Have you considered selling the naming rights to your arena?
On August 29, 2017, a record-setting naming rights agreement was announced between Scotiabank and Maple Leaf Sports & Entertainment, the owners of the home stadium of the NHL’s Toronto Maple Leafs and the NBA’s Toronto Raptors.
Although basketball is played out of the downtown Toronto venue, the $800 million, 20-year deal is all about hockey for Canada’s 3rd largest bank. This is an opportunity to solidify their “hockey bank” brand.
“Hockey is important to Canadians and, because of that, it’s important to Scotiabank.”
– John Doig, Chief Marketing Officer, Scotiabank
Scotiabank holds the naming rights to several arenas and ice pads across Canada already, including the home of the Calgary Flames, the Scotiabank Saddledome. But this spectacular deal extends far beyond the name on the downtown Toronto facility (which will continue to be called the Air Canada Centre until July, 2018 when the current contract expires). It’s a stake in the ground, a bet on a reconstructed team lead by the highest-paid coach in NHL history (Mike Babcock), in a facility brimming with exposure. With 36 million annual visitors it’s ranked the #2 venue by Billboard Magazine for US/Canadian facilities, and #4 worldwide.
“We have to work hard every day to be relevant to hockey.”
– John Doig, Chief Marketing Officer, Scotiabank
From Bank to Hockey Bank: 10 Years and 8,000 Minor Hockey Teams
In its transformation from “bank” to “hockey bank”, Scotiabank has worked tirelessly — and purposely — over the past 10 years to associate its name with hockey. The bank currently sponsors minor hockey teams — eight thousand of them in total — and that sponsorship and community involvement is crucial to the goodwill and fan engagement Scotiabank intends to create with Scotiabank Arena.
Your arena might not boast a tenth as much foot traffic as the MLSE facility, but it may dovetail nicely with a local company’s philosophy. Take the Essentia Health Duluth Heritage Sports Center in Duluth, MN.
According to Jerry DeMeo, the President/CEO of the arena formerly known as the Duluth Heritage Sports Center, the story of the arena’s naming rights is a rather brief one. And they were approached Essentia Health, a network of hospitals and health care clinics throughout Minnesota, North Dakota, Wisconsin and Idaho. It’s often the other way around:
“Essentia Health came to us with an offer for naming rights,” DeMeo says. “They felt that our mission to encourage physical exercise, our location and our visitor demographics made us a perfect medium to deliver the Essentia message of wellness and well-being throughout our area.”
DeMeo says the yearly revenue from the naming rights agreement lets their private non-profit keep its user fees down — and be self-sustaining.
“With Essentia’s support, we are in a much better position to fund our operations while keeping our facility rental rates competitive within our market,” DeMeo says. “Being private non-profit, without any taxpayer support, we’re required to sustain our operations with the revenue we’re able to produce through facility rentals, concession sales, advertising and promotional events. Essentia’s naming rights contribution is $100,000 annually, with a 15-year term, enabling us to be self-sustaining.”
Naming Rights: What You Should Consider
So what should you consider in selling the naming rights to your facility? Here are some suggestions:
- Determine what it is you want to sell: Should you sell the naming rights to your entire arena, or each sheet of ice – or all of the above? In 2008, the City of Kingston, ON used the services of Wakeham & Associates Marketing and not only sold the naming rights to the building but to each of the 4 NHL-sized ice surfaces inside the building. The naming rights for the building was sold to INVISTA whose nylon manufacturing plant is a large employer in the region. That was a five-year deal for $220K — which was renewed in 2016 for another five years at a similar price tag after INVISTA won an RFP once the first term expired.
- How much of a change are you willing to make? Selling naming rights may mean much more than changing the sign on the outside of the building and could include a change of paint schemes and other changes that you might not be willing to make. Remember that naming rights are meant to be win-wins, so changes will be needed, like all your external communications (which may mean a new website URL and redesign), logos on the ice and throughout the arena, even branded clothing for your employees. These changes, and more, may be requested by the sponsor, so be prepared.
- Who would be a good partner for your facility? Look at your current sponsors and supporters (and don’t forget your Board Members) and reach out to them first. Because they may have sponsored your ice resurfacer doesn’t mean they might not be interested in buying the naming rights.
Hugh Wakeham, President of Wakeham & Associates Marketing says local presence is key:
“The ideal naming rights partner for an arena is one that has a strong presence and a positive reputation in the local community,” says Wakeham, who has offices in both the US and Canada. “The image and brand of the naming rights partner will have an impact on the public’s perception of the venue, and the venue’s ability to attract other corporate brands as sponsors or advertisers. It may even have an impact on the ability of the venue to attract certain users. A naming rights partner should be committed to the community in which the arena operates. It should also be committed to fully activating its sponsorship and supporting the arena in maximizing its success, whether through marketing support, networking or other means”.
- How attached is the community to your facility? Candlestick Park in San Francisco, CA is no longer, but it was a great example of how a community reacted poorly to a name change. The naming rights to “The Stick” were first sold 40 years after it first opened when software company 3Com bought them. The fans of the ’49ers and San Fransisco Giants couldn’t be convinced to call it anything other than what they always did. “3Com Park” never caught on, nor were the names of any of the subsequent corporate sponsors.
- Get your numbers together! This is so a prospective partner understands why your arena might be a good match. Know what your traffic is and where it goes, whether to your ice rink, the walking track, gym, pool — or any of the other areas of your facility.
Have you negotiated naming rights for your arena? Is there something you wouldn’t do again, or something you would encourage? Let us know. Send me an email or put a comment in the box below.