That’s the starting point, really. Bring retail in-house, and build a product range with Adidas, and outside of Adidas, that reflects the demands of your fans.
“Bring in product that they can buy, and then build retail revenues from there. We’ve already discussed bringing everything inhouse – we will now build our own retail business.
“Retail is not just Adidas and kits of course, it’s caps, bags, calendars, board games, golf products – whatever the fan is willing to buy, we’ll try to find for them.
“Then, you’ve got commercial revenue.
Clearly, building sponsorship income is vitally important. Revenue, in general, is vitally important given the European and Premier League rules. The more we have, the more we can spend on the pitch, which is what every football club wants to do.
“Building those commercial revenues is really important, and having the right group of commercial partners is important too, partners who are going to build you revenue.” Newcastle have deals like Noon. com and Inpost helping to boost the coffers and as Silverstone showed reporters the club’s exciting plans, stars like Bruno Guimaraes, Tino Livramento, Nick Pope and Lewis Hall, along with club ambassador Rob Lee, were involved in a filming shoot at St James’ Park. Silverstone is enthusiastic about the future and said: “We’re on track to bring those partners in, and it’s partners that are going to help you build your brand. That’s what Sela have been doing with us, with ‘Unsilence the Crowd’ and the drone show.
“Saudia (airline) are able to launch an incredible activation within the city, which you’ve seen a glimpse of, with the Formula E collaboration.” Barely a stone has been left unturned since Silverstone arrived on the commercial scene and expanded the department at St James’ Park. Adidas shoots involving Callum Wilson, Bruno, Joelinton and Anthony Gordon have been spotted this season and Sam Fender is also prominent in the marketing of the new kits.
But Silverstone suggested there is more to come: “I don’t need to tell you that Adidas have some pretty extraordinary launch plans for us, which will put us on a global marketing platform, which is fantastic. The bigger we build our brand, and the more profile and activation we do, the more other partners want to partner with us.
“Most importantly, the more we do globally to build our brand, the more people want to be associated with us and follow and support our team.”
Newcastle are set to be named as one of Adidas’ elite clubs and about to join a list that includes Arsenal, Manchester United, Bayern Munich, Real Madrid, Juventus and Flamengo.
The global reach is vital in the view of Silverstone: “Unlike people who are born in Newcastle, who I would hope will always be Newcastle fans, if you’re born in New York or Riyadh or Beijing or Shanghai, then you don’t have a local connection.
“You follow a club that you relate to, whether that’s the colours of the strip, players, activations like ‘Unsilence the Crowd,’ what the city means to you – a whole host of things.
“It’s really important we grow that global audience and relevance, to then bring in increased commercial revenue.”
NEWCASTLE UNITED CCO Peter Silverstone has underlined the importance of the Magpies maintaining their tag of European competitors.
Despite slipping out of the top four and into the so-called lesser European competitions, both the Europa League and Europa Conference League are seen as moneyspinners for the club.
A prize pot of around £20m is up for grabs in the Europa League and the Conference League yields around £13m, all of which can improve FFP hopes and enhance spending power on the pitch.
But that is without taking into account the cash on offer for gate receipts, Thursday night club shop visits, fan zone revenue and the overall prestige of a European place.
Silverstone also pointed to the fact that both Chelsea and Man United head into the final straight just as eager to make what was once deemed something of a consolation prize after the Champions League.
Silverstone told The Journal: “From a commercial perspective, just keeping the club at that European level is really important. It makes a big difference in terms of marketing and sponsorship deals when you can keep talking about us as a European side.
“From a retail business perspective, the more matches you have in your stadium, the more people are coming there and the more opportunities they have to spend. You can launch new ranges around European matches.
“Our ambition remains to be in European football next season, but recognising that there’s many clubs that also have the same ambitions as that.”
Newcastle will have to park their Champions League dreams for a season at least. But qualification for the Europa League not only offers another chance of a trophy, but also a place in the next edition of the Champions League.
The CCO said: “There’s lots of different elements. It’s not just about the club, it’s about the city as a whole. We’ve had great feedback from the city from our recent pursuits in Europe, in the Champions League, bringing Paris, Dortmund and Milan here.
“It was great for the city and the tourism and trade in the area. Taking Newcastle fans outside of the city was probably even better for those cities that we visited because we had a great time.”
This week the club started work fitting a temporary club shop on Strawberry Place with the Adidas stock set to arrive on June 7. When Adidas came on to the scene in 1995, Les Ferdinand was unveiled as the marquee signing that summer.
Silverstone can’t quite promise a summer signing like that, but he admits that signing popular stars goes hand in hand with kit sales.
Silverstone said: “We’ve got top, top players at this football club, and that matters when you’re doing a deal like this. It goes hand in hand. If you take something like a kit deal, then we know signings drive kit sales at times. That’s one part of it all.
“The product off the pitch – so the quality of the designs and the manufacturing – has to be right, and then on the pitch, the better things are going, the easier it is to generate growth.
“Obviously, we’re having an incredible season, and with three games to go, we’ve got a lot to play for. The team performing at the best level possible definitely makes a difference to every other aspect of the club.”