The idea that buying naming rights to a sports venue is a massive waste of money is nothing new — Chris Isidore of CNNMoney noted way back in 2003 that businesses with naming-rights deals had an alarming tendency to go bankrupt — but now there’s evidence to back it up. New York magazine spoke with marketing professor J. Scott Armstrong, who noted that sponsorship deals of all kinds have been found to have no significant correlation with more people actually buying your product, even just out of name recognition. And in particular, naming-rights deals “do not have a lasting impact on the profitability of the firms that buy them.”
So, why on earth buy them? Aren’t corporate tycoons supposed to be profit-maximizing machines, stopping at nothing to evaluate every action coldly in terms of return on investment? Spake Armstrong:
“People who are running the company feel good about it — and this is just speculation, of course — they feel important, I imagine,” he said.
In other words, if you work for a company looking to buy naming rights, it’s simply cool to have an association with the NBA or the NFL or a snazzy new stadium, and in some cases it can lead to tangible benefits like hanging out with celebrities or attending playoff games. “I think they just assume it’s going to [work], and it’s a fun project to get involved with,” Armstrong explained. This can help explain the response he’s gotten when he’s queried employees of companies directly as to whether they try to calculate the return on investment on their sponsorship deals: “Nah, we don’t do that.”
On the one hand, it’s lucky that corporate marketing execs are so daft, because naming-rights deals have helped make new stadiums a hell of a lot more affordable in recent years without dipping quite as far into the public purse. (This is assuming that you think making it more affordable to tear down 20-year-old stadiums and build new ones is a good thing, big-picture speaking.) On the other, if you’re an employee of, say, the University of Phoenix who’s being told there’s no money to give you a raise because the university is in a death spiral of red ink, you might consider giving up on making a case that you deserve it, and instead argue that you’re “a fun project to get involved with.”
The Texas Rangers announced yesterday that they’d sold the naming rights to the Ballpark at Arlington (formerly Ameriquest Field, until Ameriquest broke the economy and went belly-up) for an unknown sum, and that the stadium would henceforth be known as “Globe Life Park in Arlington.” Which is one of the worst names for anything ever — the Fort Worth Star Telegram helpfully noted that “fan reaction to the new name on social media sites ranged from unimpressed to outraged, with comments such as ‘barf,’ ‘lame’ and ‘at least they kept Arlington in the name’” — or at least was, until this a couple of hours later:
The New Orleans Pelicans and Louisiana-based Smoothie King have reached a 10-year agreement to rename the New Orleans Arena as the Smoothie King Center.
On the bright side, at least it’s clear what a Smoothie King sells, unlike a Globe Life. Still, it’s getting increasingly hard to see why anyone should be using these branded names for buildings, since they change about as often as soccer jersey logos. (Thankfully, no one has tried to insist that we call them “Qatar Airways FC Barcelona.” Yet.) It’s easy enough to call the Rangers’ ballpark “the Rangers’ ballpark” (in fact, it’s officially been “The Rangers Ballpark in Arlington” the last few years, not that I’ve noticed), call the New Orleans arena “the New Orleans Arena,” and so on. At least until the teams give us a cut of the product-placement moolah. Hey, New York City’s transit agency does it!
The controversy over Florida Atlantic University selling its football stadium naming rights to a for-profit prison company being sued for human rights violations just gets better and better: Now it appears that the GEO Group (formerly Wackenhut) has had one of its corporate relations executives edit the company’s Wikipedia page to eliminate all mentions of mistreatment of prisoners at its facilities:
A section on the Wikipedia page entitled “controversies,” which listed state and federal investigations and lawsuits claiming mistreatment of prisoners in GEO facilities, had disappeared. In its place was a new section, headlined “Quality of Operations,” which duplicated language in company filings with the Securities and Exchange Commission.
This being Wikipedia, the offending “Controversies” section was soon restored. And what exactly did GEO Group want hidden from the public? Some samples:
- “Between 2005 and 2009, at least eight people had died at the Geo Group-operated George W. Hill Correctional Facility in Delaware County, Pennsylvania, the state’s only privately run jail. Several of those deaths resulted in lawsuits by family members who say the facility did not provide adequate medical care or proper supervision for offenders. On December 31, 2008, Geo pulled out of operations at this facility, ‘citing underperformance and frequent litigations’ as the reasons.”
- “In November 2010 plaintiffs filed a federal lawsuit against the agencies that operate and own the Walnut Grove Youth Correctional Facility, saying that the prison authorities allowed abuses and negligence to occur at the facility. The lawsuit states that prison guards engaged in sexual intercourse with the prisoners and smuggled illegal drugs into the facilities, and that prison authorities denied education and medical care. As of that month the prison has about 1,200 prisoners ages 13–22; the lawsuit says that half of the prisoners are incarcerated for nonviolent offenses.”
Also, from the Huffington Post article reporting on the Wikipedia mess, we learn that
The company has been at the center of several controversies across the U.S., including at a youth detention center in Texas, which was shut down after state inspectors said they found “filthy” and “unsafe” conditions that included feces on walls. Several riots erupted at a GEO-operated federal prison in west Texas that housed mostly undocumented immigrants in 2008 and 2009, following the death of an epileptic inmate who had been left in isolation despite pleas for help.
All charges that weren’t getting much attention until GEO pulled its one-two punch of trying to buy a higher profile via stadium naming rights, and trying to expunge its record on the web. It’s always possible that five years from now, everyone will have forgotten this and just think of GEO as “that company that has its name on the stadium of some minor Florida college’s football stadium,” but right now the whole deal is testing the proposition that there’s no such thing as bad publicity.
I know somebody’s going to ask about the university that sold its stadium naming rights to a for-profit prison company, so: A university has sold its stadium naming rights to a for-profit prison company. Namely Florida Atlantic University, which completed a new $70 million football stadium in 2011, has agreed to rename the building GEO Group Stadium for the next 12 years in exchange for a $6 million, ahem, “philanthropic donation.” GEO Group runs $3 billion worth of prisons in the U.S., Australia, South Africa, and the U.K., and is current being sued for human rights abuses against inmates.
The obvious jokes and student protests aside, the most interesting things here are that Sun Belt Conference naming rights aren’t worth much ($500,000 a year is a pittance compared to pretty much any pro sports naming-rights deal), and that this opens up a whole new realm of companies buying stadium names not so much as a way of getting publicity, but as a way of countering bad publicity. (Recall that GEO changed its name from Wackenhut ten years ago, in part to get away from the stench associated with that company name.) I hope we can now look forward to the Goldman Sachs Dome, Kim Jong-Un Stadium, and the Oscar Pistorius Bowl as people realize the benefits of distancing yourself from accusations of wrongdoing by associating yourself with something more wholesome like … American college football?
The MetLife naming-rights deal for the New York Jets and Giants stadium is now official, with a 25-year agreement worth a reported $17 to 20 million a year. It’s unclear whether this means the payments vary, or news reports are just guessing about the amount — or, for that matter, whether the dollar figures are based on anything other than previously reported guesses.
This is actually an upgrade for MetLife, which previously was paying $7 million a year for advertising rights to a corner of the stadium. Instead, it will now get not only the name of the stadium (which will host the 2014 Super Bowl), but “120,000 square feet of branded space at the stadium’s main entrance,” according to the Newark Star-Ledger.
The uncertainty over the price and the inclusion of ad space at the entrance makes it tough to compare the dollar figures here to other naming-rights deals, but it’s fair to say that this is a sign that the naming-rights market is returning to life, after most corporations sat it out the last few years during the recession. (With some notable exceptions.) As MetLife chief marketing officer Beth Hirschhorn explained her company’s big buy: “MetLife has near ubiquitous brand awareness. This helps raise our top of mindedness.” Not to mention their neologismshare.
The New York Post is reporting that the New York Jets‘ and Giants‘ year-old home will become MetLife Stadium under the terms of a naming-rights deal to be announced in the next week. According to the paper, MetLife’s payments “could range as high as $20 million year for 20 years” — though of course, we’ve heard that before.
The main interest here is that, if true, it means that the market for naming rights has rebounded a bit after the economic collapse, which would seem to bode well for other teams (or cities) trying to raise funds by selling their stadium name. At least, if your city is the largest media market in the U.S., and your stadium has two NFL teams playing in it.
European sports leagues are usually outside this site’s purview, but sometimes we just have to take notice: For example, when the Newcastle United football team (that’s soccer to you North American readers) announces that it’s signed a naming rights deal to rename its 117-year-old St. James’ Park to “sportsdirect.com@St James’ Park Stadium” for the remainder of the season. The cost to the online sportswear merchant: Absolutely nothing, as the new name is being used to “showcase” the park’s naming rights for a more long-term sale next summer. And did we mention that Newcastle owner Mike Ashley is also owner of Sports Direct?
So far British fans and the media have mostly reacted by pointing and laughing, with Telegraph columnist Jim White writing that compared to this, “FC Dallas‘s Pizza Hut Park is a beacon of understatement.” Okay, pointing, laughing, and trying to form a fan cooperative to buy out out Ashley and turn the team into a community-owned club like in Madrid and Barcelona. Because we all know those Europeans are a bunch of socialists.
The ever-evolving naming-rights market took a new turn yesterday with the announcement that the New York Giants have struck a $35 million, 15-year deal to rename their new practice facility the Timex Performance Center — as part of which the team will wear a Timex patch on the left shoulder of their practice jerseys. The NFL recently okayed corporate logos on practice uniforms only, though you have to wonder if it’s a slippery slope that’s inevitably headed toward this.
In a Newsday column mostly about the lagging naming-rights market — both the Dallas Cowboys stadium opening this year and the New York Giants and Jets stadium opening in 2010 still haven’t found buyers for their stadium names — sports business writer Neil Best reveals this tidbit as well:
The Giants are further along in their sales process but still have personal-seat licenses available at club levels for $20,000, $12,500 and $7,500 &mdash ones that come with game tickets at $700, $500 and $400.
Johnson and Mara expressed confidence that they will be sold out before the 2010 openers. But Mara confirmed that the Giants have moved through their notoriously long waiting list and that tickets now are available to the public.
What this means is that at least 60,000 Giants fans have been offered the chance to buy season tickets at the new place, and replied, “Not at those prices.” See why I’m concerned for Santa Clara?
Bank of America won’t become the Adidas of the new Yankee Stadium after all: Talks with the New York Yankees about slapping the government-bailed-out bank’s name all over the place have been terminated. The Yanks aren’t commenting on how this will affect their finances, but you know it’s gotta hurt, so if you have $20 million a year to throw around and a burning desire to see your logo affixed to light fixtures and bullpen canopies, give Lonn Trost a call.
Also, expect this to be one of the last links to a Newsday story you see here, as Cablevision, the newspaper’s owner, has announced plans to start charging for its online content, possibly as part of some kind of cable TV package. While I think that some kind of subscription (or membership) fees will ultimately be needed to help keep professional journalism alive in the digital age, still, good luck to them with that.