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"Since I was young, I always dreamed of playing at Old Trafford", or so said David Beckham (my preference would be Selhurst Park, but that is a different story). It seems unlikely, however, that a straw-poll of childhood dreams would include reference to playing football at 'SportsDirect.com @ StJames' Park Stadium' or golf at the equally uninspiring 'Waste Management Phoenix Open'. Whether the names roll off the tongue or not, the naming of a stadium or an event represents a potential windfall for sports clubs and organisations that is difficult to ignore.

It's all in the name
In the UK, the practice of attaching a corporate name to a stadium has, historically, been less well spread than elsewhere in the world, which is why attempts by Chelsea FC to attract a stadium partner and Newcastle United's shop window-esque policy of attaching the owner's corporate branding to St James' Park have not gone unnoticed in the press. That is not to say that this is a new issue in the UK - these stories are newsworthy because they are attempts to re-brand existing, iconic stadiums that have long been known by their former identities. Whether such a re-branding is actually possible is outside the scope of this article, however from the lawyer's perspective, the onus is on identifying the rights granted and the value ascribed to them, which raises its own unique challenges in the negotiation of an often complex suite of documentation.

The financial advantages are obvious. Arsenal's tie-up with Emirates is reportedly worth in the region of £100 million over a 15-year period. As Derek Llambias, Managing Director of Newcastle United said "[a naming right deal] would hope to generate in the region of £8 million to £10 million per year. That would give us another player"¹. The indirect benefits are potentially even bigger, with clubs opening up markets all over the world to which they had never previously been exposed, largely off the back of corporate branding.

A consequence of regulation?
The essence of these deals is the ability of the branding to resonate with those watching the game. To some, commercialisation is at odds with the core values of the sport and many are reluctant to embrace this. What is clear, however, is that effective commercialisation of a football club is a key element to success on the pitch. The FA introduced its 'Fit and Proper Persons' test² in 2004 as a means by which it could police the 'fitness' of those seeking to run a football club. The test focuses on previous dishonest acts with the underlying theme of ensuring that clubs are run 'properly'. In the modern era, it is hard to see how 'properly' does not include a rational and consolidated policy of maximising all available legitimate revenue streams, providing more cash to fund on-pitch success.

Perversely, 'safeguard' measures, such as retention of ground ownership by a fan-led organisation designed to protect the 'interests' of a club, may actually operate against this. Chelsea has found this out to its cost in failing to persuade the Chelsea Pitch Owners that a move away from Stamford Bridge is the only way to match on-pitch success with off-pitch ambition, and is now looking to find a way to repackage the deal to provide a more attractive alternative, with the end result still unclear. This all begs the interesting question of whether supporters groups are actually aware of the best interests of the club in the modern business marketplace - dangerous territory, but calls for greater responsibility in football club operation is likely to see an ever growing number of legitimate commercialisation deals designed to make the club operate as a viable and legally compliant business.

At which point we turn to the UEFA Financial Fair Play Regulations (FFPR). This journal has already assessed the impact of the FFPR³ and as yet, we have no data on how - or if - they will be enforced. It seems unlikely that a major football club will be ejected from a top flight UEFA competition for failing to balance its books within an artificially set monetary threshold, but the possibility remains. The Manchester City Etihad deal has brought this issue sharply into perspective and highlights the need to be able to accurately place a value on the rights granted to a sponsor. How far this goes, however, is still to be determined - proposals from across town have seen Manchester United explore whether there is a commercial value in the naming rights to its Carrington training complex. This seems a slightly arbitrary exercise, but given the iconic nature of Old Trafford, may be one of the only naming right options left available to the club.

Key considerations for the lawyer
Deals of this type are generally exclusive and both parties will need to be aware of how the rights granted fit with other club sponsors, often within a tiered system. As an example, Newcastle's current deal with Northern Rock expires in the near future⁴, giving an opportunity for a new investor to become both stadium and shirt sponsor - this is likely to create its own challenges to the draftsman in order to avoid pre-existing deals obstructing a potentially lucrative opportunity. The message remains simple - check what has been granted before and identify how the different agreements mesh together. Easy enough, but this presumes that the requisite paper trail exists - a reality that is often unfamiliar.

Various competitions also place their own rules on conflicting sponsorship deals. These can be dealt with via suitable carve-outs, however practical considerations should also be made - a naming rights deal will inevitably include a certain amount of physical stadium branding, which will need to be removed or altered for certain events. The UEFA Champions League, for example, brings with it awkward oversized pitch-side advertising hoardings (another compelling reason for Chelsea to move away from Stamford Bridge) that will temporarily replace some or all existing fixtures. This all needs to be borne in mind.

The leverage each party has will play its usual part, although a well-researched partner deal will look to match parties of similar standing. This becomes framed as a legal point when considering the type of exposure a particular brand association may bring. Demerit goods are obvious examples, but this may extend to unpopular financial institutions or similar.

Consider then, from a club perspective, the relationship between the sponsor and the football industry as a whole and identify whether this needs specific drafting to restrict what can be done by the sponsor - a reputation protecting sweep-up provision may be possible, however a sponsor will look to place quantifiable limits on this.

It is a balancing act - a club will want to be able to ride the crest of associated corporate success and the exposure it brings to untapped markets, but needs to maintain some flexibility to protect against the risk of a sponsor's financial meltdown. Likewise, a sponsor will want to ensure that the rights it obtains are clear and that it is able to benchmark investment return. Incentive payments may be made to encourage on-pitch success, but ultimately if onlookers are failing to register the existence of the naming deal, then a money-saving exit provision may be negotiable at the outset. This is especially relevant for stadiums that have an old established identity.

Conclusion: a necessary evil?
The majority of new stadiums are associated in some way with a corporate entity and it is unsurprising that clubs who cannot relocate or rebuild their grounds are investigating the opportunity to re-brand their existing premises. This makes sense from a business perspective, but does not sit well with the group that is arguably the most likely to benefit - the fans. The FA 'Fit and Proper Persons' test frames this issue perfectly: a club should be run 'properly', however this nebulous concept is vague in practice. It is hard to see how this should not include a maximisation of the commercial opportunities available to a club - an investor 'should', after all, be interested in just that. The FFPR also put this into context, although we have yet to see whether these will actually have an impact.

This is ultimately a question of viability. Some venues are sacrosanct and a re-branding could be perilous. Where a deal is identifiable, the task is then to craft a document which is sympathetic to the needs of the parties and which protects, as far as possible, their reputation: this is football after all and it remains a funny old game.

¹ 'Newcastle United managing director Derek Llambias defends decision to sell St James' Park's naming rights', Daily Telegraph 

²  FA Fit & Proper Persons Regulations

³  See World Sports Law Report Volume 9 Issue 8, August 2011, 'Financial Rules: UEFA FFPR 'related party' rules: Man City's Etihad deal'; Volume 9 Issue 3, March 2011, 'Financial Rules: UEFA FFPR Regulations: the grounds for legal challenge'; Volume 8 Issue 12, December 2010, 'Financial Rules: UEFA's Financial Fair Play Regulations: analysis' and page ? of this edition of World Sports Law Report.

⁴  See 'Virgin Money in talks to take over Newcastle United shirt sponsorship', Marketing Magazine