Monday, March 14th, 2011

Cynopsis: Sports

March 2011

Good morning. It’s Monday, March 14, 2011, and this is your first – very first – Sports editorial from Cynopsis.  Look for more of these in the future!


The Name Game
Brands Mining Sports Venues for All-Star Engagement

By Chris Pursell

Whether it’s Wrigley Field, Heinz Field or Staples Center, sports venues have continually provided a way for brands to incorporate themselves into the pop culture lexicon. With sports ratings continuing to rise, AEG’s recent deal with Farmer’s Insurance for naming rights on a new stadium in downtown Los Angeles represents the latest step in marketing evolution. Both parties are betting big that the agreement will draw one or two teams to the city as well as change how these sponsorship opportunities are developed in the future.

The 30-year deal sets a new record in naming rights for sport venues, promising more than $20 million a year for a total that surpasses $700 million. In fact, the agreement also has an escalator clause, according to sources, which could top $1 billion if two National Football League teams decide to call Farmer’s Field their home. Those numbers are unprecedented, especially since the stadium has yet to be built and Los Angeles currently hosts zero NFL teams.

“Naming rights deals used to be just about a name on a sign, but the world is a little more developed now,” said Shervin Mirhashemi, COO of AEG Global Partnerships, whose company inked deals on at least ten different venues in 2010, including Best Buy Theater in New York and MasterCard Arena in Beijing. “It’s no longer just about the branding. While branding is important, we are also allowing companies to engage their customers in a meaningful, experiential way and develop a long-term relationship.”

A naming deal, particularly in the world of sports, not only provides mentions on TV, radio and in the press for the sponsor and a large sign, it also plays into how the company can interact with their customers. For example, The Farmer’s deal for the 1.7 million square foot stadium would go beyond the NFL. The stadium would also play home to international soccer matches, as well as concert and entertainment events. As part of the partnership with AEG, the contract also provides Farmer’s with signage inside and outside the venue, electronic messaging during events, hospitality access, promotional and experiential activation areas throughout the concourses, as well as a variety of branded clubs designed for the insurance company’s agents and customers. Of course, there are other benefits.

“As an LA based company, we didn’t just want to put a sign on a building,” said Kevin Kelso, CMO of Farmer’s Insurance. “We wanted to show that we were investing in the community and the jobs this stadium will create. That goes a long way in how we are perceived. While determining ROI, you have to consider the number of exposures you are going to get through the press and the general public. But now we also have to determine the significance of the message, how consumers are experiencing it and make sure they think about Farmer’s in a different way.”

Analysts note that for a company such as Farmer’s Insurance, a naming rights deal, particularly in the world of sports, provides messaging locally, regionally as well as nationally.

“If you are going to invest those kinds of dollars, you have to make sure you maximize the value of the deal,” said Eric Wright, VP of Research and Development at media research firm Joyce Julius & Associates. “The rise of sports television allows companies tied to these venues the ability to entrench themselves as part of a landmark, embrace the locals and ride the coattails of a major event. Eventually that brand will become part of the culture.”

NFL stadiums have averaged the highest dollars amounts from sports, but other sports have pulled their weight. Other naming rights deals include: Citi Field, the home of MLB’s New York Mets, for $20 million a year; the Houston Texans’ Reliant Stadium, pulls in $10 million a year for the NFL stadium; American Airlines Center, where both the NBA’s Dallas Mavericks and the NHL’s Dallas Stars play, earns $6.5 million; and AEG’s Staples Center, home to the Los Angeles Lakers and the Los Angeles Clippers, average $5.8 million a year for rights to the name.

“Our good naming rights partners have the ability to tell a story to the guests before they even arrive, and become part of the American vernacular,” said Todd Goldstein, President of AEG Global Partnerships. “Companies now have the ability to buy a completely interactive experience and that means there are more elements associated with these deals than in the past. At the end of the day, its more than a name they are buying, it’s the ability to integrate the brand into the fabric of society.”

This is the inaugural Cynopsis|Sports editorial edition – let us know what you think about the story, about the idea of our having a Sports related edition, or anything else on your mind.  Email Cynthia at [email protected] or email Chris Purcell directly here.

Later — Chris
Chris Purcell for Cynopsis | Sports
March 14, 2011

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