What’s In A Name? Naming Rights Boom Brings Brand Activation Benefits That Go Far Beyond Sponsorship Badging Exercise

The popularity of naming rights deals can be linked to the growing professionalisation of elite sport. With the cost of competing at the highest level going up every year, sports clubs and franchises have had to squeeze every penny out of their physical and intellectual assets. So rebadging existing stadia, or bringing in sponsors to help with the cost of constructing a new home, is something of a no brainer.

These days, the cost of securing one of the sports sector’s prize assets is truly eye-watering. Last year, for example, Scotiabank paid $639 million (for the period 2017-2038) to rebrand Toronto’s Air Canada Centre, home of NHL’s Toronto Maple Leafs among others. In the US, meanwhile, another financial services giant, Chase, paid between $300-400 million (2016-2040) to name the Chase Centre, a multi-purpose arena currently being built in the San Francisco Bay Area.

Closer to home, Tottenham Hotspur is reported to be looking for £200 million over 10 years from a sponsor for the rights to its new stadium. Elsewhere La Liga’s Barcelona is reportedly seeking £300 million for the partial naming rights to its stadium (the existing name Camp Nou would still be included in the reconfigured stadium name).

The practice is extremely widespread and growing – especially in football. In an analysis of the market last year, Nielsen Sports observed: “In European football (first & second leagues and national stadiums of UEFA’s member countries), more than 170 naming rights agreements are currently in place. These contracts cost sponsors some €150 million over the course of the 2016-17 season; just 10 years ago, the total was only a third of that amount (€48 million).”

Emphasis on elements that can deliver revenue-generating opportunities

While the traditional rationale for handing over such huge sums was brand exposure, it’s become clear in recent times that this in itself is not sufficient to attract most sponsors. These days, there is an increasing emphasis on elements that can deliver revenue-generating opportunities and brand engagement. In the field of US college sports, for example, when Public Service Credit Union unveiled its new 15-year naming rights partnership with Colorado State University, it also secured a range of rights related to the entire university campus and community. These included opening branches, installing ATMs and marketing cobranded products to students and staff. There was even provision for PCSU to offer financial literacy classes to students.

Not every naming rights deals comes with a university campus attached, but there is an expectation that venues and stadia will go the extra mile when seeking to support their partners. In Nielsen Sports’ analysis, referenced above, EVP commercial operations Lars Stegelman stressed the importance of adding a digital/data dimension: “The goal of any naming rights sponsorship should be to leverage the fan data generated through digital infrastructures, in order to learn more about the various visitor groups at hand.”

Stegelman identifies two key ways in which naming rights deals can be used to engage more effectively with the people passing through the proverbial turnstile. The first is to link the sponsor to value-added mobile services. Offering fast lanes to enter the stadium, e-ticketing and the ability to order snack and drinks from their seat are all ways to create positive buzz around a naming rights brand. The second is to use the venue’s proximity to talent to generate content – interviews, highlights, behind the scenes video – that will engage fans. This kind of content can be branded by the naming rights sponsor and is not limited to consumption in the confines of the venue itself.

Initiatives of this kind have intrinsic value to fans. But they can also address the possibility that fans might not like the idea of a naming rights partnership (this is a particular risk in sports like football and rugby where there is often a tribal loyalty attached to venues). While some fans will recognise that naming rights is part and parcel of the modern commercial landscape, others will resent the fact that their beloved venue has been badged with a brand (especially in a renaming scenario). So anything the brand can do to win over fans may help dissipate fan resistance or resentment. Naming rights sponsors that attach themselves to free drinks, early access to tickets, cut price tickets or money can’t buy competitions are all fan-pleasers.

UK Sponsorship Awards’ Best Use of Naming Rights category

Brands and rights holders that are already active in this area can enter the UK Sponsorship Awards’ Best Use of Naming Rights category. Now in its third year, the category rewards companies that have maximised the use of naming rights assets in some of the ways outlined above. The scale of the deal is not a guarantee of success in this category. Instead it is important to show creativity and innovation with assets.  

Last year's winner (entered by Nielsen Sports) was the Leeds-based first direct arena, which is managed by venue specialists SMG. Commenting, Jen Mitchell, general manager of the first direct arena, made it clear that a good naming rights partnership is a win-win – bringing benefits to the venue that go beyond the rights fee: “SMG is very proud of our relationship with first direct bank and its customers. It has always been more of a partnership between us than merely a sponsorship. The partnership has been a massive factor in propelling the arena up to 13th in the world in the Pollstar rankings, establishing us as one of the bestselling arenas and among the world’s elite.”

Benefits for first direct customers have included exclusive pre-sales, complimentary tickets, an exclusive entrance, and free food and drink within the arena. But underlining Mitchell’s point, the bank has also been instrumental in bringing big events to Yorkshire, including the MOBO Awards and an exclusive Jake Bugg concert. In other words, there is also a potential customer acquisition benefit in the deal.

It’s clear the partnership is working well for first direct – because it recently extended the deal to 2023. "The reaction of our customers to our association with the arena has been outstanding and we’re delighted to commit to an additional five years and begin planning the exciting years of partnership to come,” said Joe Gordon, head of First Direct. “Other banks have branches, but we have an arena!”

The entry process for the 2019 UK Sponsorship Awards is now live and includes a Best Use Of Naming Rights category. The 25th Anniversary edition of the Awards will also include many of its usual categories (arts, sport, media etc), and also some new innovations. The industry-leading event will be held in the London Marriott Hotel Grosvenor Square on March 26th 2019 and is expected to draw around 500 decision-makers.