How to Get Your Name On a Stadium

It's simple; just effectively lobby your local sports team... oh, and be a corporation willing to spend at tens of millions of dollars.

Aug 30, 2014 at 10:37AM

Once upon a time, the naming of sports facilities tended to follow certain conventions. In most cases they were titled after either the team they housed (Giants Stadium), a VIP connected with the franchise (Wrigley Field), or their geographic location (Madison Square Garden).

But today, in a world stuffed with rich companies eager to spend marketing dollars, the name written in giant letters across a sports facility more often than not belongs to a corporation.

Your Name Here 
Given that they typically involve many millions of dollars and publicly traded companies, the processes of selling and buying naming rights can be surprisingly opaque.

That's likely because the entity granting those privileges -- generally, the team itself -- is a small, somewhat secretive organization compared to the firm doing the buying. Oftentimes, it's unclear who approaches who, why the winning namer is chosen, and how the parties settle on the price and duration of their deal.

What is certain is that there's usually a lot of cash involved. British bank Barclays(NYSE:BCS) is spending $200 million over 20 years to be the name on the arena where the NBA's Brooklyn Nets play. And that's half as much as the deal reached in the neighboring borough of Queens that obligated Citigroup(NYSE:C) to pony up $20 million per year for similar rights across two decades with baseball's New York Mets.

It helps to be a major financial firm with buckets of cash for this kind of activity. Case in point, Bank of America(NYSE:BAC), is now paying $7 million per year to have its name grace the stadium in Charlotte where the NFL's Carolina Panthers play on Sundays.

Further down the city/team chain, companies can go athletic for relatively bargain rates. Retailer Target(NYSE:TGT), for instance, shells out an estimated $1.5 million annually for the den of the NBA's Minnesota Timberwolves, the Target Center.

Low-Cost Publicity 
Those deals sound pricey, but from the namers' standpoint they can be a relative bargain. The $7 million Bank of America pays the Panthers every year is petty cash compared to the over $1.8 billion it spent on total marketing expenses in fiscal 2013.

The same goes for Coca-Cola(NYSE:KO). The company hands over a bit north of $6 million yearly to keep the name of its orange juice line, Minute Maid, on the Houston Astros' baseball stadium.

Meanwhile, the soda overlord's grand total for advertising in 2013 was over 500 times as much, at $3.3 billion.

Their Name Is Mud 
But naming a stadium isn't necessarily a home run/slam dunk/hat trick for all parties concerned. More than once, a company has run into difficulties during their title tenure.

The economy was seemingly healthy in 2006 when Citigroup and the Mets announced their deal on Citi Field. Two years later, the recession sank its deep claws into the financial sector. The bank suffered near-mortal wounds, necessitating one of the priciest bailouts from the government's Troubled Asset Relief Program.

Suddenly, to many, a $400 million investment into a baseball stadium seemed like an irresponsible waste of money.

From the team's side, meanwhile, it (literally) pays to be selective about which entities it grants naming privileges.

Before the Astros played in a ballpark named after that orange juice, their stadium bore the moniker of one of the most notorious groups of financial cheaters in history.

The place was called Enron Field from its opening in 2000 until just after that firm's inglorious collapse the following year. The Astros had to pay $2.1 million to Enron in order to break their 30-year, $100 million contract for the name.

By Any Other Name... 
Although it's tempting to sell the identity of a stadium/arena to a well-heeled bidder for millions, certain teams don't have that luxury. That's because some facilities have such strong name recognition.

So it was with the NFL's San Francisco 49ers, which in 1995 began to sell the naming rights to its storied Candlestick Park. The idea of a name change to 3com or, especially, Monster Park, didn't sit well with fans, and went so far as to vote yes to a ballot initiative that (among other measures) enshrined the old name. 

Meanwhile, venues like Chicago's Soldier Field and Yankee Stadium have too much history and tradition wrapped up in their identities. It's telling that when the latter team built a new facility last decade, it didn't consider selling naming rights at all.

But for many owners, those big payouts from deep corporate pockets are too enticing to resist. For proof, just go see a game at FedEx Forum, AmericanAirlines Arena, American Airlines Center, AT&T Park, Time Warner Cable  Arena, or the Pepsi Center...

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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