The Value of Brand Names In A Stadium
What Is in a brand name? A lot if it’s at a sports stadium or famous construction sites. Marketers know that placing a brand name on a place (if there’s not any negative association with the location, and when the brand is associated under the category in which the location falls into; e.g. a brand that is known for its basketball team uniforms being placed in a basketball stadium) can create billions of positive new impressions in the minds of future customers.
Why billions? Visitors to significant venues are only one of the viewers that see the brand name. Others comprise passers-by, TV and Web audiences that watch events live and in replays, News audiences on TV and in social networking, people watching movies posted on YouTube or even people who discuss photographs in person and on the internet. That is why the proprietors of stadiums and other renowned structures are more than pleased to sell the naming rights as a means to create substantial additional revenue.
Short History of Naming Rights
Not long ago, stadiums were normally named after those groups that inhabited them (Yankee or Dodger Stadium) or people (Comiskey Park or even RFK Stadium) or a geographic place (Anaheim Stadium). In the first days of professional sports, there are just a couple of examples of place names which were associated with these businesses.
In 1912, the owner of the stadium in which the Boston Red Sox played in Fenway Park following a property firm he owned. Then in 1926, William Wrigley called in a stadium event where the Chicago Cubs played with Wrigley Field. It isn’t clear if he did so to foster the gum business he possessed or if he only wanted to sell the family name to the scene (or both). Back in 1953, August Busch II wished to rename Sportsman’s Park, in which the St. Louis Cardinals played, into Budweiser Stadium. However, the league didn’t permit it. He managed to name it Busch Stadium after his family name. To capitalize on the scene title, “Augie” immediately introduced a new brand of beer named Busch Bavarian Beer.
When Prices Started to Soar
The steep escalation in costs for naming rights could be tracked to 1999 during the time that FedEx had consented to cover the Washington Redskins $205 million over 27 years to get the rights to name the scene at which the Redskins play. This was followed by a lot of other large naming rights agreements.
MetLife signed a $400 million deal on 25 years to mention the Meadowlands scene in which the New York Giants play. Reliant Energy signed a $320 million 32-year bargain to name the scene where the Houston Texans play. Citigroup signed a $400 million agreement to put its name to the scene at which the New York Mets play with.
Farmers Field in Los Angeles
Fast-forwarding to now, to get a perspective on the type of money that could now be produced from selling naming rights, one may want to consider Farmer’s Area in Los Angeles. Though AEG hasn’t broken ground to construct the stadium and there’s absolutely no soccer team signed to perform with in there, Farmers Insurance recently signed an agreement to cover the land developer $700 million; more than 30 years for the naming rights. If you do not already know, that’s the most anybody has consented to cover the naming rights of any arena (or some other arrangement for that matter) so far. That is a lot of expenses to be spent on any marketing attempts in the fitness industry.
The Lerner family, which owns the Washington Nationals, is considering the large sums which are being compensated for arena naming rights. They’re hoping their staff, which can be in first place at the National League East as of the writing, will enable them to push the cost they’ll get for the naming rights.
Are The High Costs Worth the Investment?
It’s tough to say that most of the naming deals are worth the investment since there are a lot of variables involved. Some of the important ones are given below.
Successful events and teams. Are the groups and events which happen in the place effectively? Staples Center in Los Angeles has the fantastic fortune of getting the Lakers, Clippers, and Kings play at the Exact Same venue. The Lakers have won a lot of titles, the Kings won the Stanley Cup this past year, as well as the Clippers play basketball with different star players along with a fast-improving group. In this case, the Staples Center might want to push out brands that are associated with these teams. It could be the basketball shorts brand the Lakers team members are using, or it could be the shoes.
Traffic. Do the town and place generate adequate home-grown and traffic? New York, Chicago, and Los Angeles have big populations and are popular tourist destinations.
Media Magnet. Is your place in a huge media market which gets a good deal of media policy, locally, nationally and globally? The huge media markets have a tendency to mirror places with big populations and effective events.
Picture of those associations. The corporate picture of those organizations that purchase and sell the naming rights will play a significant part. As it had been reported that CitiGroup was spending $400 million for naming rights to its venue, several were “up” because the company took $45 billion in bailout funds out of the U.S. government, and it was revealed that it paid $50 million to get a personal jet for its own executives. Articles from the media have seriously known it as TARP Field and Bailout Park.
CPM. What does it cost to earn a similar number of new impressions with different websites? Marketers typically consider a step named CPM, which stands for the charge to reach 1,000 prospects, to compare websites prices. This method is used across industries, so it is not specific to stadium marketing. Aside from that, this is information is also commonly used in digital marketing for fitness related businesses.
When Naming Rights Can Turn Into a Nightmare
Though the CitiGroup naming rights situation isn’t perfect, it doesn’t increase to the level of a naming rights catastrophe. That’s earmarked for Enron. Enron Field was home to the Houston Astros. Enron paid $100 million over 30 years for the naming rights. When Enron’s misdeeds were revealed and the company filed for bankruptcy, the title turned into a burning wound along with a public relations catastrophe. In a bid to fix the issue, and that the Astros purchased back the naming rights at a discounted cost of $2.1 million and renamed it Astros Field. About a year later, they sold the naming rights to the Houston-based Minute Maid Division of Coca Cola to get $170 million within 28 decades.
Brand Impressions Guideline
Regardless of the negative scenarios, placing a name on a stadium especially the major ones such as the Melbourne Stadium is generally a fantastic idea for your new because it would be hard to create billions of new impressions within a similar time period with different websites. Provided that the company or division to which it’s named has a fantastic picture and the place doesn’t have any severe negative relationships, it’s very likely to be a fantastic deal for both sides.
While over a few individuals don’t want to find stadiums that home their preferred teams tagged with an otherwise unaffiliated company name, it’s a simple fact of life in 2013. When places get cash from companies such as naming rights, maybe they could charge us for entry. Whoops! I guess I had been dreaming for a moment. All of a sudden, I have a craving for some lemon juice.