The Value Of A Brand - The Value Of A Team Name
One of the most storied sports teams in history, the Washington Redskins, find themselves stuck on defense in a public debate of their brand name The legendary success of the franchise is rooted in the community, a primary reason Mr. Snyder paid $800 million for the team in 1999.
Can you imagine members of Congress calling you to change your business’s name? That’s serious stuff. Well, that happened this past May when 10 members of Congress sent a letter to Washington Redskins owner Dan Snyder, as well as the other NFL team owners and NFL Commissioner Roger Goodell, asking for the Redskins name to be changed. The domino effect was that by August, numerous media outlets, including Sports Illustrated’s Peter King, Slate, The New Republic and more, started collectively refusing to refer to the Washington Redskins by their official name, instead referring to them as simply “Washington,” “the football team in D.C.” or something similar. This September, the Oneida Tribe in New York began buying radio ads on game days in Washington, as well as other NFL cities when the Redskins were in town, to promote changing the name.
Conversely, Redskins fans can’t get enough of their Redskins. In June, a poll conducted by the Washington Post found that two-thirds of Washington-area fans were against the name change. Additionally, a national poll conducted in May by the Associated Press-GfK showed that four in five Americans don’t think the Redskins name should change.
If we could only vote on these issues the American way…
But, I’m not here to take a position on that debate. However, I would like to add some depth to the high-risk – high-cost decision of changing a brand name.
The price tag is quite hefty for a team’s name change. In 2001, when they relocated from Vancouver, the NBA’s Memphis Grizzlies spent $125,000 on research alone to aid in their decision to make a potential name change. The team being new to Memphis, and the city’s only pro franchise, benefited from unusual levels of support. While they had a clean slate, Memphis ultimately opted to keep the “Grizzlies” nickname. Why? The name had already established national and international brand equity with NBA fans.
Similarly, the Charlotte Bobcats had difficulty establishing their new brand in an already established NBA market. Recently, the team announced a switch back to the Hornets, after the New Orleans team changed their name to the Pelicans. Charlotte’s switching cost is estimated to be $4 million, an investment seen as a better ROI amongst Charlotte fans who are still associated with the original name.
What will a Redskins name change mean? It was estimated by Landor Associates (who previously rebranded Federal Express and created the most recent iteration of the NFL’s shield) that while changing the Redskins logo and branding itself may only run up to $1.5 million, the costs of implementing it could be as high as $15 million.
Direct cost of brand change still might not be the Redskins’ biggest consideration. According to Forbes, the Redskins are valued at a staggering $1.7 billion, third in the NFL only behind the Dallas Cowboys and the New England Patriots. The valuation is obviously based on several factors including local community economic impact and national/international fan base. And, in the NFL, a league which attracts $9 billion annually, the teams all share revenue, so if one team was to dramatically change in value, the effect could be felt across the entire league.
In, perhaps, the most relevant study for brand change in sports based on public pressure, Emory University’s sports marketing department examined college teams with Native American mascots who changed their name – the University of Illinois and St. John’s – and found a trend that showed teams were negatively affected, on average, up to two years before experiencing positive financial returns.
Sponsor consideration is also crucial in the decision making, due to the importance of their marketing investments that help support team operations and growth. The Redskins have one of the biggest and best sponsors in all of sports in FedEx, who title the stadium of the Redskins. This past February, FedEx supported the Washington Redskins in a statement, saying that they felt their sponsorship was still in “the best interest of FedEx,” according to a Washington Post article.
Ultimately, resolution of the public debate is a decision not in the hands of most of the people involved. Regardless of the NFL or ownership’s position, we know that every brand name comes with a value, and in the Redskins case – a great deal of value. Changing this brand has a number of direct and indirect serious risks that should not be overlooked.