The 40-year-old US stadium-naming rights industry is worth more than $3bn (£2.1bn). Companies ranging from 3Com and Compaq to American Airlines, Heinz and Fedex all have brand-named stadiums. Until recently, stadium-naming rights deals in Europe were largely confined to the UK. These include the Reebok Stadium in Bolton and the BT Cellnet Riverside Stadium in Middlesborough. The Fosters Oval has just been renamed the AMP Oval. But this is all about to change, given the increased pace of new stadiums being built across Europe.
Germany is taking the lead, with two deals having been completed in the past few months. The Hamburg Arena is now called the AOL Arena and the old Olympic Stadium in Munich is to be called the Allianz Arena – after the Munich-based insurance giant.
In the UK, football clubs that are building new stadiums have all signalled their intention of seeking a naming rights sponsor. These include Arsenal, Leeds United, Fulham, Leicester City and, potentially, Everton.
They would be wise to think carefully about finding the right long-term partner. The examples of PSINet and Enron in the US – both bankrupt and owning stadium naming privileges – show what happens when the financial status of the sponsor is affected.
The name itself should be carefully considered. For example, will the BT Cellnet stadium become the O2? Name changes can create confusion for fans as well as over the terms of the deal.
The reaction of football’s governing bodies, Uefa and Fifa, has important implications. Fifa has already instructed that for the duration of the World Cup in Germany in 2006 the AOL Arena must revert back to Hamburg Arena, so as not to conflict with the governing body’s central marketing policy. This is all well and good, but what will happen with the Allianz Arena, which has no former name to revert to?
With Portuguese stadiums seeking sponsors for Euro 2004, and other stadiums staging regular European and international fixtures, Uefa and Fifa will in the future have a tough job dictating what stadiums can be called. Clubs are not going to ignore an offer of more than £20m in revenue to fall in line with a centralised marketing policy.
On a positive note, while at present there is no such thing as a ratecard, sponsors can assess the value of their rights through tangible media analysis. This includes the number of times the name gets mentioned or seen, perimeter boards that receive TV exposure, giant screen advertising, and even road sign changes.
For stadium developers, a naming rights agreement can also be a major source of funding in terms of the sponsor contributing to the stadium’s infrastructure in the form of hardware.
Naming rights should be a “once only” deal. It can be hard for sponsors other than the original one to get the best out of a deal.
Stephen Pearson is managing director of Sportacus