When a Naming Right is Just A Name

There has been lots of activity around sponsorship naming rights and sports marketing in the past twelve months or so. John Vidalin and his team at the San Francisco 49ers were able to secure LEVIS for the naming of their new stadium in Santa Clara. The Ottawa Senators changed from Scotiabank to Canadian Tire on their building. The Saskatchewan Roughriders are building a new stadium that will need a name, Tim Horton’s teamed up with the Hamilton Tiger Cats on their building and much more at those big levels. Then there are all the local and smaller municipal and charitable organization naming rights, buildings to events now get corporate names.

I was working with several clients recently (on both the brand buying side and the selling property side) in regards to naming rights. One of the points that I tried to drive home in all the discussions was that there needs to be a purpose to the naming right! Just throwing a corporate name on a building or event is not necessarily wise. You need to do the due diligence. That is when I remembered an article an old boss of mine had sent me on naming rights. (Just so you know he is old as in “a long time ago” but also he is old, like in age too. But we will let him defend himself on that one.)

The article was written by Barry Janoff at NYSportsJournalism.com. I shared these thoughts with my clients but thought I would share them with you as well. Here is what Barry enlightened us all with: 

In 1927, the Chicago Cubs home stadium, which had gone under other names since it opened in 1914, took on the name of team owner and chewing gum giant William Wrigley Jr. No naming rights fees as we know them today were applied. In 2013, Wrigley Field, which cost about $250,000 to build in 1914 (about $6 million when converted to current dollars), could attract a naming rights deal in the neighborhood of $15-$20 million annually, according to industry analysts, should the current team owners, the Ricketts family, decide to pursue one. At last report, they said no such deal would be considered. 

This year, AT&T struck a deal to pay upward of $19 million annually for 20-year naming rights to Cowboys Stadium, the $1.3 billion venue that has been home to the NFL’s Dallas Cowboys since 2009. The deal added about $100 million to the value of the franchise, a not insignificant amount even though the Cowboys rank No. 1 among all NFL teams at $2.1 billion, according to Forbes magazine. 

“The deal that MetLife signed for the Giants and Jets Stadium and that AT&T signed for naming rights to the Dallas Cowboys Stadium are the business models to follow,” said Jeff Knapple, president and CEO for sports marketing and media sales company Van Wagner Sports and Entertainment, a division of New York-based Van Wagner Communications. “When you spend that much money, you are going to get a tremendous amount of awareness. [But] you’re going to need to think through the best strategies to exploit the opportunity. Why else would you spend your money there?”

“A lot of companies did it simply for the awareness. Some have come and gone, especially if you recall the dot-com boom and bust,” he said. “The transactions in which I have been involved, because of my background and thought process, is to fully activate, monetize and extract benefits from the opportunity that comes with a naming rights deal. That is a significant communication for the brand.”

MetLife Stadium will host Super Bowl XLVIII this February, which industry analysts say could be the most-watched Super Bowl in NFL history. Meaning that a U.S. audience alone could top 115 million viewers. 

Levi Strauss beat out 31 other companies for naming rights to the San Francisco 49ers’ new stadium, now under construction and scheduled to open for the 2014 season. Levi’s is paying about $11 million annually for a 20-year deal for the venue, which has been selected by the NFL to host Super Bowl L in 2016. 

“Imagine bringing some of our biggest partners to a seat on the 50-yard line to a 49ers game at Levi’s Stadium,” James Curleigh, president of the Levi’s brand, said when the naming rights deal was unveiled. “It’s a big-league deal with a big-league company.”

Not all naming rights deals hit the $15-$20 million annual stratosphere. Naming rights to the stadium being built in Minneapolis for the Vikings, scheduled to open for the 2016 NFL season, are expected to top out at $10 million annually. Gillette is paying about $8 million a year for the home stadium of the New England Patriots. Lucas Oil is paying about $6 million a year for naming rights to the Indianapolis Colts home venue, which hosted Super Bowl XLVI in 2012 and is the running to host Super Bowl LII in 2018.

“You don’t want to spend a lot of money and then have your message get lost,” said Knapple. “Having said that, MetLife Stadium is arguably one of the most unique facilities in the country, hosting two NFL teams and being in the media capital of the world. But if you are in another city it is far more challenging. Especially if you want to get your message across and make your strategy work for the long-term and not just for the two weeks or so when the Super Bowl comes to town.”