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Are NFL Stadium Naming Rights Worth It?

Scot Chartrand

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Data suggests that beauty is in the eye of the beholder.

Mercedes-Benz’s deal with the Falcons extends for 27 years. (Photo via Adam White)


Over the last several years, we have heard companies announce sponsorship of an NFL team’s new or existing stadium. We stop to think if the name goes well with the team and region, whether it upends or creates new tradition, and lastly, take note of the large sum that went into securing those rights.

The transactions garner headlines at first but less attention is paid in looking back on how the deals fare for both parties later. Many other perks fall in line with the deals beyond just the stadium name as well.

HOW NAMING RIGHTS BECAME A THING

Two of the earliest naming rights deals to involve an NFL stadium originally happened in the AFC East.

The New England Patriots were essentially nomads for most of their early existence beginning tin the AFL. They moved from one college field to the next in the Boston area until the NFL put the thumb on them after the merger in 1971 to find a long-term home.

Schaefer Beer loved putting their name on a lot of things. The company had deep advertising roots in the 20th century from the 1939 World’s Fair to a prominent sign at Ebbets Field in Brooklyn.

Schaefer Stadium under construction in Foxboro — photo via Providence Journal

At the last minute, then Patriots owner, Billy Sullivan, struck a deal to move down U.S. 1 to Foxboro and construct a $6.7 million stadium with 25% of it financed by $1.46 million from Schaefer Beer to see their name on the stadium over the 12 years.

Football was saved in New England, and we had the first stadium sponsorship as a reason for it.

Never heard of Schaefer Beer? You’re likely not alone, unless you’re 50 or older. The New York company moved from a well-known brand in the 1970s to a niche brand operated by Pabst.

Oddly enough, after the deal expired, the stadium was renamed in Sullivan’s honor as Sullivan Stadium in the 80s and 90s.

Today’s home of the Patriots, Gillette Stadium (named after razor company that is a rival to former owner Victor Kiam’s Remington shavers), is just a small jaunt down the road from that stadium. Gillette, itself, only took over naming rights after the original sponsor for the new stadium, CMGI, went bankrupt shortly into the deal.

Two years later, the Buffalo Bills had a pressing need to relocate from old War Memorial Stadium as terms of the 1970 AFC-NFC Merger mandated that teams have a stadium that could hold 50,000 fans (War Memorial held 49,000). Sounds familiar, right?

Rich Stadium postcard

In order to build a new stadium, Bills owner Ralph Wilson had to gain political approval for funds and construction. He also flirted with moving the team to untapped markets like Seattle right in the middle of the Electric Company and O.J. Simpson era.

In securing a plan to stay in Western New York and the suburb of Orchard Park where the Bills play to this day, several options were presented to the Erie County legislature for approval.

One proposal that included Rich Products Corp. footing $1.5 million of stadium cost through naming rights over 25 years was chosen by the local legislature over a competing plan by Ralph Wilson to make up that amount himself to not name the stadium.

This deal was less civil than that of the Patriots, as Ralph Wilson fought the naming of the facility by Rich Products Corp. tooth and nail for a decade according to a piece written by Mark Byrnes at CityLab.

After losing the battle on stadium naming rights, Wilson spent a decade trying to keep the name of the company out of fan’s ears through the media, ticketing, and almost anywhere else. He finally relented in the early 80s and Rich Stadium became treated like any other stadium’s name.

Ultimately, when a new lease was agreed to in 1998, the old grudge was resolved when stadium went from Rich Stadium to Ralph Wilson Stadium in an ironic and fitting twist.


RESEARCH ON THE VALUE OF SECURING NAMING RIGHTS

While examples like these were more common in the 1970s to help fill gaps in additional funds needed for stadium construction projects and for gaining political approval, they’ve changed to a valuable source of revenue for many franchises in today’s NFL.

They also are purported to serve a valuable purpose for the companies that lend their names.

Michael Leeds is a sports economist at Temple University, and he conducted a study published as “A Stadium By Any Other Name. The Value of Naming Rights.” based on 25 years worth of data attempting to measure sponsorship’s impact on overall stock price. His study saw things a bit differently.

The study noted that as late as 1990, very few stadiums (and none in baseball) held a corporate name. Turn the clock forward to 2001, and a majority of stadiums held corporate names — including half of football stadiums.

The research noted that five NFL stadiums even gave up their names through 2004 due to financial distress or bankruptcy:

  • Adelphia Coliseum in Nashville
  • Pro Player Stadium in Miami
  • PSINet Stadium in Baltimore
  • 3-Com Field in San Francisco
  • Trans World Dome in St. Louis

In the exact words of the study:

“We find little evidence that the purchase of naming rights had a statistically, significant impact on the value of the companies that bought them, even less evidence that the impact was positive, and no evidence at all that there was a permanent, positive impact.”

Perhaps lifting the entire stock price is too tall an order for such a deal. Maybe there are other intrinsic benefits. To find the answer to that question, it’s valuable to look inside specific stadium deals.


RECENT NAMING RIGHTS DEALS

More recently, teams have found greater success with longer-term partners in naming rights. Below are a select few from the last decade:


It’s also worth noting that several naming rights deals have terms that are not publicly disclosed. Much of the data referenced in this piece around naming rights deals comes from research conducted by SportsPro Media.

Now, let’s dig into a few of the deals.

The Dolphins struggled for years to find a stable naming partner for, what initially, was the first modern stadium to be completely, privately financed — Joe Robbie Stadium. The stadium, built in 1987, moved from being named after Pro Player apparel (which went bankrupt) to LandShark beer to SunLife Financial.

The moving target of seven name changes and the affinity for the team’s legendary owner, Joe Robbie, provided fuel for fans to continue to refer to the building as “The Stadium formerly known as Joe Robbie” to this day.

In 2016, in conjunction with a two-year renovation project that added a partial roof (meaning shade for fans) to the stadium, the team finally struck a long-term deal with Hard Rock International — owners of the Hard Rock Café restaurant chain.

Photo via Hard Rock Stadium

The Dolphins had finally struck gold. Hard Rock not only gained the name on the building, but it received other economic and visibility benefits as well. Hard Rock became the Miami Dolphins’ “official (team) hotel and resort, casual restaurant partner and hospitality sponsor” according to team press release at the time. Additional ads were also to be placed on the renovated stadium — including on the top of the roof — with sponsoring of the pregame area by Hard Rock.

The deal was unique in that the company did not have a strong local tie beyond operation of the nearby Seminole Hard Rock Casino in Hollywood, Florida. However, with a Super Bowl and many national events on the way, the deal fits a more national brand.

The stadium in Miami (unlike many other areas in Florida) was very fortunate to only have minor damage done to the facility very recently as a result of Hurricane Irma, but the Louisiana Superdome in New Orleans and the surrounding region was not so lucky when it came to Hurricane Katrina in 2005.

The team temporarily played games in Baton Rouge and San Antonio to get by, and the future of the franchise in the Crescent City was in jeopardy to where the State of Louisiana had to step in to help keep the team around short term.

The Saints’ deal with Mercedes-Benz to name the Superdome was instrumental in freeing the team from financial obligation from the State of Louisiana by acquiring enough revenue to get the organization back on their feet. The deal didn’t just buy a name; it also bought goodwill.

When Mercedes-Benz also purchased the rights to the longtime rival of the Saints, the Atlanta Falcons’ stadium, Saints president Dennis Lauscha was quick to stress that the company tipped the team off before the move and reiterated how happy both parties were with the name on the Superdome to ease the potential awkwardness.

He even suggested the team could extend the offer with Mercedes-Benz down the road, “I’m just saying the relationship is very good. We’re very happy, and they’re very happy.”

In Dallas, the Cowboys took years to find a sponsor once “Jerry World” opened and jaws dropped in 2008 under the name of Cowboys Stadium. The team held firm to find the right corporate partner.

While most stadiums seek to find a sponsor as soon as they open, such care was given to the decision that North Texas hosting Super Bowl XLV came and went in 2011 without the team capitalizing on the first major event to find a sponsor.

Finally, in 2013, a large national presence headquartered in Dallas stepped in and secured a deal worth a reported $17–19 million a year for the rights based on information shared by ESPN’s Darren Rovell at the time.

Photo via NBC DFW / KXAS-TV in Dallas-Fort Worth

As part of the accord, AT&T also received signage inside and outside the stadium. Legends Way, outside the stadium, was also changed so that the facility could be located on AT&T Way for mailing purposes. It was even reported that AT&T significantly invested to improve their 4G LTE coverage inside the stadium.

The benefits went beyond the two partners as the City of Arlington was set to receive 5% of the value of the deal to help pay off debt.


MERCEDES-BENZ STADIUM OPENS

Mercedes-Benz Stadium became a new chapter in naming rights deals as the first time a single company served as a sponsor of buildings from teams in the same league, in two different cities.

The Falcons had sought to move on from the Georgia Dome in downtown Atlanta — once even tangentially struck by a tornado during an SEC basketball tournament.

In doing so, the Falcons wanted a long-term arrangement, and Mercedes-Benz saw a natural fit from moving their US headquarters from New Jersey to the Sandy Springs area of Atlanta with a brand new complex earlier this year.

As a part of the teams deal with the city of Atlanta and the Georgia World Congress Center Authority, the Falcons keep all revenue from the deal as reported by the Atlanta Journal-Constitution.

The stadium opened this month with an Atlanta United FC MLS game followed by the Falcons first outdoor home game since 1991 played against the Green Bay Packers to a national audience on Sunday Night Football. With the retractable roof open, the stadium’s Twitter account captured the excitement:

Al Michaels of NBC Sports, called the Falcons game and told the Atlanta Journal-Constitution before the game, “It creates some extra buzz for us and for the league and obviously whoever is building the stadium… I think this stadium is going to televise extremely well… I just hope we can open up the roof and really do it justice.”

Now, major sporting events like the 2018 NCAA Football National Championship game, 2020 NCAA Final Four, and Super Bowl LIII await the benefit of both parties.


NAMING RIGHTS DEALS ON THE HORIZON

One major stadium naming rights deal remains on the horizon with the potential for a few more.

In Los Angeles, the stadium that brought the NFL back to the City of Angels will open in 2020 and already has been speculated to be a likely candidate for a Final Four and the recently awarded 2028 Olympics opening ceremony. Add to that a confirmed awarding of Super Bowl LVI, and the stars are aligned for big things in “The City of Champions.”

It needs a name.

Currently known as Los Angeles Stadium at Hollywood Park, since it sits on the site of the former horse racing track in the suburb of Inglewood, just south of where the Lakers played at the Forum for much of their history. The acquisition of that land and demolition of that structure paved the way for the successful bid to move the Rams back to Los Angeles.

In May, Sports Business Journal reported that the Rams were seeking a floor of $30 million per year naming rights fee that would beat the reported $17–19 million a year for AT&T Stadium in North Texas. The term hoped for is set at 20 years.

Who better to break the record for annual spend for naming rights on a stadium than the current record holder? AT&T has been reported as being presented with a deal with the next step being “their move” according to the trade journal.

Strategically, it is said to make sense as Los Angeles is considered a “priority market” for the company, as also reported by the site. Additionally, much of the staff from AT&T’s entertainment group is said to be relocating to corporate headquarters of the company in Dallas or to newly acquired DirecTV headquarters in nearby El Segundo, California.

Sports Business Journal quoted former executive director of sponsorship at AT&T, Tim McGhee, in noting “Like so many big tech brands, (AT&T) wants to be a content company above all else.”

There will certainly be a lot of content both in the sports and entertainment world to be had in Los Angeles.

The Raiders struck a deal in the offseason to move to Las Vegas, and while that won’t happen until 2020, a stadium built for the team will ultimately need a name as well.

Don Muret, president of Gemini Sports Group in Phoenix, speculated to the same source that a stadium in Las Vegas could receive annual naming rights fees comparable to what the Cowboys have at $15–18 million a year.

One thing to keep an eye on with this story is the potential for a local gaming company to bid on the naming rights as the relationship between that industry and the NFL seem set to evolve in the coming years.

The reason that evolution is important is because the Arizona Cardinals are seeking to renegotiate the naming rights to University of Phoenix Stadium in suburban Glendale.

Gila River Gaming Enterprises, who already sponsor the home of the NHL’s Arizona Coyotes a few steps to the north of where the Cardinals play, have begun talking to the team about becoming the new sponsor according to USA Today. The company, run by the Gila River Indian Community, operates four casinos in the Valley of the Sun.


From study data, partnerships, and other intrinsic benefits claimed from both sides in these deals, it’s possible that the beauty might be in the eye of the beholder.

Either way, publicity can sometimes be its own generator of benefit and past deals certainly don’t seem to damper the hopes and aspirations of future stadium naming deals.

Football fans can expect additional corporate names to be added to their lexicon in the coming years as member clubs, companies, and even some municipalities still see roses over any thorns.


This piece has been presented to you by SMU’s Master of Science in Sport Management.


Front Office Sports is a leading multi-platform publication and industry resource that covers the intersection of business and sports.

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Scot Chartrand is a contributor with Front Office Sports and has worked in program management driving strategic initiatives at a corporate level. He has a passion for helping clients and corporate stakeholders achieve strategic goals while providing change management and optimizing process that drives repeatable results.

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Meet the WNBA’s New Boss

Deloitte CEO Cathy Engelbert will become the first commissioner of the WNBA and the first woman to lead a Big Four professional services firm in the U.S.

Front Office Sports

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Photo Credit: Jennifer Buchanan-USA TODAY Sports

*This piece first appeared in the Front Office Sports Newsletter. Subscribe today and get the news before anyone else.

For the first time ever, the WNBA will have a commissioner. Before now, all of the league’s previous leaders like Val Ackerman and Lisa Borders were given the title of president. 

Cathy Engelbert, the current CEO of Deloitte, will take control of the role on July 17th and will report directly to Adam Silver. 

What should you know?

1. By the time she is done at Deloitte, Engelbert will have spent more time at the company (33 years) than the WNBA has been a league (23 years)

2. Engelbert is the first female to lead a Big Four professional services firm in the U.S.

3. She is the fifth person to lead the league after Val Ackerman (1997-2005), Donna Orender (2005-10), Laurel Richie (2011-15) and Lisa Borders (2016-2018)

4. Engelbert has spent the past four years in charge of Deloitte’s U.S. operation.

Basketball is in her blood…

Although she might be an accountant by trade, Engelbert is no stranger to the game of basketball. 

According to Bob Hille of Sporting News, she played at Lehigh for Hall of Fame coach Muffet McGraw and was a team captain as a senior. Her father Kurt also played and was drafted in 1957 by the Pistons.

What are they saying?

“Cathy is a world-class business leader with a deep connection to women’s basketball, which makes her the ideal person to lead the WNBA into its next phase of growth. The WNBA will benefit significantly from her more than 30 years of business and operational experience including revenue generation, sharp entrepreneurial instincts and proven management abilities.” – Adam Silver on the hiring of Engelbert

“I think that’s probably one of the reasons I was selected for this role, to come in and bring a business plan to build the WNBA into a real business and a thriving business, quite frankly.” – Engelbert to ESPN’s Mechelle Voepel

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Adam Silver Wants More Gender Diversity

The NBA commissioner states his desire to get more women into the sports industry. The NBA currently has a 31.6 percent ratio of women in team management.

Front Office Sports

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Photo Credit: Bob Donnan-USA TODAY Sports

*This piece first appeared in the Front Office Sports Newsletter. Subscribe today and get the news before anyone else. 

If Adam Silver has his way, 50 percent of the new incoming NBA officials will be women.

That number applies to coaches too, Silver said speaking at the Economic Club of Washington.

How do the leagues stack up?

The following numbers, outside of MLB, come from 2018 reports put together by The Institute for Diversity and Ethics in Sports (TIDES) at the University of Central Florida. MLB is the first league to have a report done on it this year.

1. NBA – 31.6% of team management are women / 37.2% of team professional admins are women

2. NFL – 22.1% of team senior admins are women / 35% of team professional admins are women

3. MLB – 28.6% of team senior admins are women / 26% of team professional admins are women

4. MLS – 26.5% of team senior admins are women / 31.6% of team professional admins are women

5. WNBA – 48.6% of team VPs and above are women / 58% of team managers to senior directors are women

6. NHL – No report done

Quotes from Silver… 

“It’s an area, frankly, where I’ve acknowledged that I’m not sure how it was that it remained so male-dominated for so long. Because it’s an area of the game where physically, certainly, there’s no benefit to being a man, as opposed to a woman, when it comes to refereeing.”

“The goal is going forward, it should be roughly 50-50 of new officials entering in the league. Same for coaches, by the way. We have a program, too. There’s no reason why women shouldn’t be coaching men’s basketball.”

That’s not all Silver wants to see change…

Silver, who has been adamant about getting rid of the one-and-done rule, provided some clarity as to when that might be achieved.

According to the commissioner, the 2022 NBA Draft will likely be the first one since the 2005 NBA Draft to allow high school players to go straight into the league rather than playing a season in college first.

Citing “active discussions” with the NBPA, Silver noted that they are still “a few years away.”

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“I Thought This Was a Good Deal”: AAF Vendors Speak Out

Amidst the spring football league’s collapse, countless vendors are still waiting to get paid for services rendered.

Robert Silverman

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Ultimately, it was the little things that best told the story of how dire things had gotten for the Alliance of American Football (AAF), an ex-team social media manager said. Starting in Week Five, social media managers no longer traveled with the team for road games. Even before, they’d doubled up on hotel rooms. The final bit of penny-pinching was the most bizarre: For the eighth and final AAF game, social was told Getty’s photographers would not be in attendance. Instead they would have to rely on “generic images,” making the job vastly more difficult.

Less than a week later, on April 2, the chaotic, short-lived lifespan of the spring professional football league, launched in March 2018 by filmmaker Charlie Ebersol, the son of venerated TV producer Dick Ebersol, came to an abrupt end. A little over two weeks after that, the AAF filed for bankruptcy, as first reported by Front Office Sports.

In the aftermath, stories like the social media manager’s have become ubiquitous. A  former player was sent a medical bill for treatment received during training camp. Scores of others reportedly had to cover their own airfare or were sent four-figure bills for hotel rooms. There was the class-action lawsuit filed by two players, claiming that ownership misled them about the league’s long-term fiscal solvency. Founders pointed fingers at one another after the debt-ridden league came crashing down. All manner of now ex-employees, from team officials to players,  learned they were out of a job thanks to social media.

The league’s bankruptcy filing revealed that $48.3 million was still owed to a variety of creditors against a $11.3 million in concrete assets, a scant $536,160.68 of which remained in the league’s bank accounts. Moreover, the AAF informed the thousands of creditors that any attempts to recoup their losses would be pointless right now, because, per Sports Business Journal, its coffers are entirely bare… “If it later appears that assets are available to pay creditors, the clerk will send you another notice telling you that you may file a proof of claim and stating the deadline,” the filing states.

But like the social media manager, many of those selfsame creditors began to suspect the AAF was on rocky financial ground long before the league officially pulled the plug.

Shortly after Tom Dundon, the majority owner of the NHL’s Carolina Hurricanes, who built his financial empire on the backs of subprime auto loans, bought a majority share of the financially-strapped league, he started to cut corners, looking to pare down expenses by any means necessary according to a report by Sports Illustrated. “As soon as Dundon took over, our f——— expense reports were getting approved out of Dallas,” where Dundon Capital Partners’ office is located, a former mid-level AAF employee told the magazine. (Dundon did not respond to multiple requests for comment sent via the Carolina Hurricanes. The form to contact Dundon Capital Partners on their website was removed at some point in the past few months )

With the AAF bleeding millions each and every week it remained in existence, per USA Today, Dundon deemed it necessary to scrimp and save wherever possible including on the margins. So vendors—companies that supplied locker room supplies, traveling equipment and more—were approached hat in hand and offered less than the full amount owed by the AAF.

READ MORE: AAF Files for Chapter 7 Bankruptcy 

While AAF officials served as the point of contact, two sources involved with the negotiations told Front Office Sports that the debt-clearing plan was conceived and ordered by Dundon’s financial team. If that meant exploiting AAF officials’ pre-existing relationships with vendors and playing on the faith placed in the league, so be it. As one former AAF official told Front Office Sports, it was “just a shit situation.”

Some of the companies did take the lowball offers, but others refused to accept less, insisting on full payment. It didn’t matter. Both paths led to vendors getting stiffed by the AAF. Dundon’s financial team kept stalling, promising the equivalent of “the check’s in the mail,” right up until the moment when the AAF closed its doors for good.

Now those vendors have been reduced to poring over the bankruptcy filings. They know all too well that, despite being out five or six figures, they’re way at the back of the line, trailing giant conglomerates like MGM and Aramark which are owed millions. And they’re not happy about it.

“I definitely feel scammed,” one vendor said.

(more…)

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