MetLife eyes the Meadowlands
MetLife is in advanced discussions with New Meadowlands Stadium to upgrade its corner sponsorship at the year-old facility to a full naming-rights deal.
A source close to the deal described the negotiations as “very advanced, but not complete.”
If the deal is completed at New Meadowlands Stadium, MetLife would join Progressive (Cleveland) and Farmers (planned for L.A.) as insurance brands with naming rights at sports venues.
For New Meadowlands Stadium, the deal would be a significant statement, as well as the
Wasserman sales chief John Brody said, “There is no deal.” He would not comment further.
For MetLife, putting its name on the building would bring it full circle. It bought the first cornerstone partnership at the stadium three years ago, gaining with it the Jets and Giants’ insurance category rights. Later that year, German insurer Allianz was close to a naming-rights deal that would have meant MetLife’s exit from the building, as was mandated by a clause in its cornerstone contract. Subsequent fallout and pressure from media reports about Allianz’s tie with Nazi Germany scuttled the deal, and now Met Life finds itself in position to take over naming rights.
While the deal is not complete, the level of anxiety surrounding the negotiations is high, for a number of reasons. Sources point to the failure of the Allianz deal, which represented the same category, as well as continued questioning of all marketing expenditures by financial services companies in the post-recession environment. Additionally, there is some concern within MetLife as to how such a large marketing expenditure on an NFL stadium would look during a time when the league is locking out its players.
“New York is a big fishbowl, [MetLife] is a public company, so there are nerves there, and the Allianz thing makes everyone doubly sensitive,” an industry source said.
While MetLife does not compete in the auto and home insurance categories, the deal would intensify an already escalating battle among insurance brands seeking to break through the ad clutter in a category where the marketing noise has gone from loud to deafening.
According to Nielsen Co. data, insurance companies spent $528 million last year on sports ad spending, a 30 percent increase from 2009.
“It’s become a tougher category to make noise in than wireless, because there are more competitors with really big budgets spending there,” said Tom McGovern, Optimum Sports managing director. “You have Geico, one of the top spenders per se, along with Progressive, Farmers, Allstate and our client [State Farm], vying for consumers’ attention.”
If the deal is completed, MetLife would join Progressive (Cleveland) and Farmers (planned for L.A.) as insurance brands with naming rights at sports venues.
In addition to its deal at New Meadowlands, MetLife is a PGA Tour sponsor and its blimps, airborne since 1987, appear at PGA Tour stops and other sporting events. But this stadium deal would be by far its biggest nonmedia sports expenditure. While it is already in the building, taking over naming rights would allow for even more opportunities, observers said. As a New York-based firm, it would allow the insurer to wave its corporate flag locally and in the financial capital of the world. Being tied to a future Super Bowl, both for marketing and hospitality, only enhances the deal.
“To some degree, there would be less of an internal sell-in, because they are already sold on the stadium as a marketing vehicle and they love what it has done for them already,” said Rob Prazmark of 21 Marketing, Greenwich, Conn., who had no knowledge of the negotiations. “It’s given MetLife an identity beyond Snoopy.”
21 Marketing’s proprietary naming-rights valuation system estimates the exposure value of a 20-year naming-rights deal with New Meadowlands at between $64.2 million and $68.1 million annually.
While the original asking price for the Meadowlands was upward of $30 million a year, many in the field said that the lower price, and the ability for the stadium to gain incremental revenue by selling MetLife’s corner, made MetLife’s bid an attractive offer for the property.
During SportsBusiness Journal/Daily’s recent Sports Facilities and Franchises conference in New Jersey, Giants CMO Mike Stevens was asked whether the naming-rights market is more vibrant now after a tough period economically, Stevens joked, “Vibrant? It only takes one.” He added, “People are talking again. Marketing is back. It’s reflective of the economy.” Stevens also was asked what the value of the Farmers Field deal for the expected NFL stadium in Los Angeles means for the market, and he said, “Every deal is great for the industry, but they are all very, very market-specific.”
Industry executives acknowledge this deal could have large implications on other big-market naming-rights opportunities available.
“I’m interested to see if this resets the market, since you’ve still got the Cowboys and Marlins and 49ers facilities in the market,” said Rob Yowell of Gemini Sports, who executed the deal for Honda on the Southern California home rink of the Anaheim Ducks.