If Your Aim Is Just A Name, Stay Out Of The Game
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.
In 2013, 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.
“There is no grander stage than AT&T Stadium for us to showcase our technology and build on a best-in-class mobile interactive experience for our fans and for our customers,” Cathy Coughlin, senior executive vice president and global marketing officer for AT&T, said at the time.
The Cowboys' deal, handled under the auspices of majority team and venue owner Jerry Jones, was on-par with a pact that insurance firm MetLife signed in 2011 for 25-year naming rights to the stadium that is home to the NFL's New York Giants and Jets. Both are just below a deal valued at $400 million that Citigroup began in 2009 for 20-year naming rights to the new home of the New York Mets.
"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?"
Knapple, who joined Van Wagner in 2012, is a 25-year industry veteran in stadium naming rights, corporate consulting and sports business leadership. Dating back to 1989, he has been the principal on more than 15 major naming rights deals, including Target Center (Minneapolis), Staples Center (Los Angeles), Philips Arena (Atlanta), Emirates Stadium (London), Dolby Theatre (Hollywood), and MetLife Stadium (when he was with the Wasserman Media Group).
"The old business model was to come in and broker a deal to generate a naming rights transaction and be paid a commission for doing it," said Knapple. "The new business model is much more of a consulting platform. At Van Wagner Sports and Entertainment, my job is to harness the expertise we have, help the client, the venue or the team and think through how to drive revenue from your facility beyond just naming rights."
Knapple said he has witnessed a period where the number of professional teams that sought to have naming rights on their stadiums or venues went from less than 20% to more than 80% today.
"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.
"When I was with the Wasserman Media Group and we presented MetLife with the naming rights opportunity, it coincided with the stadium being awarded Super Bowl XLVIII," said Knapple. "So they have had a three-year period to ramp up and take advantage of the situation."
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."
Global financial firm Barclays is in the midst of a 20-year, $200 million naming rights deal for the arena that opened last year as home to the NBA's Brooklyn Nets. Barclays Center will co-host with Madison Square Garden the 2015 NBA All-Star Game and surrounding events, part of Barclays plan to work with the Nets to build and expand their global brand.
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."