Welsh Rugby missed out on £45m in previous Principality Stadium deal
The Welsh Rugby Union lost £45m from underselling the naming rights to the Principality Stadium, according to a new report.
A 10-year deal with insurer Principality is expected to conclude this year, with the decade-long cost of sponsoring Wales’ biggest stadium widely reported to be £1m per season.
That’s despite research from The Sponsor shared with City PM that suggests the fair market value for the 73,000-capacity stadium being £5.5m per season.
It means the organisation would have theoretically missed out on £45m over the last decade.
“Our research sets out the fair market value of a stadium naming rights asset based on comparable deals across Europe,” Sponsor editor Sean Connell said. “That provides a clear view of what a venue like Principality Stadium is worth in pure economic terms.”
The pricing reflects a Welsh market versus, say, a London market. England Rugby’s naming rights deal for Twickenham, with Allianz, is reportedly worth £100m over 10 years.
Dublin’s Aviva Stadium is £2m per year below fair market value, the report says.
Principality Stadium value
“In practice, naming rights sponsors typically come from within the local business community, because sponsoring the stadium [like Principality Stadium] is one of the most effective ways for a brand to engage locally,” Connell added. “Stadiums outside Europe’s major capital and financial centres often face a smaller pool of potential partners, which can make transacting at full market value more challenging.
“Once a long-term naming rights agreement is signed, however, any mispricing is effectively locked in. The consequence is that even some of Europe’s most recognisable stadiums have already left substantial value on the table.”
The man who negotiated the previous Principality Stadium deal, Simon Rowe, previously told City PM that finding a new partner amid a worsening state of Welsh rugby would be difficult.
“The timing of the renewal is quite challenging for Welsh rugby with what they’re going through, but nothing will ever take away from how fantastic that stadium is,” he said in October.
“I would be confident for the powers that be in Welsh rugby that they will see a good extension – it would make sense to stay with a partner that’s already invested for the long term and building on what they’ve already done.”
The Principality Stadium will host three Six Nations matches over the next two months.