Newspaper article The Journal (Newcastle, England)

Corporate Blow Threatens Newcastle; Relegation Signals Start of Cutbacks

Newspaper article The Journal (Newcastle, England)

Corporate Blow Threatens Newcastle; Relegation Signals Start of Cutbacks

Article excerpt

Byline: Dan Warburton

THE region's top companies will pull the plug on their corporate hospitality at St James's Park in the wake of the club's devastating relegation, it was claimed last night.

However, experts made mixed forecasts following Newcastle's plight, with some claiming their demotion could see the club's corporate hospitality revenue plummet by as much as 75%.

The Journal can today reveal that a number of big companies are contemplating cutting ties with the club because of the relegation and the current economic crisis.

And with Alan Shearer appearing to be the primary draw capable of galvanizing local businesses, it further underlines the importance signing him up as the club's permanent manager.

One company spokesman, who did not want to be named, said: "We were considering our position prior to the club's demotion. Because times are tough, these are the things we need to take into account.

"I do genuinely think our decision to withdraw from the corporate hospitality would have been made regardless of the relegation, but it has played a part.

"It's not entirely because they are now in the Championship, but because they also because of the current economic climate." When Birmingham City FC relinquished their Premier League status in 2008, firms and corporate sports hospitality companies were hit hard.

Alan George, a director at the Birmingham-based Gala Events, said the club's failure caused bookings to fall and the cost of corporate suites to bottom-out.

He said: "There is a massive difference when clubs drop out of the Premiership.

There is a 50% to 75% difference in the cost of a corporate box between the Championship and the Premiership. That affects the club's revenue and the money they earn." But Leeds United's collapse in 2004, which saw them relegated from the Premiership, is said to have left hospitality businesses largely unaffected.

Joe Grindrod, the senior sports consultant from Leeds-based TD Sport and Travel, said: "I don't thing things were necessarily affected by the relegation. …

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