Kieran Maguire issues verdict on Newcastle renting Sunderland stadium during St James’ Park rebuild

Ever since the Saudi Public Investment Fund’s takeover of Newcastle in October 2021, the subject of expanding St James’ Park has been a hot topic among fans.

The 52,000-seater stadium has ben the Magpies home for over a century, albeit with several revamps in that time, most recently in 2,000.

As well as allowing more fans to see a team galvanised in recent years by Saudi money, a St James’ Park redevelopment could be a game-changer in terms of Profit and Sustainability Rules.

With infrastructure costs exempt from PSR, it would be a huge boost for the club if they could supercharge their annual matchday income of around £40m.

A new-look stadium would also come with myriad commercial benefits.

To explore what the future might look like at St James’ Park, TBR spoke exclusively to Liverpool University football finance lecturer and Price of Football Author Kieran Maguire.

Newcastle’s Adidas deal: £40m figure should be taken with pinch of salt

As part of their new kit manufacturing deal, Adidas branding will feature prominently at St James’ Park from 2024-25.

Aside from matchday income, brands want to associate themselves with elite venues, which would see Newcastle extract more cash from St James’ Park after an expansion.

However, finance expert and former Man City adviser Stefan Borson has suggested via X that the £40m figure quoted by many media outlets in relations to the Adidas-Newcastle deal is misleading.

And whether at a revamped St James’ Park or the current iteration, Maguire suggests that the value of the Adidas deal will still be contingent on results on the pitch.

“I think many analysts took the £40m Adidas deal with Newcastle with a degree of caution.

“That £40m is likely to be very much geared towards incentivisation.

“You need to deliver success on the pitch, with potential but not guaranteed bonuses included for things like European qualification.

“People are right to be a little bit sceptical about the number quoted by some sources. At £40m, that would be a huge boost from a kit manufacturing deal alone.

“The likes of Adidas and Nike very much have a tiered approach to their relationship with clubs.

“As far as Adidas are concerned, they have domestic and international focuses.

“The Man United deal is £900m over ten years, and that is thanks mainly to the international fanbase.

“Newcastle have a fantastic domestic fanbase, but they still have a lot of growth to achieve before they can expect to be at the elite level of the Adidas and Man United relationship.“

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How much is St James’ Park worth per season for Newcastle?

In its current form, Newcastle‘s St James’ Park is already one of the most lucrative stadiums in the Premier League outside the so-called Big Six.

The club have increased season ticket prices by five per cent over the summer, which will further bolster the Magpies’ matchday income.

But without European football next season, how much can Newcastle hope to earn from St James’ Park in 2024-25.

“Newcastle’s matchday income grew spectacularly from £27m to £37m between 2022 and 2023,” said Maguire.

“This is mainly on the back of the increased enthusiasm of fans for attending matches again.

“Under Mike Ashley, while seats were nominally filled, there were innovative deals in terms of matchday income that didn’t make a huge contribution towards the top line.

“The embracing of the new ownership by Newcastle fans means there is now a waiting list to see the team on matchday.

“As far as 2024-25 is concerned, the club had the benefits of an extra three European matches.

“That would have probably brought in another £2m each. But that won’t be the case in 2024-25.

“I would imagine that matchday income for 2024-25, taking into consideration the five per cent increase, which will be far higher for the hospitality packages, I think we’re looking at around £45m.

“That is clearly much higher than the vast majority of clubs in the Premier League.

“But with four clubs in Man United, Arsenal, Spurs and Liverpool potentially generating more than £100m in matchday income next season, there is a long way to go before Newcastle will be sitting at the top table.“

Newcastle stadium: Total rebuild or Liverpool-style expansion?

In a rare media appearance last week, Newcastle CEO Darren Eales revealed that Newcastle are still awaiting the results of a feasibility study with regards to expanding St James’ Park.

Both a total rebuild, either at a new site or on the existing footprint, and a more straightforward expansion have been mooted as possible options.

If Newcastle decide to remain on the iconic site of St James’ Park but knock down the stadium and build an entirely new one, the club would need to find somewhere to stage home games.

There are not many candidates for stand-in stadiums in the North East, with Sunderland‘s Stadium of Light the only option that would have adequate capacity.

That would be unthinkable, claims Maguire, who suggests that an approach similar to Liverpool’s redevelopment of Anfield might be more attractive.

“Newcastle effectively have two choices when it comes to the stadium.

“They could do something similar to what Liverpool have done at Anfield and have a modestly restricted capacity over one season.

“That will clearly have a negative impact on total matchday income but, if it is organised well, won’t be too detrimental over one, perhaps one-and-a-half seasons.

“The alternative is to build a stadium on a new footprint, which would allow the club to continue to play at St James’ Park.

“That would be a big change for the city of Newcastle given the prominent position the stadium has in the city itself.

“I’m sure Newcastle fans would want something that is easy to access, within walking distance and other transport means.

“We have seen Barcelona and Real Madrid prove that a complete rebuild can be possible.

“But trying to find alternatives is going to be a challenge, especially given that playing at Sunderland’s stadium would be unacceptable for the Newcastle fanbase.“

PIF can leverage other commercial opportunities to boost Newcastle brand

Beyond Tyneside, PIF are looking to push the Newcastle brand through their astonishing portfolio of media and sports assets.

They will do so at the 2034 World Cup, where recently released blueprints for new stadia could provide inspiration for a St James’ Park expansion.

One of their most recent acquisitions has been the right to host the inaugural edition of the Olympics Esports Games in 2025, where EA Sports FC will be played among other titles.

Maguire suggests that this is an avenue Newcastle’s commercial tsars may want to explore as they look to push the envelope through assets other than St James’ Park.

“Football teams are looking to expand their offerings and brand through esports.

“With Saudi Arabia hosting this event, there is a chance for Newcastle to extend their brand internationally.

“I think there is a commercial appeal for those who stream esports content, and Newcastle can benefit off the back of that.

“However, it is one of those markets where converting interest and views into hard cash has historically been very challenging.“