“FedEx didn’t just buy the name on a big building,” he explains. “There are only certain areas where it actually says FedEx. It’s about the place, FedEx Field. That’s one of the reasons why the naming solution makes a lot of sense. If done well, it takes a lot of money and time to build a relationship. It is not as simple as putting up a sign. It is brand building and the experience is FedEx Field.”

Buying the right to name a sports facility typically takes place before one is built. In fact, the deal is often included in the pro forma. The revenue helps to defray the cost of construction.

“Re-naming existing venues is very difficult,” says Yowell of Gemini Sports. “We work with the Superdome, which is 25 years old. You’re not going to change the name overnight when for the last 25 years everybody has called it the Superdome. The same with Wrigley Field and other places.”

But there are exceptions. 3Com, the international provider of networking hardware and software, bought the naming rights for Candlestick Park, home of the Giants baseball team in San Francisco since 1960. The new name: 3Com Park. It was $6-million contract for five years.

“3Com was certainly able to get a lot of branding exposure and convert a portion of the audience to call it 3Com,” says Yowell, “although there was a large following that still called it Candlestick.” The contract wasn’t renewed, so the name changed back to Candlestick Park this year.

Most naming rights contracts are longer-term agreements. And after Enron, sports teams and cities will be careful of whom they do business with. The rules will change. Yowell advises caution and due diligence, while Wise of Landor recommends getting an escape clause, if possible.

But after all the safeguards have been built into the process, a corporate black eye can still taint a sports stadium, the fans and the city.

“So, ignore it. It’ll blow over,” says Kim Bayne, a marketing expert and author. “Sure, a few vocal fans will gripe about naming rights, but when it comes right down to it, the fans make their final decisions when they look in their wallets. They’ll tolerate it because they don’t want to spend extra money for tickets and taxes.”

Adds Miller, the marketing director: “You roll with the punches just like any other crisis. You find a new sponsor. That is why sports teams have some of the best marketers and sales people around.”

One thing is for sure: Naming rights are not going away. When done well, the deal appears to benefit both parties. And the fans will just have to learn to live with it – especially if ticket prices remain reasonable because of the revenue derived from negotiating for a corporate brand name.

“In the US, we are on the downside of venue construction,” reports Yowell. “Most of the stadiums are updated. In Europe, Asia and South America, you’re starting to see facilities that are 25- and 30-years old. They’re rebuilding. As they start to rebuild, they start to look at naming rights. They’re now in the position that we were 10 years ago – on the front end of their construction. There have already been naming rights there, just not to the magnitude of what you see [in the US]. But there are high-profile teams that are building new venues.”

Some of the more notable facilities that are marketing their naming rights include Stadium Australia in Sydney; Leeds United in Leeds, England; Shanghai Stadium and Guangzhou Stadium, both in China. They join major US sports teams seeking corporate names: the Philadelphia Phillies and Philadelphia Eagles, Seattle Seahawks, and others. The practice has spread to minor league sports and to the collegiate level.

When these state-of-the-art stadiums and arenas are built, fans of all ages will spend decades cheering on their teams in a venue named after a (presumably) financially-robust corporate brand.

“I’m worried about the younger generation,” says Bayne. “They can’t tell the difference between deep-pocketed corporations who buy their way into our psyche versus ethical companies. Does Enron come to mind?”

Ah, let’s not forget Enron Field. So what now? Will the baseball fans and other citizens of Houston have a Scarlet E on their collective psyche for nearly three more decades?

“Enron was current on its payment for this year, but the Astros wanted to buy the name back,” says Yowell. “They ended up negotiating a deal for buying back the rights for US$ 2.1 million. All the Enron signage is gone. It’s currently known as Astros Field,” he says, “and they are now re-marketing the naming rights.” (13-May-02)    

[13-May-2002]