?or something like that: our Chief Executive has announced that the club is close to securing a ‘naming rights` deal for the stadium before the start of next season.
The club had given us all advance warning, and now we`re getting the next announcement: Chelsea are in the process of securing a ‘naming rights` deal for Stamford Bridge, and are confident that the deal will be in place before the start of next season.
It was Ron Gourlay, our Chief Executive, who broke the news at the International Football Arena Conference in Zurich. “We need to grow our income, which we are doing in Asia, and reduce our costs, principally players’ wages. Naming rights to Stamford Bridge will be a big step towards closing the gap,” he said. “Active conversations are going on with blue chip partners and I am confident we will have naming rights at Stamford Bridge within the next six to eight months. The aim is to have it in place before the start of next season.”
It`s a move that is unlikely to be very popular with the fans. Few of us will welcome it with open arms. But we might have to accept that it is a ‘necessary evil` if the club is to achieve financial sustainability. As we have pointed out many times, the club has to develop other sources of revenue other than Roman Abramovich`s largesse. This is not only for reasons of common sense (last year, Roman bankrolled a loss of £78 million, and that was one of Chelsea`s better seasons), but also because Chelsea need to meet UEFA`s financial fair play rules.
And with the blow of not securing 75% of CPO shares at last months meeting, Chelsea cannot progress with their major plan, that of moving to a larger stadium. Staying at Stamford Bridge, avenues to increase revenue remain limited: Chelsea already have very healthy sponsorship and kit supply deals (i.e. we cannot renegotiate these), and in TV rights, we are bound by collective deals in the Premier League. Chelsea already receive a very generous allocation of funds from UEFA for participating in the Champions League, there are few opportunities to increase this unless we actually win the competition.
So unless fans are prepared to countenance a substantial hike in ticket prices, naming rights is one of the few remaining areas for improving revenue. It could be a substantial deal, in the region of an additional £10 million per year for a club with Chelsea`s exposure. By way of comparison, of the top ten teams in European football, only Bayern Munich and Arsenal have such deals so the prospect of the 6th biggest club in the world being attributed such rights would, as Gourlay says, have blue chip partners falling over themselves for this opportunity. And that deal would help boost a substantial proportion of our revenue, which was some £210 million last year.
Of course, Chelsea also need to make progress on other fronts in order to break even, particularly in reducing our costs. Player wages proportional to revenue are some of the highest in the Premier League, and it will be necessary to trim our wage bill. Reducing our dependence on purchased players by developing our own players would also help, and UEFA rules on squad registration make clear that Chelsea will need to rely less on buying players.
However, naming rights is one of the few remaining means to increase revenue, and we will have to get used to the idea. And let`s look at the references: after a flurry of jokes about Arsenal`s Emirates stadium, few people are laughing at this any more. Germany`s biggest club, Bayern, play in the magnificent Allianz Arena, and several other Bundesliga teams play in named stadia. It is on the base of this stadium that Bayern have built their domination of the Bundesliga.
Of course, the football fan is an innately conservative animal and Chelsea fans (which Ron Gourlay also pointed out were older than the fans of any other Premier League club) are also not going to be pleased at this development. We should, however, wait to see who is the sponsor and have a modicum of faith in Chelsea not to present us with an Enron Arena. Such is the way of football, including at our own club, and whilst we might not like this, we might have to accept it. And let`s face it, Samsung Bridge is not so bad.
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