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Chapter 13Chapter 13

Venue Naming RightsVenue Naming Rights

McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

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Venue Naming RightsVenue Naming Rights

• Building Sponsorship

• Sponsor Pays to Have Its Name Attached to a Facility for A Specified Period of Time

• Many Types of Facilities beyond Sports

• Also Driven by ROI

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Brief Historical PerspectiveBrief Historical Perspective

• Early Ego-Driven Motives

• 1973 – Rich Stadium for NFL’s Buffalo Bills ($1.5 million over 25 Years)

• Percent of US Professional Teams Playing in Venues with Corporate Sponsor– 30% in 1997– 70% in 2002

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Benefits for Four EntitiesBenefits for Four Entities

• Benefits for the Fans

• Benefits for the Community at Large

• Benefits for the Resident Organization

• Benefits for the Sponsor

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Benefits for the Fans – Often Benefits for the Fans – Often Involves New FacilityInvolves New Facility

• Better Seating Configurations

• More Amenities

• Potential for Lower Ticket Prices

• Better Product

• Team Retention

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Benefits for the Benefits for the Community at LargeCommunity at Large

• Provides Jobs

• Higher Levels of Tourism

• Lower Taxpayers’ Burden

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Benefits for the Benefits for the Resident OrganizationResident Organization

• New Revenue Stream

• Enhanced Level of Prestige

• Greater Corporate Interest for Involvement Via Traditional Sponsorship

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Benefits for the SponsorBenefits for the Sponsor

• Improved Image

• Sustainable Competitive Advantage from the Association with the Venue and Its Resident Organization

• Hospitality

• Increased Sales

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Plan ComponentsPlan Components

• Comparable to Traditional Sponsorships

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Plan ComponentsPlan Components

• Signage– Places like main entrance, gathering areas,

scoreboards, concession areas

• Logos – On uniforms of participants, service workers,

and items such as napkins and cups

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Plan ComponentsPlan Components

• Advertising – Broadcast and Programs– Many venue naming rights deals include

advertising for the building sponsor; these may include radio, TV, and the event program

• Designation for Leveraging Purposes– A building sponsor often seeks ability to

position itself as an “official sponsor” of the venue’s primary resident organization

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Plan ComponentsPlan Components

• Category Exclusivity– Competitors of the building sponsor may not

be allowed any official role with the venue

• Recognition on Public Address Announcements and Scoreboards– Contract often specifies a minimum number of

such acknowledgements during each event that is staged at the venue

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Plan ComponentsPlan Components

• Hospitality– Provision of an area for entertaining; may

include a luxury suite for some (or all) events

• Complimentary Tickets– Free tickets to events staged at the venue

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Plan ComponentsPlan Components

• Web Presence– Acknowledgment or even a direct link to the

sponsor’s Web site from the venue and the resident organizations’ Web sites

• Distribution Rights– Ability of sponsor to sell its products at the

venue

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Plan ComponentsPlan Components

• Other Marketing Initiatives

– Take orders for products– Accept applications (i.e. credit card company)– Showcase products– Engage in giveaway promotions

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Example of Example of Venue Naming Rights ContractVenue Naming Rights Contract

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Key Success DriversKey Success Drivers

• Target Market Fit

• Ability to Leverage

• Integration within Sponsor’s IMC Plan

• Multipurpose Facilities

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Target Market FitTarget Market Fit

• Capitalize on Strategic Linkage to Reach the Sponsor’s Target Market

• Marketer May Need to Consider Venues beyond the Sports Environment

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Ability to LeverageAbility to Leverage

• Resident Organization May Receive a Significant Amount of Media Exposure

• Building Sponsor Should Use Leveraging Program as a Mean of Capitalizing on that Exposure

• Tie the Sponsor to the Resident Organization

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Integration within Integration within Sponsor’s IMC PlanSponsor’s IMC Plan

• Sponsorship Fits Other Elements of the Building Sponsor’s Marketing Strategy

• Sponsorship Is Not a Stand-Alone Promotional Strategy; It Must Work in Harmony with the Other Components of the Sponsor’s Integrated Marketing Communications Plan

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Multipurpose FacilitiesMultipurpose Facilities

• Multipurpose Facilities:

– Reach a Varied Array of Market Segments

– Reduce the Seasonal Variation Regarding the Use of the Venue

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Value DeterminationValue Determination

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Examples of Sports VenuesExamples of Sports Venues

Venue Location Total Contract$ Years

Reliant Stadium Houston, TX 300 30

Philips Arena Atlanta, GA 180 20

Allianz Arena Munich, Germany 110 15

Staples Center Los Angeles, CA 100 20

U. S. Cellular Field Chicago, IL 68 23

Jaguar Arena Coventry, England 13 12

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Beyond SportsBeyond Sports

• Examples Include– Hospitals– Educational Facilities– Museums– Performing Arts Centers– Shopping Malls

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Measuring ResultsMeasuring Results

• Qualitative Assessment

• Consumer Surveys of Awareness

• Media Equivalencies

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Problems, ConcernsProblems, Concernsand Criticismsand Criticisms

• Cost

• Public Reluctance to Embrace Corporate Name

• Media Resistance to Use Corporate Name

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Problems, ConcernsProblems, Concernsand Criticismsand Criticisms

• Difficult to Measure Sponsorship’s Impact

• Sponsor Transition (i.e. Merger)

• Arena Obsolescence

• Lack of Consistency – Performance of Resident Organization Varies over Time

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Problems, ConcernsProblems, Concernsand Criticismsand Criticisms

• Limited Number of Opportunities Remaining in the US Professional Market

• Teams Move

• Sponsorship Clutter

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Growth OpportunitiesGrowth Opportunities

• Some Pro Sports Opportunities in USA

• Nonsports Environment

• Secondary Sports Facilities

• Opportunities Outside of United States

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Brokers and ConsultantsBrokers and Consultants

• Specialized Agencies that Negotiate Deals that Work for Either the Sponsor or the Sponsee in the Negotiation Process

– Work to Get Maximum Revenue for Venue– Work to Get Best Deal for the Sponsor

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Closing CapsuleClosing Capsule

• Venue Naming Rights Is the Second Special Case of Sponsorship

• Primary Emphasis Has Been on Sports Venues, but Other Opportunities Abound

• It’s Not Just about Attaching a Corporate Name to a Building

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Closing CapsuleClosing Capsule

• Sponsors Seek Reasonable ROI

• Focus Is on the Potential Value of the Plan Components and the Sponsorship’s Cost

• Measuring the Results Is Difficult

• Done Correctly, Many Parties Will Benefit