Stadia Naming Rights in Sport

Leah Gillooly, Terry Eddy, Dominic Medway

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000635041
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Sport- & Bewegungswissenschaft

This book is an accessible, practical, and systematic guide to stadium naming rights sponsorship within sport, designed to help practitioners and students gain a better understanding of how naming rights work and the benefits that sport and corporate organisations may get from this kind of arrangement.

The book explains the key principles underpinning naming rights deals and sports sponsorship in non-specialist language for readers with little prior knowledge of the subject. Drawing on examples and case studies of naming rights sponsorships in international markets, across both professional and amateur sport, the book examines key practical issues such as how naming rights differ from other types of sponsorship, why brands should sign a naming rights deal, and how organisations can maximise their return on naming rights sponsorship.

Concise, informative, and practice-focused, this book offers essential insights for all sport management practitioners, for any marketing executives considering sport sponsorship, and for any students or researchers with an interest in sport marketing, sport management, marketing, or events and facilities management.

1 Introducing Naming Rights Sponsorship

DOI: 10.4324/9781003111849-1

What is naming rights sponsorship?

Sponsorship has been defined as ‘an investment in cash or in-kind, in an activity, in return for access to the exploitable commercial potential associated with that activity’ (Meenaghan, 1991, p. 35). Naming rights can be seen as a particular type or form of sponsorship, which involves an exchange of money from a naming rights sponsor to the facility owner (known as the rights holder) in return for the right to name that facility or stadium. However, sponsorship agreements involving naming rights did not gain traction until after traditional sponsorship had become commonplace in sport. These types of deals have also previously been referred to as building/facility sponsorships or title sponsorships, but facility naming rights or stadia naming rights (followed, or not, by the word sponsorship) are the generally accepted terms. We will use the complete forms at times throughout this book, but will also frequently truncate to ‘naming rights’, which has become standard practice.

In addition to the differences in terminology, the way that naming rights fits within sponsorship paradigms is potentially changing. Naming rights have often been referred to as a special case of sponsorship or a distinct type of sponsorship. Historically, it made sense to categorise naming rights as a special case of traditional sponsorship, as facility naming sponsors rarely employed strategies beyond static signage to communicate their sponsorships (Fullerton & Merz, 2008). This is no longer the case, however, as the majority of brands purchasing naming rights now also activate their sponsorships in numerous other ways. The facility name tends to be the most widely visible piece of sponsorship agreements that frequently have many layers to connect with consumers in different ways (as we will discuss in Chapter 3). The question of how naming rights sponsorship is best conceived moving forwards is something to which we will return in Chapter 6 when we look at the future of naming rights sponsorship in sport.

Regardless of how the term naming rights is defined, there are several aspects of such activity that are unique and/or notable compared to other forms of sponsorship/activation. First and most importantly, naming rights sponsors enjoy ubiquitous visibility compared to other sponsors (Fullerton & Merz, 2008). Whereas most sponsorship agreements (with the slight exception of shirt sponsors) tend to be noticed primarily (even exclusively) by teams’ fans and/or attendees, naming rights sponsors are recognisable to much wider populations of sports fans nationally, or even internationally. Further, naming rights are arguably the most effective means of generating awareness beyond the sport in question, for example, with residents of, and visitors to, a region, or with anyone attending non-sporting events at a given facility. Second, naming rights agreements typically feature greater sums of money over longer periods of time than those sponsorships without naming rights. Naming rights agreements are typically signed for at least five years and can be in excess of 20 years. There are even a few examples of naming rights deals in perpetuity, such as the Carrier Dome at Syracuse University in the USA.¹ Finally, the name of a stadium is more than just an identifier – sports fans become attached to the places where their teams play, so stadia are often seen as a ‘second home’, and the name becomes part of the personality of the buildings.

It should be noted that the practice of selling naming rights extends to different areas within sport facilities as well. This has been especially popular in settings where organisations are concerned about changing decades-old names of historic stadia (e.g., US college sport). The most notable examples are sales of the names of the playing surface (e.g., Capital One Field at Maryland Stadium), which are seen as a compromise to completely eliminating the previous name of the facility. Naming deals also extend to other spaces within venues such as seating areas, club suites and boxes, food courts, and beer gardens. Even Madison Square Garden, self-proclaimed as the world’s most famous arena and recognised as the last National Basketball Association (NBA) facility to bear a non-corporate name, contains numerous corporately-named spaces, including the J.P Morgan Club, the Delta Sky360 Club, and the Lexus Level Suites. Although these deals generate significant revenue for sport organisations, the totals are predictably much lower than for a facility deal, since the names are mainly only visible to event attendees (perhaps with occasional media mentions), and strong recognition may be limited to the relatively few attendees who experience those spaces first-hand. Given the difference in scope of the agreements, and numerous other nuances, we will not be covering these types of deals in this book.

We would also be remiss not to mention that, although sport facilities dominate the market for naming rights agreements, naming rights have become prevalent in several other industries, particularly for non-profit organisations. Theatres, amphitheatres, art galleries, and a host of other spaces frequently feature names purchased by corporations. These deals are often completed with many of the same objectives in mind as those seen with sports naming rights (e.g., raising the sponsor’s awareness or enhancing their image). The main difference here is that the sponsoring brand is accessing very different target markets to sports fans or participants (e.g., art enthusiasts, concert goers, philanthropists). Obviously, this book is focused exclusively on sport; if readers are interested in learning more about the non-sport space, we suggest Naming Rights: Legacy Gifts and Corporate Giving (2008) by Terry Burton as a starting point.

A brief history

Although naming rights, as we know them, have only existed for about 50 years, there has been substantial growth and nuance in that time. Virtually every deal has offered something unique to the evolution of this sponsorship practice. Given that an exhaustive, detailed history is not our goal, we offer only an abridged version for the purpose of context.

The earliest examples of corporate names appearing on sports stadia came in the first half of the 20th century in the USA (e.g., Wrigley Field, Busch Stadium). However, these are generally not considered naming rights sponsorships per se because the brands and teams were both owned by the families of the same name, and no sponsorship exchange process was involved (Dodd, 2008). It seems that in most cases, there was some commercial intent behind these name choices, which may be why they are frequently mentioned in mainstream media as the first naming rights deals, but they do not qualify as sponsorships based on the widely accepted definitions that we are following in this book.

While there is substantial debate as to what the first true naming rights sponsorship was, we believe the first such deal occurred in 1971 when the Schaefer Brewing Company paid $150,000 to name the New England Patriots’s stadium Schaefer Field (Noll & Zimbalist, 1997). The Schaefer name remained on the stadium until 1982. The second such deal came in 1973 when Rich Products, a frozen food supplier, paid $1.5 million over 20 years to name Rich Stadium, home of the National Football League’s (NFL) Buffalo Bills (Crompton & Howard, 2003). The Rich Stadium deal more closely resembles the naming rights deals of today as it was the first to have a defined term for the agreement – this is perhaps why some cite the Rich deal as the first true stadium naming rights sponsorship.

Although the Schaefer and Rich deals were agreed within two years of each other, this idea of a corporation not affiliated with a given sports club paying to name its stadium did not take off for another 15–20 years. One reason appears to have been that the vast majority of the revenue required to run a sport franchise at that time could be covered by ticket sales. Further, at least within the USA, before the 1980s new facility construction costs were almost entirely covered by public funds. Thus, most organisations had little need for a naming rights partner, and instead named their stadia after prominent civic leaders (e.g., Hubert H. Humphrey Metrodome) or the local region (e.g., Louisiana Superdome) to acknowledge the public support.

As construction costs began to rise in the 1980s, public interest in funding new facilities with tax increases began to wane. Further, the introduction of free agency in North American professional sports in the late 1970s was substantially increasing the annual costs of running franchises. Thus, stadium/team owners began to seek new revenue streams to cover these costs, and the potential for naming rights could no longer be ignored (Nagel, 1999). The next major naming rights deal (after Rich Stadium) was signed in 1988, when the Los Angeles Forum became the Great Western Forum (Crompton & Howard, 2003), which served as a catalyst for naming rights throughout the rest of the 1980s and into the 1990s. By 2002, the market had exploded with almost 70% of professional sport venues in the USA having corporate naming rights sponsors, and the biggest deals ranging from $5–10 million per year (Crompton & Howard, 2003). From the mid-2000s onwards, naming rights continued to become the norm rather than the exception, with prices of up to $20 million per year starting to appear by 2006 (e.g., Citi Field in New York City).

During the late 1990s, naming rights sponsorships began to appear outside of the USA. One of the first deals came in the UK when Huddersfield Town Football Club’s newly built stadium was named the Alfred McAlpine Stadium (Alfred McAlpine was the main construction partner for the new stadium and the naming rights were part of the deal to build the venue). The Alfred McAlpine Stadium is an example of the large number of new stadia built in the UK following the publication of the Taylor Report in 1990, which, in light of the 1989 Hillsborough Stadium disaster where a crush claimed the lives of 97² Liverpool Football Club fans, mandated UK football stadia to become all-seater. The naming rights market in the UK quickly escalated when, in 2004, Emirates Airlines agreed to pay 100 million pounds over 15 years to name Arsenal Football Club’s new stadium in London, which was the largest per-year spend on a naming rights deal in the world at that time (Kemp, 2008).

Naming rights deals can now be found in approximately 40 countries worldwide. They have become commonplace in North America, much of Europe (particularly the UK, Germany, and Sweden), Japan, Australia, and New Zealand, and are emerging across the rest of the world (e.g., Brazil, China, and South Africa). In addition to spreading across the world, whenever it seems like naming rights prices are beginning to plateau, a new deal raises the bar. In 2017, Scotiabank set what was, at the time, a new naming rights record by signing a 20-year, $800 million CAD deal to rename Air Canada Centre in Toronto, home of the Toronto Raptors of the NBA and the Toronto Maple Leafs of the National Hockey League (NHL). Most recently, the cryptocurrency platform and exchange Crypto.com announced a 20-year, $700 million deal to rename the Staples Centre in Los Angeles to Crypto.com Arena. This deal may signal a new era in the scale of naming rights, as the Citi Field deal did in 2006, which we will discuss further in Chapter 6.

Trends and issues with naming rights

Sports sector diversification

Although the vast majority of early naming rights deals were in the realm of professional sport, naming rights have since spread to most other sports sectors. With continuing public funding constraints for sport and recreation across the globe, public sports facilities have turned to naming rights to fill the void. Many municipalities in North America have naming rights opportunities for facilities posted on their parks and recreation websites. For example, the County of San Diego, California offers naming rights for a majority of its recreation facilities, including ball fields and swimming pools. One notable example of a completed deal for a public sports complex came in 2017 when the City of Windsor, Ontario, Canada sold the naming rights for the former South Windsor Recreation Complex to Capri Pizzeria, a regional chain. The ten-year deal raised $160,000 CAD for various upgrades to the facility. In addition to the venue name, Capri Pizzeria obtained the rights for external signage and a concession stand.

Sponsors have also sought opportunities within youth/interscholastic sport, evident in the fact that schools have begun to engage in naming rights sponsorships. One of the first high school facility naming deals came in 2002 in Midland, Texas, USA, when Grande Communications purchased naming rights to the shared Midland High School/Robert E. Lee High School American football stadium (seating capacity of 15,000) for $1.2 million over 25 years. Other more recent high school deals in Texas have seen the per-year spends increase to $250,000–$300,000. Although the popularity of high school sport (particularly American football) in Texas is notable, leading to the higher than usual naming valuations, schools in other US states have also been able to secure six-figure deals.

US college sport, on the other hand, has seen naming rights deals emerge at a much slower pace compared to most other sport sectors, despite its unparalleled popularity and commercial potential compared to intercollegiate athletics in other countries. Although the Carrier Dome deal at Syracuse University has existed since 1979, corporate naming rights for college sport facilities are still the exception rather than the norm. Although there have been a few success stories (e.g., TCF Bank Stadium at the University of Minnesota), the names of major college sport facilities still typically fall within one of the following categories: (1) regional or institutional identifiers (e.g., Michigan Stadium at the University of Michigan), (2) memorials (e.g., Memorial Stadium at the University of Nebraska), or (3) notable alumni and/or donors (e.g., Boone Pickens Stadium at Oklahoma State University). As with other sporting contexts across the globe (e.g., European football), tradition is central to college sport fandom and, given that players can only compete for at most four years, the stadia (many of which are more than half a century old) are key elements of that tradition. Thus, many universities have been hesitant to explore naming rights, and there are still only a handful of deals across the college sport landscape. In these instances, many institutions have compromised by naming the field rather than the entire stadium (e.g., Alaska Airlines Field at Husky Stadium). Since research has specifically examined fan reactions to naming rights in the US collegiate sport context, we will revisit this in Chapter 4.

Types of sponsoring brands

In general, the naming rights space is dominated by large, global brands. This is no surprise given the sums required for the naming rights of major stadia at the most commercialised and highly visible levels of sport. Perhaps ...