Northern Rock's "good bank" is to renew its controversial sponsorship of Newcastle United from next season in a deal worth up to £10m over four years to the side, who are currently top of the Football League Championship.
The bank's links with the Tyneside club have proved highly controversial during its period of "temporary state ownership" because it has effectively meant that Newcastle are sponsored by British taxpayers.
However, the Northern Rock chief executive Gary Hoffman yesterday defended the latest deal, saying: "There has been a long-standing relationship between Northern Rock and the club which dates back to 2004, and it represents an important community link.
"Brand awareness and promotion are important elements in the continuing development of the company. However, 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." Mr Hoffman said Northern Rock was of the opinion that sponsoring Newcastle fulfilled both the criteria and therefore offered good value for money.
The chief executive is no stranger to high-profile sponsorships. He became chief executive of Barclaycard as the credit card business assumed sponsorship of the FA Premier League in 2001, taking over from Carling.
The full price of the Newcastle deal will be payable only if they manage to remain in the Premier League for the entire four years of sponsorship and could be worth as little as £1.5m if their performance on the pitch stumbles badly. However, Chris Hughton's team are currently in the middle of a 12-match unbeaten run and have been leading the Championship almost since the season began, leaving them odds on for a return to the top flight after just one season.
The sponsorship will pass to a new owner when the "good bank" is sold, expected to be sometime this year. The main contenders are Tesco, Virgin Bank and National Australia Bank.
Northern Rock has also maintained deals with the Newcastle Falcons rugby team and Newcastle Eagles basketball side since it was nationalised.Reuse content