UBS recently locked into a $350M naming-rights deal for the Islanders' new arena in BelmontGETTY IMAGES
The reduction in visibility for sports venue naming-rights sponsors during the pandemic "isn't likely to cause lasting damage" despite the fact that Americans "aren't going to major venues for the time being," according to Robert Klara of ADWEEK. The lack of fans in seats leads one to wonder "what are all of those multimillion-dollar naming rights deals worth?" The 10 largest stadiums in the U.S. have a "combined capacity of well over 1 million people." And with every "canceled game or rock concert, that's a million fewer people who'll be seeing a sponsoring brand's name on their ticket, above the front doors and on the signage inside." Yet, as UBS and Amazon "proved in the past few weeks, naming rights deals are far from dead." Temple economics professor Michael Leeds said, "As long as it's being broadcast, as long as the name is being mentioned in the media and mentioned on TV," lack of attendance "is not as bad as people might think." However, it is "hardly business as usual in the world of naming rights." Sponsorship deals "typically contain a clause dealing with force majeure." And while COVID-19 "most certainly falls under force majeure provisions, the unprecedented nature of the pandemic has kept lawyers busy trying to determine how that changes the terms" (ADWEEK.com, 8/14).
