A leading business journalist believes that £25m Rangers retail partners Castore could “benefit hugely” from the takeover at Newcastle United.
Sport Business writer Matthew Glendinning has penned a piece this week regarding the now Manchester-based retailer and their role at St James Park following the Saudi-led takeover.
There were joyous scenes on Tyneside this week as the Magpies announced that a consortium led by Amanda Staveley, the Rueben brothers and the Saudi Public Investment Fund had purchased the club from the heavily criticised Mike Ashley.
The deal is said to be worth £305m with the PIF having a reported wealth of £320bn [Independent] – a number which would make Newcastle United the richest club in football.
Since then there’s been plenty of talk regarding who’ll be the club’s next manager – including some surrounding Steven Gerrard – and who the club will sign – including Rangers star Alfredo Morelos.
But Castore’s position as retailer is an especially interesting one given the fact that the Rangers kit partners have just signed a six-year deal with Newcastle.
Speaking after the deal, Glendinning muses over the ramifications of Newcastle signing up with Castore and – provided a takeover clause isn’t in the contract or isn’t activated – then he believes things could work out very well for the emerging sports retailer.
“The key to the brand’s next move may depend on whether there is a ‘change of owner’ clause in their contract,” reads an excerpt from Glendinning’s column.
“Such clauses allow the relevant party to annul the contract should the other party change ownership.
“Under the new ownership, with the financial means to upgrade the squad considerably, the deal could soon be worth many millions more than the reported £5m-per-season Castore is currently paying.
Rangers partners Castore unlikely to walk away from Newcastle United deal
“Change of owner clauses also allow brands to step away from an association with a new owner that might not be in their interest. But why would Castore exercise such a right?
“For a young sportswear firm, without the brand equity built up by Adidas or Nike, the value of sponsorship supply contracts equates closely to the actual value of the company.
“Walking away from the Newcastle deal on ethical reasons may represent too much of an economic opportunity lost. My hunch is Castore will benefit hugely from its existing contract.”
The Newcastle United takeover has certainly dominated the news over the last fortnight and Rangers – as explained – haven’t been too far away from links to the club.
However, for anyone worrying that Gerrard might be tempted with a move to St James Park, read about how one of the Gers boss’ former managers is now the frontrunner.