Northern Rock continues £10m sponsorship of Newcastle United

Jan 19 2010 Huddersfield Daily Examiner

NATIONALISED lender Northern Rock said it would continue to sponsor Newcastle United Football Club after signing another four-year deal.

The contract, which valued at between £1.5m and a potential £10m, will see the bank remain the main sponsor of the Championship team following a long-standing relationship dating back to 2004.

Newcastle-based Northern Rock said it believed the sponsorship contract fitted in with its responsibilities under Government ownership.

Gary Hoffman, bank chief executive, said: “We remain mindful of our responsibilities under Government ownership and only consider those advertising and promotion channels that deliver a high return on investment and good strategic fit.

“We believe that the sponsorship deal with Newcastle United provides both of these.”

Northern Rock – the “good”' part of the bank that was spun off from its more toxic loans at the start of the year – said it will only pay out the maximum £10m if Newcastle is playing in the Premier League for the full four years.

The contract, which begins at the start of next season, is also subject to review after two years, added the bank.

Newcastle United is currently top of the Championship and is on course for promotion amid a recent turnaround in fortunes. The club is owned by Mike Ashley, who heads the Sports World retail empire Sports Direct International.

Northern Rock said its relationship with Newcastle United “represents an important community link”. Said Mr Hoffman: “Brand awareness and promotion are important elements in the continuing development of the company.

“The new contract will help keep the Northern Rock brand in the public eye and reinforce our strong roots in the north-east region, a community we are immensely proud to support.”

Northern Rock was taken into public ownership in 2008 after its credit crunch woes sparked the first run on a UK bank in more than a century.

The group was split in two on January 1, with the “good” bank hived off, comprising about £19bn in savings and £10bn of mortgages.

It is set to be put up for sale into the private sector, while the so-called “bad” bank is expected to remain in public ownership.

UK Financial Investments said the decision to renew the sponsorship,was an “operational issue” for the bank.