When Chelsea announced they were looking for a naming rights sponsor for Stamford Bridge earlier this week, I tweeted that I would advise brands to avoid naming rights sponsorships of an existing stadium like Stamford Bridge, because they don’t work with the media [who won’t use the sponsor’s name] or the fans [who don’t like a sponsor re-branding ‘their’ stadium].
 
This principle is the second of my Five Golden Rules Of Naming Rights For Brands, which visitors to this parish will recall I last dusted off back in July.

Cue quite a response from the blogosphere, pointing out that O2 successfully re-named an existing arena, the Millennium Dome.

Does this render my second rule invalid? Well, no actually. To me The O2 and another recent deal are actually the exceptions that prove the rule.

But I admit that it does mean a re-think of the rules. And I’ve come to the conclusion that a new one is needed.
 
Based on the success (in branding terms) of The O2 and the Aviva Stadium in Dublin (re-built on the site of the decrepit and ultimately unloved Lansdowne Road) it’s clear that it is possible to successfully brand an existing stadium under certain conditions: those conditions being when the stadium involved is unloved and/or decrepit, and as a result is going to be re-built and/or re-launched.

So, for the very first time, I give you a modified second rule and a new third rule, to create a new list of six.

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 Emirates’. Conversely, horrors like ‘Sports Direct.com@St James’ Park’ always quite deservedly bomb. 

2.  Avoid re-naming an existing stadium with heritage. If you do, you run the risk of being edited out (The Oval) or the object of acrimony (SportsDirect.com@St James’ Park). It’s much easier to start with the blank canvas of a new stadium. But don’t forget to follow rule number one.

3. The exception to this is when a stadium or arena is unloved and/or decrepit and as a result is going to be re-built and/or re-launched – for example the way the Millennium Dome became The O2 and Lansdowne Road became the Aviva Stadium.  But again, don’t forget to follow rule number one. 

4. 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.

5. You must be in it for the long term, for two reasons: to demonstrate your commitment (see also rule number four) 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 rule number one.

6. Once you’ve followed rules 1-5, the hard work really starts – gaining the respect and admiration of the fans and the media for what you’re doing.

So, there they are. The new Six Golden Rules Of Naming Rights For Brands. Let me know what you think.

And before you ask, yes I am wondering whether the Etihad deal with Manchester City to re-name Eastlands might create a seventh, where it is also possible to re-name a stadium with, let us say, no heritage. But let’s wait and see how that one plays out first.

By Tim Crow on November 9th, 2011

Tags: Default, Naming Rights, Sponsorship

9 comments

(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. 

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

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What happened? London’s iconic rock venue, the 100 Club, was all set to close earlier this year – until über trendy footwear brand Converse put their best foot forward and stepped up to the plate. Due to rent increases on Oxford Street, the club, which has hosted the likes of The Clash and The Sex Pistols was threatened with closure – despite holding the title of the oldest live music venue in London, hosting acts on the same premises since 1942.

In stepped the shoe manufacturer, whose urban credentials already make them suited to the partnership, with a relatively low-key sponsorship investment, that saved their bacon.

Why we love it: A subtle approach to sponsorship, without a branding board in sight. Converse have taken an investment stake in the club, which was set to close despite vociferous protest from fans via social media, such as the ‘Save the 100 Club’ Facebook page (19,000 fans) and Twitter stream (884 followers). Converse, always a brand looking to tap into the zeitgeist of youth and maintain its independent cool factor (despite its more corporate Nike ownership), have been smart in their sponsorship of the club.

No flashy branding, no title sponsorship, no name-changing – the club will remain independently owned and, at least according to the press release, brand-free. Converse followed traditional sponsorship methodology – pinpoint a passion point of your consumer and put your brand at the heart of it – but are activating it in a very modern way: with subtlety and genuine investment in their fans’ heartland. Social sponsorship at its best.

What the brand says: A statement released by the shoe manufacturer revealed its reasons behind the move: “Converse and the 100 Club both share a love for music and this partnership is a great opportunity to reunite the 100 Club with a generation who experienced history inside its walls, as well as introduce it to a new generation with a vow to bring the best in music to its legendary stage.”

By Lucie Bartlett on March 17th, 2011

Tags: Fashion, Music, Naming Rights, Sponsorship, Synergy Loves

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The London 2012 velodrome was officially unveiled on Tuesday to universal media acclaim. Quite right too: it is a stunning creation. The media coverage also confirmed that the velodrome has already acquired a widespread media nickname because of its distinctive roof: the Pringle.

To those of us who work in Olympic marketing, this is more than somewhat ironic. Without paying a penny, courtesy of the media,  Pringles has annexed a priceless piece of Olympic real estate.

Famously, the IOC keeps the Olympics as a spectacle free of brand names and presence: this is key to the Games’ DNA. Not that the spectacle actually is brand-free of course. There are the equipment manufacturers’ logos on every athlete’s clothing and footwear, and the branding and clocks of the official timekeeper Omega are very visible. But it’s pretty close.

This ban on branding extends to all buildings used for Olympic events. Thus, for the period of the Games, the O2 will be de-branded and given a neutral name. Whatever it’s called, we’ll all still call it ‘The O2’ of course: you can’t turn the clock back. But BT, and none of the other London 2012 sponsors, wouldn’t have signed up without this type of protection – and let’s not forget the global and domestic sponsors are together providing close to £2billion – 18% – of London 2012’s funding.

Which brings me to the second irony: the Pringles brand is actually owned by one of the global sponsors of the Olympics, Procter & Gamble. What a nice bonus this is for them: it will be interesting to see if they take extra advantage of their good fortune.

So, will ‘The Pringle’ stick? Will it spread from a media nickname (coined by PA reporter Helen William, according to this blog by BBC London’s Olympics Correspondent Adrian Warner) into the consumer mainstream? Only time will tell.

One thing’s for sure: if the powers that be decide, as expected, to sell the naming rights to the velodrome after the Games, I have a feeling I know who they’ll call first.

By Tim Crow on February 23rd, 2011

Tags: Brand marketing, Cycling, Default, Design, London 2012, London 2012 sponsorship, London 2012 sponsorship consultants, Naming Rights, Olympic sponsorship, Olympic sponsorship consultants, Olympics, Sponsorship, Team GB

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There is a saying: “If you’re £1m in debt, you’re in trouble.  If you’re £100m in debt, your bank is in trouble.”  In which case, both Arsenal and their Bond Holders, to whom Arsenal owe a total of £266m*, are in double trouble.

But can debt in a football club ever be a good thing?  What about all these high profile fan revolts, Premier League clubs going into administration and UEFA deeming it necessary to introduce Financial Fair Play regulations to safeguard the future of the game?

Well, in Arsenal’s case, the answer is “Yes”. Of course, having ‘good debt’ hasn’t brought them a trophy in the last five years – and it didn’t help in the game at home to West Brom, but it is worth contrasting Arsenal’s situation with the other high-profile debt stories in football.

Firstly, debt is not a bad thing, per se.  In fact, it is a very good thing.  How many people could own a house if they had to pay for it all in cash?  Similarly, very few businesses have the cash they need to build a new factory, buy equipment, finance international expansion or conduct vital R&D.  They rely on debt to finance these activities – debt is the engine of growth. In Arsenal’s case, they needed the debt to finance the new stadium.  No debt, no new stadium.

Of course, there are two very important conditions that need to be met.  Firstly, the debt must be used to finance an activity which generates returns over and above the total cost of that debt.  Secondly, the cash flow from the new activity needs to be secure, predictable and able to service the interest payments.

Arsenal. In Arsenal’s case both conditions are met.  They have used the debt to build a new stadium which has significantly increased their revenues and profits.  To put it into context, the 9,000 premium seats at the Emirates generate more revenue per match than all 38,000 seats at Highbury did.  The remaining 51,000 seats at the Emirates are all upside.

Matchday revenue (the gate receipts taken by the stadium) was £93m and the operating costs of the stadium were £55m – meaning that the stadium generated a profit of £38m.  Total interest payments were £20.2m, providing interest coverage of nearly two times.

These ‘Stadium Profits’ are secure and predictable.  As long as Arsenal play roughly the same number of games per year and have roughly the same attendance, then there will never be a problem paying the interest.  The Stadium pays for itself and doesn’t rely on subsidies from broadcast revenue, commercial revenue or player trading surpluses.  It is the very definition of a good investment.

Good debt: Arsenal borrowed money to build a stadium which has increased the clubs value. The increased cash flow generated by the asset can comfortably finance the debt

Manchester United. The debt was not taken out in order to finance an activity that would increase the club’s value – it was taken out to buy the club itself.  So there is no reason to think that United’s financial performance is any better as a result of taking out the debt (in other words, the debt and the interest payments are pointless).  Secondly, the level of their debt (over £700m) is such that it cannot be financed by matchday profits alone – they have to tap into broadcast revenues, commercial income and player trading surpluses.  Last year, without the profits from the sale of Cristiano Ronaldo for £80m, they would have made a loss.  And that is a problem.

Pointless Debt: Debt was not used to build or acquire an asset that increases Manchester United’s value. Debt re-payments cannot be met by a sustainable and predictable source of cash flow

Liverpool: This is a very similar situation to Manchester United.  Again, the £350m of debt wasn’t used to finance growth but simply to buy the club (another case of pointless debt and interest payments).  Last year they didn’t generate enough profit from all their activities to cover their interest payments and recorded losses of £55m.  Big problem.

Leeds United and Portsmouth: Both of these clubs used debt to finance the purchase of players in the form of transfer fees and wages.  It is pretty easy to see why this was a disastrous policy.  Players don’t directly generate increased cash flow and their value is unpredictable and variable.  If the new players had caused a significant improvement in the team’s performance which had led to increased revenue and the value of the players themselves had increased, then the gamble might have paid off.  But it took very little for the house of cards to come tumbling down.

Chelsea and Manchester City: These two clubs also borrowed money to finance the purchase of players.  Of course, this money was borrowed from a Sugar Daddy rather than a bank and it is unlikely that any interest will be paid, let alone the principal.  Who knows what the long term consequences of this ‘Financial Doping’ model will be, but it is far from certain that it will end well.

In summary, Arsenal’s finances since they moved to the Emirates aren’t the problem.  The problem is that they haven’t added to their trophy cabinet.

* Arsenal also have £127.6m in cash, making their Net Debt the widely reported £138.4m.  Incidentally, a further benefit of debt is that interest payments are tax deductible – so 28% (the corporation tax rate) of any interest payment is re-captured in the form of tax savings.  This is one of the reasons why Arsenal are in no hurry to use their surplus cash to pay down their debt.

By Carsten Thode on September 28th, 2010

Tags: Barclays Premier League, Default, Football, Football Sponsorship, Manchester United, Naming Rights

2 comments

Who would have thought a simple name change could cause such a rumpus? St James’ Park, more a cathedral to the Geordie Nation then a stadium, has been given the catchy title by its beleaguered owner of ‘sportsdirect.com@St James’ Park’. Cue much uproar across the media and more importantly among the fans.

However, rather then add to the derision already rightly poured on this bizarre move, we think there could be an opportunity for a canny brand here. Any brand in sponsorship is fundamentally looking to engage, not alienate, fans and this naming rights debacle actually offers up a unique opportunity.

The answer is simple – try and strike a short term deal with the Newcastle United commercial team, buy the naming rights for the rest of the season and call it – this is the simple bit – ‘St James’ Park’.

In other words, give it back to fans: they’ll love you forever and no doubt you’ll get more than a few column inches to boot – for the first naming rights deal to get rid of the brand name.

By Dominic Curran on November 17th, 2009

Tags: Communications, Football, Football Sponsorship, Naming Rights, Newcastle United, Public relations

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New York, the city which pioneered the naming rights deal with Times Square, is innovating again.

The city’s Metropolitan Transportation Authority has agreed a 20-year, $4m deal with Barclays, giving Barclays the right to brand a nexus of subway stations in the Atlantic Yards development in downtown Brooklyn.

Evidently, Barclays’ rationale for the deal is that this is also the site of the Barclays Centre – a new sports and entertainment destination which will be home to the New Jersey Nets, which Barclays are naming for a reported $400m over 20 years.

It will be interesting to see if this will start a new chapter in naming rights, which in the shape of sports stadium deals became a multi-billion dollar industry in the US from the 1970s onwards, and is now a mainstream marketing technique worldwide.

Time will tell. But judging by initial consumer reaction to the Barclays deal on the New York Times messageboard, the pioneers will have to navigate a lot of rough road.

By Tim Crow on June 25th, 2009

Tags: Default, Naming Rights

1 comment

As a longtime admirer of the deal, I was really pleased to see O2 pick up both the Leading-Edge and Brand Extension awards for The O2 at last week’s Marketing Society Awards for Excellence. Overdue industry recognition for one of the truly great sponsorships, which has been a triumph of conception and execution. 

Many aspects of The O2 are familiar. The visionary, genuine partnership between sponsor and rights owner AEG; the consequent transformation of the derided Millennium Dome (against all precedent) into a world-leading entertainment venue; the integration of the asset into O2′s overall marketing strategy; and its key role in driving customer retention via priority ticket access and brand experience.

However, there are two less well-known aspects of The O2 deal that I like above all.  

First, the fact that it was the antithesis of the ‘Chairman’s whim’ decision-making which - despite what detractors of sponsorship would have you believe - has been the exception rather than the rule for many years. The O2 marketers had to make and remake the concept to their – unsurprisingly – highly sceptical Board three times before it was finally approved.

Second, that it’s delivered – and demonstrated that it has delivered – genuine, significant brand and business ROI in spades.

An econometric model developed to look at impact on customer loyalty [showed] an immediate but lasting impact on churn amongst the whole customer base…Without taking into account [acquisitions], the model has calculated a ROI of 26:1 by the end of 2008. Within 5 years we expect to achieve an ROI of 80:1.

(source: O2/VCCP Marketing Society Award submission paper) 

By Tim Crow on June 15th, 2009

Tags: Default, Naming Rights, Sponsorship

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