Why no company has signed a naming-rights deal with the Giants and Jets
THURSDAY, 02 SEPTEMBER 2010 06:58
BY EVAN WEINER
THE POLITICS OF SPORTS BUSINESS
Fred Wilpon is clearly one lucky owner although New York Mets fans will clearly disagree with that statement based on the on-field results of Wilpon's baseball team. Bruce Ratner was also one lucky owner while he controlled the New Jersey Nets basketball team although Nets fans will clearly disagree with that statement based on the on-court results of Ratner's Nets.
Both Wilpon and Ratner are in much better shape than the owners of the Giants (the Mara and Tisch families) and the Jets (Woody Johnson) in that they got two banks, Citibank and Barclay, to come up with a multi-year, multimillion dollar agreement for naming rights at Wilpon's Queens baseball park and Ratner's Brooklyn multi-purpose arena.
The Mara-Tisch-Johnson troika is still looking for a financial angel and if one major industry player is correct, it may be a long while before the East Rutherford, New Jersey home for the Giants and Jets along with the Arlington, Texas-based Cowboys Stadium and Major League Baseball's Nationals Stadium in Washington, D. C. will get naming-rights partners.
Bill McDonald, Capital One Chief Marketing Officer, just doesn't see too many companies out there who are willing to pay somewhere in the neighborhood of $400 million over 20 years to put their name on a side of a stadium or an arena. McDonald signs off on sports marketing deals for Capital One and looks for a worthwhile investment in terms of a marketing strategy. Capital One has a deal with the National Collegiate Athletic Association and with the Citrus Bowl. But Capital One is not going to spend through the ceiling to be a partner of say the Giants/Jets, Dallas Cowboys or Washington Nationals.
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"We literally see very little benefit from just pure naming rights," said McDonald. "An advertised brand like Capital One, we have 99 percent national brand name awareness. The one percent must be hillbillies lost somewhere in the mountains. Our brand name is out there. So simply paying to get your name out there versus telling a story, being able to do product news advertising, being able to showcase sponsorship properties. It's just not a real efficient buy and we would in fact buy something we already got a ton of."
But that's not all McDonald had to say. In addition to not really reaching the public with just mentions on TV broadcasts or radiocasts, teams just want too much money for the right to plaster the name onto a building.
"The second thing is, a few deals have gone down that have taken the price to incredible levels to where that might make sense for that sponsor but it does not price the market," he said. "So for our money, we have had a lot of places to invest than pure naming rights."
Companies seem to be much smarter in that sense than baseball or hockey teams were in the past. A mediocre player could set the marketplace because one owner gave him a huge deal. Players would similar stats would ask for similar money and other owners thinking that a mediocre player is important would match the salary either in free agency or keeping a player on the team happy.
In the National Hockey League in the late 1980s, agents convinced general managers that their client was a quarter good as Wayne Gretzky who had one year scored 92 goals and that the player should get a quarter of Gretzky's salary. The general manager agreed. There were a lot of 21-22-23-24 goal scorers who got a quarter of Gretzky's salary and that drove up player costs in the NHL.
Companies are not giving big money for naming rights.
One of the most recent deals that was announced in late July was an agreement between the Jacksonville, Florida-based EverBank and the National Football League's Jacksonville Jaguars. Wayne Weaver's team will get $16.6 million over five years — or nearly half of what the Giants-Jets owners wanted for one season.
Capital Bank is doing business near Jacksonville as the title sponsor of what used to be called the Citrus Bowl in Orlando. It is a multi-year, multi-faceted agreement that McDonald explained is better suited for his bank.
"We are a bowl, that one was interesting because that bowl wasn't just a naming-rights deal," said McDonald. "It's in Orlando, it's the Capital One Bowl and we have a very intricate relationship with the Florida Citrus Sports Foundation. It is community, it is philanthropy, it is kids and it is the city of Orlando. But it is the linchpin to Capital One Bowl Week, the Capital One mascot promotion and an all encompassing college sports-football program that literally led to why not just football? Let's go to NCAA championships and let's launch the Capital One Cup."
The Capital One Cup is a relatively cheap expenditure for the bank and a trophy with the bank's name will be giving to the best overall college sports program in Division 1.
"It is basically self-created; all of dollars in are our media dollars that we would utilize to get the word out. I won't go into specific budgets. But also it is not a black and white spend on the Cup, spend on a product. We tend to weave Cup messaging through billboards, through players of the game, through Capital One Cup moments. So it is more integrated marketing versus an isolation message of nothing but the Cup," said McDonald.
There could one day be a naming-rights partner in East Rutherford, Arlington and Washington as well as New Orleans, Oakland and other venues that lack a corporate name but the days of just buying a name are done. But reinventing ways of selling a stadium name has gone on for nearly six decades. In 1953, St. Louis Browns owner Bill Veeck sold the Browns-owned Sportsmen's Park to St. Louis Cardinals owner and beer baron August Busch Jr. Busch wanted to name the ballpark Budweiser Stadium after his best-selling beer.
National League owners said no and the stadium simply became Busch Stadium. In 1955, Anheuser-Busch introduced the Busch Bavarian label and the stadium's name remained Busch Stadium. Another Anheuser-Busch product, Land Shark Lager, became a stadium naming rights sponsor for one year in 2009. Land Shark Stadium was the home of the Miami Dolphins, the University of Miami football and the Florida Marlins Major League Baseball team.
Sports organizations can be creative.
"Absolutely not," said McDonald when asked if the naming rights agreements are a thing of the past. "I think it will simply reinvent itself. If the sponsorship or naming rights is fairly simple, get your name out there — there is a limited pool of advertisers. Imagine, does Coca Cola need to name a stadium?
"No. It is the most ubiquitous global brand there is. So the name of the game if people have sponsorships need to move. They need dramatically to value up. And advertising such as myself, marketers, are very good at rooting out the bang for the buck. We look at hard media value, we look at sponsorship value and then we will place a value on the intangibles but the days of stick my name on the stadium and have that be worth a ton are probably over."
That is not exactly the news that the Mara-Tisch-Johnson collaboration wants to here but the New Meadowlands Stadium has been open for a few months and no one has put up a shingle with a corporate logo on the sides of the building yet.
Evan Weiner is an award winning author, radio-TV commentator and speaking on "The Business and Sports of Politics" and can be reached at firstname.lastname@example.org