There has been a bevy of activity relating to stadium naming rights agreements over the last six weeks.
- SoFi secured the rights to the new NFL stadium in Inglewood, California with a 20-year pact worth at least $30 million annually.
- The Denver Broncos announced Empower Retirement agreed to a 21-year deal to replace Sports Authority on the stadium at Mile High. The venue has been without a corporate sponsor since the sporting goods retailer liquidated back in 2016.
- Miami-Dade County disclosed that American Airlines would not be renewing its sponsorship of the house that Dwayne Wade built when their��20-year agreement expires in 2020.
- US Bank allowed its deal with the venue formally known as Riverfront Arena in Cincinnati to expire after two decades as the naming rights sponsor.
Both American Airlines and US Bank will continue to maintain a presence at those venues. Neither building has announced a replacement for their long-time partners.
Howie Long-Short: The Inglewood project and the stadium at Mile High both have new naming rights partners, but the value of those two deals differs tremendously. Financial terms of the Broncos-Empower Retirement pact were disclosed. It’s reasonable to assume that the agreement looks more like the $150 million over 25 years that Sports Authority agreed to back in 2011, than the $600 million deal SoFi signed. It should be noted that SoFi’s agreement with the Rams and Chargers did not include the financing of the stadium – typically one of the ways a financial institution can recoup money a naming rights agreement.
The new venue in Los Angeles was able to set a new ceiling on the naming rights market because “there’s just not many buildings scheduling 16 consecutive regular-season NFL games.” Michael Neuman, managing partner, Scout Sports & Entertainment explained that “it’s an opportunity that might come across once each decade,” so the competition is steep. The last time it happened, MetLife set the bar agreeing to pay the Jets and Giants $20 million annually.
But it’s not just Rams and Chargers games that will bring attention to the venue and by proxy the online financier. The stadium is set to host the ’22 Super Bowl, the ’23 CFP National Championship Game, one to three ’26 World Cup game(s) and the opening and closing ceremonies of the ’28 Olympics. The value in those events is most certainly baked into the price tag.
Expect to hear about more of these high-profile naming rights agreements. Many of the stadium sponsorship deals struck in the 90s – when the boom began – were for 20 or 25 year terms and have expired or soon will. Priorities have shifted and leadership has changed at many companies over that time leading Neuman to believe that there may be “a wealth of opportunities for new brands to enter the space” on the near horizon. It is not clear why American Airlines elected to not to renew its deal in Miami. The company has 10 years remaining on a 30-year agreement with Dallas’ NBA arena.
The first generation of naming rights deals lacked sophistication. Brand marketers assumed that simply having their name and logo on a building would influence the purchase funnel. That thinking has changed over the last decade as consumers now have access to more information than ever before with connected mobile devices. It’s widely accepted within the marketing community that to cut through the clutter “there needs to be a deeper more amplified approach to activation – a year-round commitment to supporting the needs of the fans in that community.”
Those that have made the effort have found “stadiumnaming rights partnerships are working.” Neuman says that the research indicates “naming rights partners have connected emotionally with fans on levels other sponsors have yet to achieve and are influencing purchasing decisions more so than any other relationships the team has.” For that reason, expect both the the Miami and Cincinnati arenas to find new sponsors willing to pay an annual increase over their expiring deals.
Fan Marino: It’s not clear who will replace American Airlines in Miami, but I’m certain it won’t be BangBros; the South Beach based pornography company that bid $10 million per year for the naming rights. Any chance of the Heat taking the bait likely came to an end when the club found out the company was proposing a change to the name of the venue from American Airlines Arena to The BangBros Center (The BBC).
Interested in Sports Business? Sign-up for our free daily email newsletter list, here!