In Depth
Marketing
Branding for dollars
The growth of corporate naming rights
Last Updated February 15, 2007
CBC News
Pengrowth Saddledome is home to the Calgary Flames. (Jeff McIntosh/Canadian Press)
What's in a name? Increasingly, it seems, a corporate moniker.
The sale of naming rights has quickly become entrenched in the world of pro sports. Largely gone now are the days when sports arenas and stadiums were named after teams or cities or something generic.
Now, it's the Bell Centre in Montreal, the Pengrowth Saddledome in Calgary, Rexall Place in Edmonton, the Air Canada Centre in Toronto, and the Save-On-Foods Memorial Centre in Victoria. The majority of pro sports teams in North America now play in facilities that are named after corporations.
It doesn't seem to matter whether the buildings are owned by municipalities, teams, sports conglomerates or wealthy individuals. The owners seem more than eager to jump on the "naming for dollars" bandwagon.
The Canadian Football League has confirmed that it's considering allowing a sponsor to attach its name to the Grey Cup championship game, a move that insiders say could generate as much as $10 million a year.
Of course, the sale of naming rights doesn't stop with the wide world of sports.
Company names have routinely been attached to a variety of cultural facilities in Canada (the Four Seasons Centre for the Performing Arts in Toronto and the Epcor Centre for the Performing Arts in Calgary, for example). And Scotiabank raised a few eyebrows in January 2007 by announcing it had bought the rights to attach its name to five Cineplex theatres.
A "win-win" situation?
Quick facts
Average annual value of 12 stadium naming rights deals signed in 2006: $5.25 million US
Average value of deals signed in 1999: $3.25 million US
Source: Sports Business Journal
At various times, many cities in Canada have mused about selling naming rights for such civic facilities as parks, gardens, public squares, skating rinks, and art galleries. They say they need the money to pay for expensive improvements, renovations, or ongoing maintenance. Meanwhile, non-profit organizations say they are being starved for cash as governments cut back funding.
Supporter of such deals call them "win-win" propositions — the company gets valuable branding and advertising exposure while the group getting the cash can run their facilities without having to raise admission fees or taxes.
In the case of sports teams, the money can help pay those huge salaries.
Many Canadian communities are currently soliciting deals from companies to name some of their multi-use facilities. (The Ontario community of Woodstock, for example, is asking for $100,000 for the rights to name its community complex for five years.)
Civic sensitivity leads to guidelines
In 2005 and 2006, Vancouver carried out research into the possible naming of city-owned facilities in return for corporate money.
A phone survey of more than 500 Vancouver residents found that 59 per cent supported selling naming rights, while 35 per cent opposed. In general, Vancouverites said support for the idea of naming city-owned buildings depended on the type of building, who was paying and whether the building already had a distinctive name or was considered a Vancouver landmark. The city is now drafting a comprehensive naming rights policy.
Civic sensitivity has led to broad guidelines that govern how far these public/private partnerships can go. You won't find any city hall buildings named after Tim Hortons or Nortel or Royal Bank. You won't see hospitals or universities or museums given corporate names, even though corporations often give huge cash or in-kind donations to these facilities.
And that brings up a key distinction between philanthropy and corporate naming rights: A company makes a donation in the interest of being a good corporate citizen. Buying naming rights for a building is done strictly as a business investment. It wants that purchase to pay off and has to justify it to shareholders.
Naming rights have sold for $400M
The Air Canada Centre is home to the Toronto Maple Leafs and the Toronto Raptors. (Adrian Wyld/Canadian Press)
The first specific sale of naming rights for a sports facility took place in the 1950s. But the practice has only become widespread in the past 15 years or so.
Modern naming rights deals go far beyond just the name on a building. These deals are now part of wider sponsorship agreements that can include private boxes, exclusive rights to market products for the audiences, and inside signage.
And current naming rights agreements involve huge amounts of money. Reliant Energy, a company that sells power in Texas, signed a 32-year, $300-million US deal in 2000 that allowed them to put their name on Reliant Stadium and the Reliant Astrodome, both in Houston. In January 2007, the British bank Barclays reportedly agreed to pay $400-million US for the right to name the future home of the New Jersey Nets basketball team for the next 20 years. Citigroup signed a similar-size deal in 2006 to slap its name on the Mets new baseball stadium in New York.
Canadian deals reputed to total as much as $64 million
Canadian naming rights deals have been more modest, but are still substantial. Financial details are often sketchy.
Reports say Bell Canada will pay as much as $64 million over 20 years for the naming rights of the Montreal Canadiens home rink. Air Canada will reportedly spend $30 million for the rights to name the home of the Toronto Maple Leafs and the Toronto Raptors for 20 years. GM's deal in Vancouver is worth about $20 million over 20 years, while Scotiabank paid $20 million for a 15-year deal in Ottawa.
What happens if the deal goes awry?
As naming rights agreements expire and corporate priorities and financials change, the names sometimes change too.
When Molson sold the Canadiens hockey club, they decided to relinquish their naming rights too. So the Molson Centre became the Bell Centre. The Katz Group's purchase of naming rights for the home of the Edmonton Oilers meant the Skyreach Centre — formerly Northlands Coliseum — became Rexall Place. In Calgary, the Canadian Airlines Saddledome gave way to the Pengrowth Saddledome after the airline was bought by Air Canada. The Corel Centre (home of the Ottawa Senators) was renamed Scotiabank Place in early 2006.
Sometimes city officials have had to step back from efforts to sell naming rights. In 2006, the city of St. Albert, near Edmonton, abandoned plans to rename two hockey rinks named after former NHL players Mark Messier and Troy Murray. The public wouldn't stand for it. In 2005, Toronto City Council decided not to sell naming rights to the public square in front of City Hall, which is named for former mayor Nathan Phillips.
In other cases, the deals went awry after the renaming. Enron Field in Houston was renamed Minute Maid Park in 2003 after the energy-trading firm's scandalous collapse. The name PSINet disappeared from the stadium in Baltimore after it filed for bankruptcy.
And sometimes, the fans just refuse to go along with the new name. Invesco paid $120 million US to name a new stadium in Denver to replace Mile High Stadium. Many people refused to call it Invesco Field. It's now known, officially, as Invesco Field at Mile High.
