(This article first appeared in the Synergy newsletter in October 2004. On the day that Manchester City announces the biggest UK football stadium naming rights deal since Arsenal/Emirates - also with a Middle Eastern airline - we thought it was an appropriate time to dust it off.)
Fifteen-year, £90 million sponsorship deals being more than a little rare, it was no surprise that the unveiling of Arsenal’s stadium naming rights deal with the Emirates airline last month generated significant media coverage – which was however very short on genuine analysis of a landmark deal and its implications for the sponsorship landscape.
Show Me The Money Driven by Arsenal’s need to service the £260m they loaned to build their new stadium – not to mention the £142m of debt on their balance sheet to the end of May – a key feature of the Emirates deal is that it’s massively front-loaded, with Arsenal scheduled to receive £72m (average £9m per year) 2004-2012 and £18m (average £2.25m per year) 2012-2020.
From 2006-2014 this includes £5m per year (£40m) for Arsenal’s shirt sponsorship, to start – naturally – when the new stadium is scheduled to open in August 2006.
All of which reveals the following:
What’s In It For Emirates? Emirates executives are on the record in trade press interviews that the airline sees sponsorship solely as a means of driving accelerated international brand awareness and stature. They’ve also been quoted that their benchmark is Coca-Cola. Quite simply, their vision is to make ‘Emirates’ the generic term for ‘airline’.
It’s therefore unsurprising that Emirates are spending heavily in sports sponsorship generally – they have around 30 major deals worldwide – and football in particular. Last year, for example, they joined Coke (among others) as one of the FIFA World Cup Partners for Germany 2006. This year Emirates also became the first-ever sponsor of football referees in England, in a deal which gives them branding on the refs’ kit in all major competitions – one of which is of course the Coca-Cola League.
So where does the Arsenal deal fit in – particularly given the less-than-perfect scenario of Emirates announcing the deal in the final season of a shirt sponsorship deal with Chelsea?
The answer would seem to be brand awareness. What naming rights deals deliver, if you get them right (of which more later) is multiple media impressions. Naming Arsenal’s new stadium will generate literally billions of media impressions for Emirates worldwide over the course of the deal, and they’ve presumably calculated that this is worth at the very least £50m over 15 years: a reasonable assumption given the huge coverage of Premiership and Champions League football worldwide, the only caveat being that it relies on Arsenal staying at the top of the game – again a reasonable assumption, provided that a Leeds-style meltdown is covered in the contract.
Another consideration will no doubt have been that the deal kicks off at the start of the season following the 2006 World Cup, thus maintaining Emirates’ football presence beyond their first foray into FIFA land, as well as the fact that the brands share the colour red – visual empathy being a key, but rarely-considered, element of sponsorship synergy.
But in the most crucial respect the deal doesn’t stack up. Emirates won’t gain the respect of the fans – particularly the Arsenal fans – by writing a big cheque and letting the branding do the work. Quite the reverse. They’ll need to work very hard – and much harder than they did with Chelsea – to establish their credibility, especially to turn around the fans’ scepticism (which was very much in evidence on football websites after the Arsenal deal was announced) about a brand so readily prepared to jump from one team to another.
And if Emirates need any convincing that sponsorship – especially in football – is all about affinity rather than awareness, they need look no further than their own benchmark: Coca-Cola.
The Name Game
There’s nothing new about naming rights. Ever heard of Times Square? Named for the New York Times when it relocated to Long Acre Square, as it was previously known, in 1903. Rather less successfully, if you walk over the Golden Gate Bridge you’ll find that its official name is ‘The Pacific Gas & Electric Bridge’. Catchy.
Naming sports stadia is a well-established American phenomenon. Since the first deal of its type in 1973, it’s become a major feature of American sport, with around 40% of NFL, NBA and MLB stadia carrying a brand or corporate name (including, as Emirates will no doubt have noted, with several US airlines). The deals vary widely in value: most are around $5m per year, but a few are absolutely huge, led by the $30m per year, 30-year deal between Reliant Energy and the Houston Texans.
What the deals have in common are two things: they’re long-term (typically for a minimum of ten years) and they’re almost always – as with the Emirates Stadium – driven by the need to finance construction of a new stadium. As such, naming rights is still a fledgling industry in Europe, where the construction of new stadia is a very rare event, particularly for (with the greatest respect to Bolton fans) a top team such as Arsenal.
Accordingly, naming rights deals in Europe are still viewed with suspicion by both consumers and the media – and therefore with some unease by brands, the more so because there is a shortage of expertise in the ‘Old World’ about this ‘New World’ phenomenon.
All of which brings me, by way of summary, to the Five Golden Rules Of Naming Rights For Brands:
1. The stadium must have only one short name. If there are two names, one of which is the sponsor’s, guess which one the media, and the fans, will edit out? ‘The Reebok Stadium’ works: so does ‘The JJB Stadium’; so will ‘The Emirates Stadium’. The ‘Friends Provident St Mary’s Stadium’ and (our favourite in the USA) ‘Invesco Field at Mile High’ don’t, and never will.
2. You can only credibly and effectively name a new stadium. Try to name an old stadium only if you want to be ignored (answers on a postcard please if you can tell us who sponsors The Oval Cricket Ground) or the object of acrimony (the people of San Francisco have just voted against Candlestick Park becoming known as Monster Park). See also 1 above.
3. You must pay enough. There was an outcry in Leicester against Walker’s – previously a relatively popular local employer – when it was announced that the company had paid only £150,000 per year for 10 years to sponsor the new Leicester City Stadium. This was unfavourably compared with the millions the company had spent using Gary Lineker in its TV advertising.
4. You must be in it for the long term, for two reasons: to demonstrate your commitment (see also 3 above) and also because if you do it for long enough, the return on investment in terms of media impressions alone will be enormous – as long as you’ve followed rules 1, 2 and 3.
5. Once you’ve followed rules 1, 2, 3 and 4, the work really starts: gaining the respect and admiration of the fans.
By Tim Crow on July 8th, 2011
Tags: Football Sponsorship, Naming Rights, Sponsorship