The proposed Farmers Field in L.A. and the deal that created MetLife Stadium in the Meadowlands invigorated the naming-rights marketplace and demonstrated that such deals still work for brands. To discuss the state of the naming-rights market, SportsBusiness Journal and SportsBusiness Daily held a teleconference this month with some of the execs on both sides of the negotiating table. The panel included CSL Marketing Group Senior VP/Sales & Marketing John Alper, Wasserman Media Group Principal John Brody, Van Wagner Sports Group Senior VP Kip Koslow, AEG Global Partnerships COO Shervin Mirhashemi, Team Epic Principal Mike Reisman and Gemini Sports Group President Rob Yowell. They discussed the areas they see as ripe for growth and what it takes to get brands to sign on the dotted line. See this week’s issue of SportsBusiness Journal for the full discussion.
Q: John Alper, you just did a deal at the Univ. of North Texas with Apogee. What’s the state of college naming-rights deals? They’re on a much smaller scale, but it seems like a lot of them are getting it done these days.
Alper: Frankly, when you look at the number of colleges, whether it be stadiums or arenas, that have done a pure corporate naming-rights deal, meaning there’s no donor or ex-coach or whatever also on the stadium name or arena name, I don’t think there’s 20 of them out there, between arenas and stadiums. And there certainly are a lot of these stadiums and arenas out there that are named that either never got money for the name, or currently are not getting money for the name. So we certainly think that’s an area that has a lot of potential. We call it also, what I would say, a non-traditional type area, because it really hasn’t been embraced or endorsed or had much success with corporate naming rights, but certainly there’s a lot of value, especially in some of these bigger name schools.
Yowell: From a collegiate space, it tends to be much more of an emotional tie in the reason for buying. So if a chairman is an alumni is where you might see that open the door. ... I think obviously colleges and universities are very open to making money and doing corporate deals. Most of them have seven-figure guarantees from the third-party rights holders. I think, from our space, that’s one of those challenging areas where ... it’s just media rights and they carved out or kept out naming rights for their venues for a specific reason. Because I think they do want to pursue it, but I think they really want to pursue it on their own and not hand that over to some of the larger organizations that are really focused on trying to reach their guarantees. I think we’ll see more of it. I know several completed out in California, and there are several more that are considering it. But I think as new construction comes in ... they are following the trend they’re seeing at the pro sports level and having had to become more open to it.
Q: Who thinks that the naming rights for Cowboys Stadium will be sold before the proposed stadium in San Francisco and who thinks San Francisco will be sold before the Cowboys?
Alper: Well, I’m in Dallas, and we never lose to the Niners, so there’s no question who will win that battle.
Mirhashemi: I have no idea which is going to come first, but if you just look at it, Dallas is already built. So they don’t necessarily need that deal to make economic sense. It’s almost like gravy in some ways on top of what they’ve already created over there. San Francisco may be ... a different story. It may require a naming-rights deal in order to make economic sense of that project. So it’s more of a need issue, or it could be more of a need issue, and that may tilt it in favor of San Francisco having to get a naming-rights deal done first.
Reisman: It really depends on who’s willing to bring the price down to a marketplace reality. If the Cowboys keep their pricing up in the stratosphere, San Francisco will sell first. One of the reasons MetLife was able to put their arms around the pricing [at the Meadowlands] is the Jets/Giants brought the price down to a reasonable number. I’m not saying by any stretch it was a market price number; I don’t think it was. I think it was a strong number for them, but it was significantly below asking price way back when. And I don’t know that Jerry Jones and the Dallas organization have been willing to be more realistic like the Jets and Giants were.
Q: What about the Florida Marlins? You look at that situation down in Miami. You know the team’s not drawing flies at what is essentially a football stadium. But moving into a new building, early reports are they’re doing fairly well in terms of selling premium seats. Where do you see the situation down there as they near a deal?
Yowell: I think, again, that’s an opportunity that [there is] certainly some strong Latin American interest making a lot of sense. Just like I see, obviously, the opportunity out in the Bay Area with the Niners kind of having some Asian influence as well. Given the market, given the proximity to Silicon Valley, there might be some synergies with brands like that. I think both of them have international partnership written all over them, just given the multicultural nature of the markets that they’re in. The Marlins, I think, one of the biggest complaints has been that their stadium was never configured for baseball, and maybe having a home with a retractable roof so you don’t get rained on at four in the afternoon during a game maybe is attractive to the season-ticket buying fans.
Q: How would you complete this sentence: A naming-rights deal is most applicable to brands that are looking for …
Reisman: I think it’s most applicable to a brand that can use the stadium ... as a breathing, living organism of their brand. By that I mean as a showcase for their business. Consumer electronics, technology companies and other companies that can make the brand an interactive experience, I believe, are the best set to really maximize the benefit. Because not only do they get the marketing benefit of what they are trying to achieve, but they also can do something much more with a consumer coming into the stadium than just have their brand on signs around the stadium. The only other piece that I would say, because I think this is often overlooked, is a brand that can really derive contractually obligated income or revenue benefits directly back from the team and the stadium’s stakeholders into their contract.
Q: Which deal do you most admire, outside of ones you’ve been personally involved in?
Alper: The fact that Farmers Field, the amount of money they got, the way it was done, the way it was announced, the dollars, the vision that the leadership has shown there, that’s just an iconic, phenomenal deal. It’s never been done before like that, at least that I’m aware of. Now whether they get a team or not, who knows. But nonetheless, you’ve got to give it to AEG for getting that done.
Reisman: I’m going to give two. And I’m going to go back in time a little bit. ... But I think Staples Center, just because I think it was a bit trendsetting back in its day. .. And it did so much to revitalize an area, and it’s multifaceted in so many ways. But that was one. And then I think also an AEG deal, O2 in London, because they were able to convert the Millennium Dome ... into a very vibrant brand. They were able to kind of go from an existing brand into a new brand. And again, it was a bit of a trendsetter in the European marketplace at the time.
Mirhashemi: I think the Chase deal with Madison Square Garden is pretty, sort of, out there as well. The fact that that kind of dollar was affiliated with a deal that doesn’t have necessarily the naming component to it, I think, is very important for the future of the industry and I think it’s pretty revolutionary. You may see more and more of those types of deals as brands may want to have all the benefits and all the assets and inventory that come along with a naming deal, but they don’t necessarily want to have the naming component.
