For those who have not seen the deal on the official site, the announcement can be viewed here.
As well as the naming rights, there is confirmation that a new fan zone will be opened in land close to the main stand and the Tilton stand before the end of this season.
This is designed to be the first step towards creating a “Sports Quarter” in the city, creating a globally recognisable space for sporting and entertainment.
As you can imagine, there is a lot to take in from this announcement, and I suspect we’ll be hearing further information on this news over the coming weeks and months.
However, I think that it’s important to look at the nitty gritty of the deal and understand just how big this is for the club.
Unlike previous incumbents, Knighthead have been very open with the figures behind the commercial transaction.
Those figures can be viewed in this document.
As well as confirming a donation of £100,000 a year to the Birmingham City Foundation, the deal will raise up to £6,241,667 before the end of this season and then potentially £9.45M in season two and £9.725 in season three.
As yet this deal is only in place until the end of the 2025/26 season, but this is no doubt due to technicalities regarding the connection the club still has to the stock exchange of Hong Kong and their rules on related transactions.
ZO Future Group (formerly BSHL) have announced the details to the HKSE here.
Once that connection is severed I have no doubt that this deal will be extended for a much more prolonged period.
The structure of the deal is interesting, and no doubt has been worked to help get around the restrictions of “fair market value” imposed by the EFL on deals of this nature.
There is a flat sponsorship fee of £5.5M per annum, which is pro-rated to £2,291,666.67 in the first season as we’re already just over half way through the financial year.
This sponsorship increases to £5.775M in year three.
There is also a club related performance bonus, which pays out an extra £50,000 per position in the table above the current position Blues lie in (20th).
This means up to £950,000 extra can be paid if Blues win the Championship.
Finally, there is a social media bonus based on verified impressions the club make on social media channels. For every 20m impressions, the club receives £100k up to a maximum of £3M.
According to a Tom Wagner interview in the Athletic, the Tom Brady news at the start of the season generated “17bn positive social media impressions”.
One would have to think that a similar size piece of news this eyar would be enough to bring home all the money in one fell swoop.
If one takes into account that Blues have current revenues of about £20M – £25M per season, the flat rate of sponsorship this year alone should push that up by around 10%.
That will make a serious dent into any issues with Financial Fair Play – and more importantly will help ensure Blues have a much bigger pot to play with in the coming seasons.
There have been promises from people behind the scenes for some time that this summer is going to be huge and it’s hard not to be excited by that.
The whole deal is very remiscient of the campus model that Manchester City have created and as someone who is a big fan of what they have done, I’m excited to see if that can be replicated in Birmingham.
Indeed, this is the kind of deal that could and should take us to the next level.
The future is very, very bright.