What makes a perfect naming rights partnership? Ten factors to consider

Spotify’s partnership with Barcelona’s Nou Camp, M&T Bank’s renewal with NFL’s Baltimore Ravens and Porsche’s new alliance with Stuttgart stadium in Germany underline both the dynamism of the sector – and its appeal to a wide pool of brands. At the same time, Ovo Energy’s deal with Wembley Arena shows that it’s not only highly-prized sports stadia that are securing attractive naming rights deals – but also venues more closely associated with music and entertainment.

The price-tag on naming rights deals varies hugely – and is inevitably arrived at through a process of intense commercial negotiations. But what are the kind of factors that should be taken into account when considering naming rights as an option? Below are 10 factors that are classic ingredients in a successful naming rights deal.

Brand exposure/affinity: A key rationale for signing a naming rights deal is brand exposure – which explains why there is a premium on top-flight sports stadia. A core reason why Spotify was willing to spend €280m on its Nou Camp deal is that Barcelona is a successful club that takes part in elite events such as La Liga and the UEFA Champions League. This ensures the music platform is pretty much guaranteed a level of global exposure. While sponsorship practitioners can be sceptical about the value of ‘exposure’, there’s no question that the billboard component of naming rights is why elite soccer and NFL bag the biggest deals. It will be interesting to see if failure to qualify for the UCL this term will impact on the value of Tottenham Hotspur’s proposed naming rights deal, which has been in the offing for some time. 

Of course, brand exposure is only one component of any naming rights equation – alongside brand affinity. Also significant is the potential for brand values to transfer from the rights holder to the sponsor. There’s no question that Etihad Airways has benefited hugely through its naming rights association with Manchester City – which last season confirmed its status as the world’s leading soccer club. Any sponsor looking to enter a naming rights deal should consider what values they hope to absorb.

Brand fit: There are plenty of examples of naming rights deals where the brand fit is not obvious. MLB’s Chicago White Socks, for example, were not that popular with fans when they signed a ten-year naming rights deal with mortgage company Guaranteed Rate. But if possible it makes sense to find a partnership which looks authentic or has some kind of aspirational dimension. Scottish Gas, for example, recently took on naming rights to Edinburgh’s Murrayfield Stadium as part of a wide-ranging sponsorship deal with Scottish Rugby. Utilities don’t always have the best of reputations – but there is a logic to this partnership, rooted in the Scottish sense of identity. As such, it’s a relationship fans can get on board with. Situations where the fit isn’t good tend to lead to negative press headlines and a steady stream of invective across social media.

Controlled clutter: Leading sports clubs maximise their revenues by selling pretty much anything they can identify as a stand-alone sponsorship opportunity. Premier League shirts, for example, are starting to resemble Formula One cars, while ‘official’ partnerships have become increasingly segmented over the years. Training kits, stands, hospitality areas and digital platforms are also contributing to the growing clutter within sports sponsorship. Naming rights sponsors can’t expect to turn the tide in this area, but it makes sense to look at the level of clutter associated with a naming rights target – to see if this might diminish the value of the partnership. 

Amplification opportunities: One way to counter the downside risk of clutter is to consider securing naming rights alongside another set of rights – such as shirt sponsorship or a high-profile official supplier relationship. Emirates Airlines, for example, has doubled up as Arsenal stadium and shirt sponsor since 2004. If that’s too expensive to consider, then maybe naming rights can be coupled with a community-facing commitment. Stadia generally play a key role within their local communities, so there’s a compelling opportunity to use them as the basis for locally-targeted sponsorship activations. 

Ancillary benefits: The lion’s share of a naming rights deal’s value lies in brand exposure and engagement. But it’s important to take a holistic view of the opportunities presented by such partnerships. Some kind of hospitality or corporate ticketing allocation is an easy add-on. It’s also important to consider the stadium opportunity in its totality. Is there some kind of environmental or technological USP to the venue that a naming rights sponsor can tap into? Is there a data bank the sponsor can get access to (eg profile of ticket purchasers)? Is there scope to hold team-building events on site for employees? Can access to star players be integrated into the deal? When UKSA last looked at naming rights a few years ago, we quoted Nielsen Sports, which 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.” 

Physical infrastructure: When choosing a naming rights partner, it might be tempting to go for a long-established stadium or venue – something with heritage. But don't let nostalgia rule your decision-making. Older constructions may offer a poor experience to fans or could be environmentally unfriendly. They may no longer be in popular/safe parts of the city/town because of changes in local demography and development. It’s important not to get saddled with a 20-year partnership where the core asset is likely to cause reputational damage or is not fit for purpose for planned sponsor activities.

Think creatively: While thinking about the potential pitfalls of particular naming rights venues, also keep in mind that there are plenty of unconventional opportunities that may be cheaper than sports stadia – but just as effective. Office blocks, shopping malls, hospitals, museums, libraries and schools might all be open to such an arrangement – and will probably make better use of the money (i.e., services that support the local community rather than inflated salaries for elite athletes). A clever example of this in recent years was Uber’s sponsorship of Thames Clipper boats.

Supplementary activity: It makes sense to know all of the activities that take place in the proposed naming rights venue. The engine of the deal may be that the venue hosts a popular sports team, but does it host teams from different sports? And are there also music and corporate events across the course of the year that attract sizeable audiences? If the venue in question is multipurpose then there are more opportunities to target discrete demos.

Longevity: Naming rights deals tend to last a long time for a reason. Longevity allows the sponsorship to bed in properly, so that fans and the media get used to the name. This is particularly important when sponsors are replacing a legacy name. It can take several seasons for fans to get the old name out of their system – which means 3-5 years naming rights deal would probably be ineffective from a brand-building perspective (unless you’re talking about a deal with a more modestly size venue). Longer deals also show a level of commitment that fans welcome – helping overcome initial resistance. They also allow the stadium or venue to make long-term plans based on the guaranteed revenue stream flowing out of the deal.

Sensitive nomenclature: One of the big talking points around naming rights is what the stadium will be called after the deal. In an ideal world, brands want to go all in – renaming the venue with their own marque. Classic examples are The O2 and Arsenal’s Emirates Stadium. This approach is relatively straightforward with new stadia (particularly if the sponsor is perceived to have made the stadium possible), but it’s more complicated with stadia that carry decades of heritage. The idea of renaming Manchester United’s Old Trafford as the Aldi Arena, for example, would cause insurrection on the terraces. Of course, something similar has actually happened, when Newcastle’s famous St James Park was renamed as the Sports Direct Arena when under the ownership of Mike Ashley. But the move wasn’t well-received by all, and was even referred to as corporate vandalism in the UK Parliament.

For this reason, brands that partner with legacy stadia tend to accept a shared billing – eg the Spotify Nou Camp. This is probably a wise decision – but it’s important to get the name exactly right. The wrong format can make it easy for the brand’s name to be dropped. That’s why sponsors need to be wary of constructions like “Wembley Stadium connected by EE”. Liverpool’s owners Fenway have recognised the risks of inappropriate naming rights deals. Rather than sell the Anfield stadium name, they focused their energies on the potential for a naming rights deal associated with a single stand instead.

The entry process for the 2024 UK Sponsorship Awards will go live in September and will include a Best Use Of Naming Rights category. The 30th Anniversary edition of the Awards will include many of its usual categories (arts, sport, media etc), and also some new innovations to be announced shortly. The industry-leading event will be held in the London Marriott Hotel Grosvenor Square on March 26th 2024 and is expected to draw around 450 industry decision-makers.