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May 31, 2004

What’s In A Name?

FROM THE CRASS COMMERCIALISM OF PRO SPORTS comes an update on the high stakes revenue generator that is known as naming rights.

Anyone with a memory longer than decade can remember when sports facilities were named after persons, teams and cities; but not sponsoring corporations. The Astrodome. Crosley Field. Ebbetts Field. Cobo Arena. Maple Leaf Garden.

To be sure, there were a few venues with corporate names, but they were not of the mega payment variety that has taken hold today. Rather, those were low budget exceptions with none of the elaborate promotional creativity of today’s versions. Busch Stadium (St. Louis Cardinals) and Schaefer Stadium (New England Patriots) come to mind as naming rights precursors.

Today, more than half of professional sports facilities are named for corporations. The attractiveness of naming rights as a requisite marketing tool has everything to do with Madison Avenue slickness to solidify awareness and reinforcement branding benefits. Also in the mix are the substantial hospitality and promotional elements involved with naming rights sponsorships.

A less measurable—but highly desirable—component of naming rights is the desire of the paying corporate sponsor to gain the positive image rub of being association with the home team(s).

And what kind of corporations are ponying up for naming rights investments? About a third are banks and financial institutions. Others include energy companies, airlines, telecoms, software makers, dot.coms, brewers, car companies and insurance companies. Plus juices (Minute Maid Park), shipping (FedEx Field), electronics (Philips Arena), men’s toiletries (Gilette Stadium), and so on.

Naming rights has become a big business. The Bonham Group, a sports marketing company, says there are currently 66 naming rights deals in place worth $3.6 billion.

According to Sports Business Journal, the top five naming deals are:

Reliant Stadium (Houston Texans): $300 million for 30 years

FedEx Field (Washington Redskins): $205 million for 27 years

American Airlines Center (Dallas Mavs, Stars): $195 million for 30 years

Philips Arena (Atlanta Hawks, Thrashers): $185 million for 20 years

Minute Maid Park (Houston Astros): $170 million for 28 years

The amount of naming rights revenues that can generated for college athletics is questionable. Blatant corporate naming for entire facilities is unlikely (crass commercialism not in keeping with the underlying academic mission of college athletics) but peripheral naming effort have taken place at many schools.

The University of Memphis is perhaps the best example of supplemental revenues generated from naming rights. Memphis offers naming opportunities totaling almost $10 million, including coaches’ offices, players’ lounges, meeting rooms, locker rooms, weight rooms and practice fields and courts.

Memphis fund raisers are not shy about their naming rights campaign. “Hey, we’ll sell the floor and the walls.” says a top fundraiser for Tiger athletics.

Aside from enhancing bonds with team boosters, naming rights are a revenue generator requiring relatively little investment by the university. After all, the facilities are already there.

What’s next? Consulting firms specializing in maximizing naming rights revenues for cash hungry schools? Anyone want to start a business?

(this 496 word excerpt—with attendant commentary—was distilled from a 2113 word, 2 chart, 11 photo article in the New York Times of 5-30-04 and a 1048 word article in the May, 2004 issue of Athletic Business magazine)