This is an excerpt from Managing Sport Facilities 4th Edition With Web Study Guide by Gil B. Fried & Matthew Kastel.
Naming rights are somewhat controversial. A city or municipality may pay the bulk of the construction expense, and citizens should be recognized for their contributions. That is why so many older stadiums and arenas were named after people from the community as a tribute to their participation in a war. With the building boom of the 1990s, anchor tenants at large stadiums and arenas were asked to contribute funds to the building process. Many municipalities allowed the teams to sell the naming rights and use those funds as part of their contribution to the construction effort. The name was an asset the municipality could have sold to reduce the public obligation; however, in order to entice teams to stay, the municipalities were willing to transfer the asset to the teams. However, some facilities such as historic Lambeau Field in Green Bay and Soldier Field in Chicago have kept their names. Other teams believe their stadium name is an asset in itself, such as Fenway Park and Yankee Stadium.
Another controversy associated with naming rights has to do with the strength of the sponsor. The Houston Astros’ baseball field was originally named Enron Field, which became a disadvantage when the company collapsed. At the same time, other companies faced similar scandals, and these controversies significantly affected several facilities. Enron had agreed to a deal worth $100 million for 30 years. PSINet Stadium in Baltimore was part of a $105.5 million, 20-year deal before PSINet collapsed. Adelphia Coliseum in Nashville did not last long before the company went bankrupt. Mergers and bankruptcies can also affect naming rights. The TWA Dome in St. Louis was changed to Edward Jones Dome after TWA filed for bankruptcy; TWA had agreed to a 20-year, $36.7 million naming rights contract (Sieger and Patel, 2001). The Edward Jones sponsorship lasted from 2002 to 2016 when the St. Louis Rams moved to Los Angeles. Without a sponsorship naming deal, it is now called The Dome at America’s Center. One of the major lost naming rights cases went to the Sports Authority, which had its name on the Broncos Stadium at Mile High from 2011 through the company’s bankruptcy in 2016. The name stayed on the stadium until 2018, even though the company no longer existed, due to regulatory restrictions.
Naming rights can range from several hundred thousand to millions of dollars. The value of such deals is based on multiple variables, including the following:
- The length of the contract, which normally runs for 20 to 30 years
- The type of facility, events, anchor tenants, or teams
- Whether the deal involves only cash or also a trade-out of services
- What tie-in marketing strategies and campaigns will be used (Sieger and Patel, 2001)
Metlife Stadium Naming Fiasco
Allianz is a German financial services corporation that was the front-runner to secure naming rights to the new Giants and Jets football stadium in the Meadowlands. Allianz acknowledges its historic ties to Nazi Germany, so when the news broke that the insurance and finance company was possibly acquiring the naming rights to the stadium, a public outcry erupted in New York, where there exists a large Jewish community. Even though Allianz was willing to pay $30 million a year, and there was no other potential naming rights deal in the same financial neighborhood, the teams declined the offer.
To reduce sticker shock for some potential sponsors (Citi bought the naming rights for the Mets’ stadium for $20 million a year), the Jets and Giants sold the stadium’s corners to four cornerstone partners (SAP, Pepsi, Verizon, and Anheuser-Busch) and sold the right to name the entire facility to a naming partner (MetLife Insurance). The four cornerstone partners receive advertising on each of the 5,000-square-foot (465 sq m) corner scoreboards and at the stadium from the field to the parking lot (Kuriloff, 2007).
The Cleveland Browns followed the same strategy but instead sold the name for each of the four main gates. Tickets to a Browns game direct fans to the Cleveland Clinic gate, National City Bank gate, CoreComm gate, or Steris Corp. gate.