24th February 2016

Stadium Name Changes: The Good, The Bad and the Ugly

Wales played host to Scotland last weekend in an enthralling RBS Six Nations clash, with an unpredictable, topsy-turvy encounter ending in a relatively predictable Welsh home win.

The familiar result in a familiar, electric, atmosphere was of no surprise, but it signalled a new era for Wales as they played their first home match in the newly branded Principality Stadium. That makes them the latest sports team to have their home renamed in return for a lucrative long term contract.

The draws of signing such a deal are obvious for WRU chief executive Roger Lewis. Money, and lots of it, £15m in fact. But do stadium rebrands really work for both parties?

Arsenal’s Emirates Stadium and Manchester City’s Etihad Stadium are two high profile examples from the footballing world, but there are many others.  In fact, right here in Manchester we have the O2 Apollo, Lancashire County Cricket Club’s Emirates Old Trafford and the AJ Bell Stadium, which hosts local rugby union side Sale Sharks and league outfit Salford Red Devils.

Although the UK’s venues have been slowly but surely taking on corporate names, our friends across the pond have been doing it for decades. The first sports naming rights deal was in 1971, when the New England Patriots sold its stadium naming rights to Schaefer Brewing for $150,000.

The figure may seem curiously low in today’s market, especially when compared to the fact American firm Citigroup is happy to pay $20million per year to name the New York Mets stadium Citi Field. Coincidently, after admitting to receiving in excess of $45billion in government bail outs before signing this deal, Bailout Field is apparently a more common name than the one they’ve paid so much for, but we’ll come to negative examples later…

So why are brands prepared to throw, in some cases, well over £200million at such commercial exercises?

Sports teams have the ability to create or enhance brand awareness like no other organisations. Whenever a game is played, it’s natural for commentators to mention the venue’s name several times over the course of play. This intense media attention is clearly of value to companies trying to get into, or remain in, the public eye for all the right reasons.

Marketers know that naming a venue can make hundreds of millions, if not billions, of positive brand impressions in the minds of potential customers. Visitors to important venues are just one of the audiences that see the name. Others include passers-by, the live TV audience, news watchers, radio listeners, social media browsers, photo sharers and internet streamers.

In addition, sport provides a platform for brands to achieve an emotional connection with target audiences. When deciding to buy naming rights, corporate firms want fans’ strong feelings towards the club, that it now passionately supports as well, to translate into expenditure on its products or services.

And when it comes to advertising, ever increasing audiences allow broadcasters to demand ever increasing advertising costs. The average cost per 30-second national television commercial during Super Bowl XLVII in 2013 for example, was a breath-taking $3.8million. The game was played at the Mercedes-Benz Superdome, and that cost of advertising made the German car giant’s naming rights figure of $10 million per year figure look like good value for money, as there was obviously no charge for mentioning the game’s venue in the hours of build up or on event coverage.

But what happens when stadium name changes don’t quite work?

The most famous stadium name change fallout the UK has seen happened when unpopular Newcastle United owner, Mike Ashley, rebranded the hallowed St James’ Park to the absurd Sportsdirect.com@St James’ Park. The decision is one of a number to have backfired on the Sports Direct brand, with a mass public call out to boycott the Sports Direct brand in the city still being stuck to in many North East circles.

The fans’ backlash to the move was so fierce, in fact, a motion was raised in the House of Commons calling for Ashley to reconsider the name change.

It’s not just a club’s fans that prevent stadium name changes from working though. Since 2003, Darlington’s ground has gone through over half a dozen name changes, meaning any kind of lasting brand association is virtually impossible to achieve.

And then there’s American baseball outfit Houston Astros, which was left red faced after it had to buy back the naming rights for its ground after energy firm Enron declared bankruptcy and collapsed in 2002.

So, when you get it right, connect with your target audience and stick around long enough to become part of the furniture, it’s clear that these stadium names really do provide lasting recognition. How many of us still call the Manchester Arena the ‘MEN Arena’ despite long term sponsor Manchester Evening News ending its sponsorship in 2011? The same can be said for what was once Wigan’s JJB and Bolton Wanderers’ Reebok.

And the Mercedes-Benz deal we drew on earlier is one of many examples of a firm, despite shedding a seemingly hefty expenditure, getting what could be viewed as value for money over the course of just one game due to the enormous global reach of sport.

For the fans, myself included, who prefer tradition and do not want to see stadium names being changed into commercial ventures; I’d best get used to it, because they’re here to stay.

By Tom Gibson, Senior Consumer Account Executive