By David Brighton
Originally Published in SBJ
Emerging categories helped the venue naming-rights market thrive over the past 19 months despite a lack of events and fans in attendance, as more than $1.2 billion in new or extended deals were signed at 79 stadiums and arenas in the United States and Canada, according to Sports Business Journal research.
Following a four-month pause during the pandemic, the marketplace reignited in July 2020 when UBS, a Swiss financial company, committed $350 million to put its moniker on the New York Islanders’ under-construction arena. The deal set the tone for the next year, as 38% of the big league deals signed since then came from the financial sector, the most of any market segment and nearly double the rate that occurred between 1970 and 1999.
Amazon pledged a similar amount 27 days later to tout its environmental sustainability efforts, naming Seattle’s arena Climate Pledge Arena. Both venues are scheduled to open this fall.
Amazon’s unique decision also sparked a trend. Ball Corp., for example, replaced Pepsi’s longtime arena deal in Denver, as it hopes to promote its environmentally friendly aluminum products; and during their NBA Finals run last month, the Phoenix Suns signed with plant-based engineering company Footprint to rename the team’s recently renovated arena.
Innovative Partnerships Group CEO Jeff Marks, who represented the Suns in the deal, said a relationship with a sustainability company provides multiple touchpoints that give stakeholders an opportunity to spotlight their efforts to both their fans and their business partners, something that is more difficult to do with an insurance company or automaker.
“Twenty years ago, naming rights were more of an ego deal for CEOs, and a decade ago it was a marketing decision,” Marks said. “But naming rights in 2021 is a holistic business decision. These are long-term deals that should be treated as if you are buying a business. If you are a CEO with a naming-rights deal, you should feel like the venue is your office.”
And, like Footprint, many of the new players in the naming-rights scene are small and/or unknown businesses.
“Q2 (Austin FC), FTX (Miami Heat), SoFi (Los Angeles Rams and Chargers), Footprint and Lower.com (Columbus Crew) and Paycom (Oklahoma City Thunder) all had revenue below $1 billion when their respective deals were announced,” said Drew Bolero, manager of data strategy at Navigate. “This shows that naming rights is feasible for a growing brand, given the right situation.”
Bolero said recent evolutions in technology have helped the industry develop a better understanding of the performance of such sponsorships in terms of impact and efficiency.
“As far as specific metrics, we now have access to geo-location data, which helps us understand demographics of event attendees, as well as their habits and interests based on where they go before and after events,” he said. “We also have more vendors tracking logos using AI to give us a more precise understanding of time on screen than we had in the past with manual tracking.”
The insurance segment is poised to overtake automakers as the niche’s second-biggest category, after insurers replaced three existing naming-rightspartners over the past 30 months. In March of 1996, eight months before the groundbreaking for the Milwaukee Brewers’ new ballpark, Miller Brewing announced it would put its name on the hometown stadium. That deal ended last year when American Family Insurance took over. Similarly, Canada Life last year took over rights in Winnipeg, where MTS signage had been on the arena since 2004, when the AHL Manitoba Moose were the anchor tenant (before the then-Atlanta Thrashers moved to Canada prior to the 2011-12 NHL season). Additionally, Highmark Blue Cross and Blue Shield replaced New Era’s short-lived presence atop the Buffalo Bills stadium.
Although it may be too soon to classify it as an emerging category, Verona, Wis.-based Wisconsin Brewing Co. announced earlier this summer that the under-construction ballpark that is scheduled to open next spring as home to the American Association (Independent) Lake Country DockHounds will bear the beermaker’s name, a first for a craft brewery. The first naming-rights deal structured as such came in 1970, after the F. & M. Schaefer Brewing Co. paid 25% of the construction costs of the New England Patriots’ new $6.7 million Schaefer Stadium in Foxboro, Mass.
Looking ahead, colleges and minor leagues will continue to serve as fertile ground for brands to showcase their products and services, as there really are only a handful of big league venues with naming rights in play. The San Antonio Spurs are looking to replace recently departed AT&T; MLS has availability at LAFC’s pitch, as well as the under-construction venues in Nashville and St. Louis; Heinz has said it will not renew its deal with the Pittsburgh Steelers after this season; and in Washington, Nationals Park opened in 2008 but has yet to have a corporate name.
And the processes and objectives for both sides are dramatically different in the post-COVID economy.
“Naming rights are no longer just a sponsorship,” Marks said. “If you are selling it that way, it’s DOA.”
