Students were discussing team sports being a multibillion-dollar business in America, and the construction of new stadiums as a pricey undertaking. In addition, many college sports facilities have also sold their naming rights, including naming stadiums for companies as a form of sponsorship. Students were asked, “What is your personal opinion of this type of sponsorship? Is it worth the high cost? Does it impact an individual’s attitude towards a brand and his or her purchase decisions?”
Here is Harrison Stackpoole’s response:
On the whole, naming rights for athletic venues appears to be a great source of revenue for a host team.
Locally, research indicates that Ford Motor Company is committed to pay approximately $1 million dollars per year through 2042 for the naming rights for the home of the Detroit Lions (coincidentally owned by the Ford family), while Comerica Bank has agreed to dole out $2.2 million per year through 2030 for the naming rights for the facility that houses the Detroit Tigers. Record deals were inked when Citi Group agreed to a $20 million per year for twenty years for the baseball stadium where the New York mets play, and a similar deal for a smaller facility was made by Barclay’s Bank for the Brooklyn based arena that is the home for both the Brooklyn Nets and New York Islanders.
Historically, naming rights as we currently use them, date back to the early 1950’s when the Busch family purchased the St. Louis Cardinals and wanted to re-name Sportsman’s Park “Budweiser Stadium”. The National League president had objections to naming a facility after an alcohol based product, but compromised and let the owners name the facility Busch Stadium. Soon after, Budwesier started making a product called “Busch Bavarian Beer” in an effort to make use of the change. Subsequent incarnations of the baseball stadium in St. Louis have kept the name alive, and the beer product has morphed into the Busch and Busch Light product lines.
Not all naming rights deals have proven to be successes. In 1999, the Houston Astros thought they had a sweet $100 million, thirty year deal when they sold the naming rights for their new facility to Enron, whose chairman threw out the very first ceremonial pitch when the ballpark opened in 2000. Soon there after, Enron (an energy company) was embroiled in a huge scandal that ultimately lead to the companies demise (chairman Ken Lay wound up doing some jail time) and the Astros, in order to save face, had to buy the naming rights back for $2.1 million. Fortunately, things ended well as the team was able to re-sell the rights to Minute Maid under very similar terms as the Enron deal.
Similar situations have befallen the Tennessee Titans,(who played in the Adelphia Coliseum until that company went bankrupt due to to massive internal corruption) and both the Miami Dolphins and Marlins who played in Pro Player Stadium, a division of Fruit of the Loom that had to be liquidated after the parent companies bankruptcy in 1999 (the teams were “stuck” with the name until 2005).
College teams are not immune from making unfortunate decisions as well. Villanova University’s new (in 1986) basketball arena was named in honor of John DuPont (who help fund the construction). Unfortunately, in 1996, DuPont, a paranoid schizophrenic, committed murder, forcing the school to change the name of the facility to “The Pavilion”. Florida International University thought that they had landed a fantastic deal when GEO Group, a company that ran private prisons, agreed to pay for the naming rights to the Owl’s football stadium. The local press immediately seized upon the opportunity to nickname the facility “Owlcatraz” and the deal soon fizzled out.
Again, the ability for facilities to generate extra revenue via naming rights is, on the whole, a sound idea. The negative examples cited should, however, at a minimum call, for the contracting parties to have some measure of “wiggle room” in the event that financial ruin, controversy or embarrassment inadvertently befalls the relationship.
Trex, E (November 27, 2008), A Brief History of Naming Rights, Mental Floss, accessed at http://metalfloss.com/article/20239/brief-history-stadium-naming-rights
Author Unknown (January 14, 2015; updated September 29, 2015), Stadium Naming Rights, ESPN.com Sports Business, accessed at http://espn.go.com/sportsbusiness/s/stadiumnames.html