Welsh Rugby lost £45m in the previous Principality Stadium deal

The Welsh Rugby Union lost £45 million by underselling the naming rights to the Principality Stadium, according to a new report.

A 10-year contract with insurance company Principality is expected to be completed this year, with the decade-long cost of sponsoring Wales’ biggest stadium reportedly at £1m per season.

Although research from The Sponsor was shared AM City this suggests the fair market value for the 73,000 capacity stadium is £5.5 million per season.

This means the organization would theoretically have lost £45 million over the last decade.

“Our research establishes the fair market value of stadium naming rights assets based on similar deals across Europe,” said Sponsor editor Sean Connell. “This provides a clear picture of the pure economic value of a venue like Principality Stadium.”

Pricing reflects the Welsh market versus, say, the London market. England Rugby’s naming rights deal for Twickenham, with Allianz, is reportedly worth £100m over 10 years.

Dublin’s Aviva Stadium is worth £2m a year below fair market value, the report says.

Principality Stadium Value

“In practice, naming rights sponsors usually come from the local business community, as they sponsor the stadium [like Principality Stadium] is one of the most effective ways for a brand to engage locally,” added Connell. “Stadiums outside of Europe’s capital cities and major financial centers often face fewer potential partners, making transactions with full market value more challenging.

“However, once a long-term naming rights agreement is signed, any pricing errors can be overcome. The consequence is that even some of Europe’s most famous stadiums have left behind huge value.”

The man who negotiated the previous Principality Stadium deal, Simon Rowe, said previously AM City that finding a new partner amidst the deteriorating state of Welsh rugby would be difficult.

“The renewal times are quite challenging for Welsh rugby with what they are going through, but nothing can take away from what a fantastic stadium it is,” he said in October.

“I am confident with the existing strengths in Welsh rugby that they will see good continuity – it makes sense to stay with partners who are already invested for the long term and build on what they have already done.”

The Principality Stadium will host three Six Nations matches over the next two months.