Breaking News: N.Rock Effects On NUFC
By Tyne-Talk
February 21 2008
The government have sensationally lost a bid in the House of Lords to Nationalise Northern Rock on their terms has been stopped by a Tory led ammendment, backed by the Lib Dems, which will see accountability brought into line with other banks, with "Its directors' salaries and bonuses will be paid out of taxpayers' funds."
The bank became sponsors of Newcastle United FC in 2003 and hold a contract to remain the club sponsors until 2010 (extended in 2004 to go beyond 2005). They also have an extended deal as sponsors of Newcastle Falcons Rugby Union Club, which also expires in 2010 and a deal with Durham Cricket Club.
The Chief Executive Adam Applegarth holds a season ticket at St James's Park and the club is his biggest deal of the lot.
Nigel Currie from Brand Report said in 2007 of the sponsorship situation:
"It is quite an unusual situation.
There have been no shortage of pictures of Michael Owen mentioning that he is injured, as well as the Northern Crock phrase being bandied about. It could go against you as a brand.
Also, as a brand, you do want to keep as low a profile as possible at times, and the picture of Owen going off injured will not help.
It is probably a time when Northern Rock is looking to damp down things in terms of publicity, but it can't do that and it finds itself continuing to appear across the media.
But there is not a lot they can do, given the nature of the sponsorship. On the other hand, is not the end of the world for the clubs and they have been making supportive statements."
Newcastle United FC have expressed their support for the club in the past, with players wearing supportive words on their training kits.
Rrecent news suggest however, that they are quite happy with the deal as the majority of the money has already been paid to the club, in a deal former chairman Freddy Shepherd struck with the bank.
The original deal with the club was reportedly for approximately £25million, the clubs largest sponsorship deal on record. Shepherd is alleged to have requested the majority of that payment upfront rather than in installments which would normally be standard practice for any deal spanning a lengthy period of time, in this case 5 years.
Shepherd allegedly secured just short of £20million upfront, money which was used to sign Michael Owen soon after. This leaves just a shortfall of £5million should that remain outstanding.
When current chairman Chris Mort took over from Shepherd he was dismayed by the deal and was unhappy with the terms. However, in light of recent events it would seem that Shepherd worked a wonder in securing such a large amount, which could have potentially caused a problem this late in the day had it not have been paid.
At the time Shepherd said:
"We continue to see this as a long-term relationship as the Newcastle United brand is being enhanced both on and off the pitch."
Despite this, the time may have come from Newcastle United FC to break away from the nationalised bank, and it is understood that the board are to consult with Northern Rock to negotiate a release from the current deal.
