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Whats in a name
What's in a stadium name?
Plenty of recognition for sponsor
Jonathan J. Higuera
The Arizona Republic
Jul. 23, 2006 12:00 AM
The Arizona Cardinals' wait for a new stadium is just about over, but they'll have to show a little more patience to land a multimillion-dollar corporate naming rights deal.
It's an important source of revenue to the team. The Cardinals would rather have an agreement in place sooner rather than later and actively are talking to several companies about acquiring the rights to the $355 million facility.
"We're not going to make any deal," Cardinals spokesman Mark Dalton said. "We want to get the best deal for the long term."
Cardinals officials won't discuss which companies they are talking to or what they are seeking in any agreement. But they and other sports marketing experts acknowledge the final value should be enhanced by the fact that college football will hold its national championship game at the stadium in January, the Super Bowl will be played there in 2008 and other major events, including a possible Final Four men's college basketball event, will be held there.
"It's not uncommon in evaluating a deal to have special events of one kind or another factored into the value," said Don Hinchey, vice president for the Bonham Group, a sports consulting group based in Denver.
The Bonham Group has been involved in 10 naming rights deals and helps teams and corporations analyze the value of those deals.
Cardinal officials point to the Seattle Seahawks stadium, now called Qwest Field. That stadium was completed and opened in 2002, but it didn't become Qwest Field until 2004.
Glendale Arena, home of the Valley's professional hockey team, the Phoenix Coyotes since 2003, still hasn't consummated a naming rights deal.
"There is only a relatively small number of naming rights opportunities at any one time," Hinchey said. "And they are being picked up as highly prized marketing opportunities.
"We're talking big-ticket deals. It's not an impulse buy," he said.
The lack of naming rights partner may have already cost the Cardinals revenue, says David Broughton, research director at Sports Business Journal, a trade covering sports business.
"Six of the last seven NFL stadiums have opened with a corporate name already on it," Broughton said. "It's a technologically interesting building.
"A company should have had their name on it years ago . . . Long term, somebody lost out on a couple of years of exposure."
Big deals
In the National Football League, naming rights revenues are not subject to the league's revenue-sharing agreement and thus have become an even more valuable income stream for the teams involved.
The biggest NFL deals to date were completed in 2000 and 1999. Reliant Stadium where the Houston Texans play, which cost Reliant Energy about $10 million a year for 32 years. The naming rights extend to three other facilities, including the Reliant Astrodome.
In 1999, FedEx Corp. paid $205 million for 27 years for the naming rights to the Washington Redskins home field in Landover, Md.
The market has cooled a bit since then, and some are wondering if the Cardinals will be able to match recent NFL naming rights deals such as the 10-year, $30 million deal the Tennessee Titans reached with Louisiana-Pacific Corp., a maker of building products in Nashville. It will pay $3 million annually to call the Titans' stadium LP Field.
It also may not be able to match the $122 million, 20-year deal, or about $6 million a year, the Indianapolis Colts reached with Lucas Oil earlier this year to call its new field Lucas Oil Stadium. That stadium is scheduled to be completed in 2008.
The Cardinals have not had the on-the-field success of those two teams, but the media exposure and buzz its new facility and the Valley's growth may have some companies interested.
Other factors could keep it from being the kind of blockbuster deal on the level of Houston or Washington, D.C.
For one, metro Phoenix ranks as the 14th-largest metro area in the nation, compared with seventh and eighth for Houston and D.C. Also, Cardinals fan attendance ranked last out of 32 teams in 2005.
Who's in play?
The price of these deals depends on several factors, including the prestige of an organization, the size of the market and the desire by any corporation to make a heavy marketing investment in that area.
For many of the companies, the deals are more than just a straight advertising play. For example, the Seahawks-Qwest deal requires the Seahawks to use Qwest telecommunications service. Other ventures owned by business ventures involving Seahawks owner Paul Allen also could be required to use Qwest services.
The Valley's relative lack of corporate headquarters makes it less likely for a local company to buy the rights.
Of the 16 naming rights deals for NFL stadiums, all the corporations have revenues in the billions. For example, the Detroit Lions play at Ford Field and the Carolina Panthers play at Bank of America Stadium. Both of those corporations are based in those cities.
Across the NFL naming rights deals are dominated by financial firms (Lincoln Financial, Edward Jones, Raymond Jones, Invesco), energy industry firms (Reliant Energy, Lucas Oil) and telecommunications companies (Qwest, Alltel).
In the Cardinals' case, no companies have come to light as potential candidates, but that company could surface from anywhere.
Several local firms with strong sports advertising and promotions budgets have ruled themselves out. Both Arizona Public Service Co. and Salt River Project said they are not pursuing naming rights deals for Cardinals Stadium.
APS has come under fire this past year for seeking rate increases while spending millions for advertising and promotional deals with local sports franchises. SRP already spends more than a half-million dollars annually on advertising and promotions deals with the Cardinals.
"When you look at why a company might be interested, you think of a company that wants to go from zero to 60 miles per hour and immediately make a big splash in the local community," said Scott Harelson, an SRP spokesman. "We have the equity of 100 years of being around here, so there's not that urgency."
Fresh candidates
Greg Fisher, a partner in Campbell Fisher Design, a Phoenix sports marketing firm, said that there are marketing metrics that show the number of mentions an arena or stadium gets is much more than it could ever buy on an individual basis.
"I don't know if you can ever replace that kind of media exposure with PR," Fisher said. "It's a good long-term play."
But the return on investment can be a tricky thing to calculate, says Sports Business Journal's Broughton.
"The real question isn't exposure or impressions, but how does that translate into people going out and buying your product."
With new national and international corporations stepping into the picture, they've apparently found it to be an effective strategy. Just last week, Honda announced its first sports naming rights deal for the Arrowhead Pond in Anaheim.
It's also a good long-term play for the team, which benefits from an immediate revenue boost. That revenue can be used to help a team land marquee players, improve its facilities or any other way it deems important.
In retrospect, the $26 million, 30-year agreement originally made by America West Airlines, which has since become US Airways, for naming rights to the Phoenix Suns home arena in 1992 seems like quite a bargain.
A new 10-year deal was renegotiated last year after the airlines' merger. Terms were not disclosed.
Reach the reporter at jonathan.higuera@arizonarepublic.com.
What's in a stadium name?
Plenty of recognition for sponsor
Jonathan J. Higuera
The Arizona Republic
Jul. 23, 2006 12:00 AM
The Arizona Cardinals' wait for a new stadium is just about over, but they'll have to show a little more patience to land a multimillion-dollar corporate naming rights deal.
It's an important source of revenue to the team. The Cardinals would rather have an agreement in place sooner rather than later and actively are talking to several companies about acquiring the rights to the $355 million facility.
"We're not going to make any deal," Cardinals spokesman Mark Dalton said. "We want to get the best deal for the long term."
Cardinals officials won't discuss which companies they are talking to or what they are seeking in any agreement. But they and other sports marketing experts acknowledge the final value should be enhanced by the fact that college football will hold its national championship game at the stadium in January, the Super Bowl will be played there in 2008 and other major events, including a possible Final Four men's college basketball event, will be held there.
"It's not uncommon in evaluating a deal to have special events of one kind or another factored into the value," said Don Hinchey, vice president for the Bonham Group, a sports consulting group based in Denver.
The Bonham Group has been involved in 10 naming rights deals and helps teams and corporations analyze the value of those deals.
Cardinal officials point to the Seattle Seahawks stadium, now called Qwest Field. That stadium was completed and opened in 2002, but it didn't become Qwest Field until 2004.
Glendale Arena, home of the Valley's professional hockey team, the Phoenix Coyotes since 2003, still hasn't consummated a naming rights deal.
"There is only a relatively small number of naming rights opportunities at any one time," Hinchey said. "And they are being picked up as highly prized marketing opportunities.
"We're talking big-ticket deals. It's not an impulse buy," he said.
The lack of naming rights partner may have already cost the Cardinals revenue, says David Broughton, research director at Sports Business Journal, a trade covering sports business.
"Six of the last seven NFL stadiums have opened with a corporate name already on it," Broughton said. "It's a technologically interesting building.
"A company should have had their name on it years ago . . . Long term, somebody lost out on a couple of years of exposure."
Big deals
In the National Football League, naming rights revenues are not subject to the league's revenue-sharing agreement and thus have become an even more valuable income stream for the teams involved.
The biggest NFL deals to date were completed in 2000 and 1999. Reliant Stadium where the Houston Texans play, which cost Reliant Energy about $10 million a year for 32 years. The naming rights extend to three other facilities, including the Reliant Astrodome.
In 1999, FedEx Corp. paid $205 million for 27 years for the naming rights to the Washington Redskins home field in Landover, Md.
The market has cooled a bit since then, and some are wondering if the Cardinals will be able to match recent NFL naming rights deals such as the 10-year, $30 million deal the Tennessee Titans reached with Louisiana-Pacific Corp., a maker of building products in Nashville. It will pay $3 million annually to call the Titans' stadium LP Field.
It also may not be able to match the $122 million, 20-year deal, or about $6 million a year, the Indianapolis Colts reached with Lucas Oil earlier this year to call its new field Lucas Oil Stadium. That stadium is scheduled to be completed in 2008.
The Cardinals have not had the on-the-field success of those two teams, but the media exposure and buzz its new facility and the Valley's growth may have some companies interested.
Other factors could keep it from being the kind of blockbuster deal on the level of Houston or Washington, D.C.
For one, metro Phoenix ranks as the 14th-largest metro area in the nation, compared with seventh and eighth for Houston and D.C. Also, Cardinals fan attendance ranked last out of 32 teams in 2005.
Who's in play?
The price of these deals depends on several factors, including the prestige of an organization, the size of the market and the desire by any corporation to make a heavy marketing investment in that area.
For many of the companies, the deals are more than just a straight advertising play. For example, the Seahawks-Qwest deal requires the Seahawks to use Qwest telecommunications service. Other ventures owned by business ventures involving Seahawks owner Paul Allen also could be required to use Qwest services.
The Valley's relative lack of corporate headquarters makes it less likely for a local company to buy the rights.
Of the 16 naming rights deals for NFL stadiums, all the corporations have revenues in the billions. For example, the Detroit Lions play at Ford Field and the Carolina Panthers play at Bank of America Stadium. Both of those corporations are based in those cities.
Across the NFL naming rights deals are dominated by financial firms (Lincoln Financial, Edward Jones, Raymond Jones, Invesco), energy industry firms (Reliant Energy, Lucas Oil) and telecommunications companies (Qwest, Alltel).
In the Cardinals' case, no companies have come to light as potential candidates, but that company could surface from anywhere.
Several local firms with strong sports advertising and promotions budgets have ruled themselves out. Both Arizona Public Service Co. and Salt River Project said they are not pursuing naming rights deals for Cardinals Stadium.
APS has come under fire this past year for seeking rate increases while spending millions for advertising and promotional deals with local sports franchises. SRP already spends more than a half-million dollars annually on advertising and promotions deals with the Cardinals.
"When you look at why a company might be interested, you think of a company that wants to go from zero to 60 miles per hour and immediately make a big splash in the local community," said Scott Harelson, an SRP spokesman. "We have the equity of 100 years of being around here, so there's not that urgency."
Fresh candidates
Greg Fisher, a partner in Campbell Fisher Design, a Phoenix sports marketing firm, said that there are marketing metrics that show the number of mentions an arena or stadium gets is much more than it could ever buy on an individual basis.
"I don't know if you can ever replace that kind of media exposure with PR," Fisher said. "It's a good long-term play."
But the return on investment can be a tricky thing to calculate, says Sports Business Journal's Broughton.
"The real question isn't exposure or impressions, but how does that translate into people going out and buying your product."
With new national and international corporations stepping into the picture, they've apparently found it to be an effective strategy. Just last week, Honda announced its first sports naming rights deal for the Arrowhead Pond in Anaheim.
It's also a good long-term play for the team, which benefits from an immediate revenue boost. That revenue can be used to help a team land marquee players, improve its facilities or any other way it deems important.
In retrospect, the $26 million, 30-year agreement originally made by America West Airlines, which has since become US Airways, for naming rights to the Phoenix Suns home arena in 1992 seems like quite a bargain.
A new 10-year deal was renegotiated last year after the airlines' merger. Terms were not disclosed.
Reach the reporter at jonathan.higuera@arizonarepublic.com.