Naming Rights

If naming rights are so important, why has Jerry Jones of the Dallas Cowboys still not sold the naming rights to the Cowboy’s stadium? Darren Heitner, founder of Sports Agent Blog and a professor of sport agency management at Indiana University questions this as well. It got my curiosity up. In sponsorship marketing, we hear about naming rights all the time. They are the “holy grail” of sponsorship, we think. But as the Canadian Sponsorship Landscape Study notes, naming rights only account for 6% of Canadian sponsorships. But let’s come back to the question at hand. Why is the Cowboy’s stadium not named?

Last year, the Cowboys generated $500 million in total revenue, a show-stopping number for sports teams in the US. The team sustained operating income or earnings before interest, taxes, depreciation, and amortization of $227 million, or over $100 million more any other NFL team. It has greater operating income than either the NHL or the NBA. So, perhaps Mr. Jones doesn’t need the money? I am sure that, if the deal was right, he would monetize the naming rights, but Jerry Jones has yet to find the right deal. He values the brand equity he has in Cowboys Stadium and places a high price on that opportunity. Daily, he continues to build further brand exposure for his brand, versus that of a corporate brand associated with his stadium. Like others, the Cowboys have many other assets to sell. They can sell other sponsorships without having the focus on or “sell-out” of naming rights for big dollars.

I have always commented to our clients at the Partnership Group – Sponsorship Specialists™ that the “sum of the parts is greater than the whole.” No matter if it is a sports team or a small charity selling sponsorship, there is more money to be made in selling a series of other sponsorships around events, sub-properties, and experiences within the organization than selling the naming rights. But typically, selling properties want to sell the “big ticket” and focus on naming rights. The brands buying such opportunities are often not well versed in naming rights opportunities and make bad investments.

So, the next time you look at buying or selling a naming right, consider the worth of your brand and that of the brand with which you will associate. If you are the seller, will selling your naming rights diminish your brand value? If so, how much is that result worth? It is all part of the opportunity cost. If you are the buyer, do you need the naming rights to meet your goal or can you buy a less expensive asset within the organization and activate better? We work with clients on these scenarios every day. Some listen and learn. Others don’t!

These are just one person’s thoughts. Yours are welcomed as well. Please add your thoughts or comments below. Thank you for reading and your feedback.

Brent Barootes

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