Levi's’ $220 million naming rights deal with the new San Francisco 49ers stadium in Santa Clara, opening in 2014, is a bold move for the brand.
Traditionally, naming rights sponsors include banks, insurers and telcos, or products endemic to the game experience, such as beer or soft drinks. But the entry of this apparel brand into the mix has turned a lot of heads.
So, what are the driving factors behind naming rights deals?
1) Community relations—a large percentage are PR-driven to support their "hometown" teams.
2) Client relations—why take clients out for a nice dinner when you can host them in a suite at the venue that has your company’s name on the marquee?
3) Media impressions—they are grounded in the value generated by having your brand front and center. The association (and caliber of the facility and its tenants) helps define the qualitative part of the equation.
4) The “story”—traditionally the most underutilized element. How many sponsors actually leverage their platform to tell the brand story above and beyond mere association?
It's been widely reported that the Levi's brand was founded in the Bay Area during the Gold Rush and became the de facto outfitter of the original 49ers. There's a lot of connective tissue between the two brands, from their colors, hometown, history, and what each stands for in the minds and hearts of the residents.
In many cases, a team takes on the personality of its city (e.g. Pittsburgh Steelers). And this organization is no different; the 49ers are smart, dynamic and sophisticated from the top down. They have a front office that's hiring quant types from Silicon Valley, a charismatic innovative coach in Jim Harbaugh, and an uber-talented QB in Colin Kaepernick to lead the franchise for the next decade. Levi's has a seat on a proverbial rocket ship as the 49ers franchise is set to be the New England Patriots of the West Coast, complete with a shiny new stadium and a nucleus of very smart, talented people running the show.
From a “value” perspective, Levi’s is well positioned to enjoy multiple primetime broadcasts each year and even a potential Super Bowl date, with a bid to host the 2016 game. The brand also earns bonus points ushering in the next era of the 49ers franchise as opposed to assuming naming rights from an incumbent at an existing venue.
On the flip side, if we look back at the last apparel brand’s naming rights partnership (Izod and the eventual lame duck New Jersey Nets, 2007-2011), there is no real comparison.
But why would a brand that has been successfully positioned as a hip urban badge enter into a mainstream sports sponsorship deal? While they’ve recently shown signs of leaning in that direction with Russell Wilson and Russell Westbrook activations, this move is as daring as any fourth-down Harbaugh play call.
The answer is simple—brands that have enjoyed success within a defined pocket often tend to plateau. Levi’s’ big bet is based on the opportunity to raise its ceiling for growth without alienating its core consumer. However, ultimate success will come down to activation beyond the equity earned from a media, goodwill and PR perspective. It will need to define and develop a brand story that is local, but resonates on a national level.
And we shouldn’t forget that the brand will also be able to leverage the facility as an entertainment platform in addition to sports. Beyond Kaepernick and Harbaugh rocking denim, expect music festivals, concerts and marquee sporting events to find a new home in Northern California. No doubt the venue will be super modern and wired to the nines, so Levi’s will be able to develop on-premise activations that engage its guests and are organically shared on social platforms.
So, while the naming rights route has traditionally been ticketed by big companies from relatively sterile categories reppin’ their hometown, this “pioneer” is betting on their new partnership to strike gold. It’s a significant move for a progressive brand that just announced to the sports world that they will be putting their big boy pants on for a primetime audience, one leg at a time.