Newcastle confirms Wonga as ‘lead commercial sponsor’ for the next four years
As widely predicted, Wonga has been confirmed as Premier League club Newcastle United's lead commercial sponsor for the next four years.
Described in a club statement on Tuesday as a digital finance company, the high-interest, short-term loan firm has pledged to invest some UK£1.5 million in two club projects, its academy and the Newcastle United Foundation Enterprise Scheme, a project which helps to find 15 and 16-year-olds employment, as part of its deal.
Wonga will also sponsor the club's shirt from the start of next season, following Newcastle's confirmation last week that it was ending its sponsorship agreement with Virgin Money.
It is understood Wonga has purchased the naming rights to Newcastle's home stadium but will restore the venue's original name, St. James' Park. Since November last year the stadium has been known as the Sports Direct Arena, taking the name of club owner Mike Ashley's sports retail company.
Reports before the announcement indicated that Newcastle expected to earn around UK£8 million (US$12.8 million) a year from the sale of shirt sponsorship and stadium naming rights, but several media outlets in the UK now suggest that the Wonga deal is worth a total of UK£24 million (US$38.4 million).
"We are building a club that can regularly compete for top honours at the highest level," said Derek Llambias, Newcastle's managing director.
"As everyone knows, a strong commercial programme is vital to this goal and I am delighted to welcome Wonga into the fold as our lead commercial partner, alongside Puma and Sports Direct.
"Throughout our discussions Wonga's desire to help us invest in our young playing talent, the local community and new fan initiatives really impressed us and stood them apart from other candidates."
Errol Damelin, founder and chief executive of Wonga, which has been the subject of intense criticism and was described by one British MP as "financial predators" earlier this week, added of Newcastle: "It is one of the biggest and most important clubs in the UK by any measure and has a fantastic following around the world.
"We're also really excited about investing in future stars both on and off the field. The academy and the enterprise scheme gives us the opportunity to make a big difference."
Full financial figures were not revealed but Wonga is not new to British soccer. It already has partnerships in place with Championship club Blackpool and Scottish Premier League club Hearts.
Picture shows Newcastle owner Mike Ashley and managing director Derek Llambias.blog comments powered by Disqus
- Length of contract: 4 years
- Annualised value: US$9.6 million
- Overall value: US$38.4 million