Big money for stadium names may not generate cash flow, but it boosts brand image: expert
If you’re a Canadian sports enthusiast, you’ve probably heard of the Rogers Center and Scotiabank Arena. They are hard to miss, with their names plastered with bright lights and mentioned on national broadcasts.
But does seeing Auston Matthews score a record number of goals at Scotiabank Arena make you more likely to switch banks?
Brands pay big bucks for the right to name a stadium or arena. The Bank of Nova Scotia agreement for the naming rights of Scotiabank Arena is worth $800 millionand BCE Inc. paid $100 million for a 20-year contract put his name on the Bell Center in Montreal.
“When you think of Scotiabank Arena, it’s not a Toronto arena. It’s one of the most iconic arenas in all of North America,” said Laura Curtis Ferrera, chief marketing officer of the Scotiabank.
“It’s one of the most tagged places in Canada on social media. And it’s been the backdrop for some of the city’s most historic moments, including the Raptors winning the NBA championship. . It’s immeasurable in terms of value.”
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Scotiabank owns stadium rights across Canada, including the Scotiabank Saddledome in Calgary, until Scotiabank Center in Halifax.
Curtis Ferrera said the bank’s internal research shows these partnerships pay off.
“When Canadians know about our sponsorship, they are three times more likely to consider Scotiabank their primary bank, and they are three times more likely to refer us to others,” said Curtis Ferrera.
But according to a study published in the Journal of Sports Economicsthere is actually no direct relationship between a building’s name and making a profit.
The study looked at the companies’ stock prices before and after the naming deals and found that there was no economic benefit.
But John Fortunato, a professor of communications and media management at Fordham University in New York, says it’s not all about direct advertising.
Building a new brand
Fortunato said a naming deal can be a boon for companies trying to get their name or product out there.
“You get huge brand awareness, right? I mean, there’s just exposure to millions of people in a simple way [and] you won’t get this in any other format,” Fortunato said. Cost of life host Paul Haavardsrud.
He uses the example of the Crypto.com Arena. The downtown Los Angeles venue was known as Staples Center, home of the Lakers, Clippers and Kings. It was the scene of legends such as Kobe Bryant, Wayne Gretzky and countless music superstars.
But now Crypto.com can host these top athletes and events.
“It certainly gives that air of legitimacy to an entire industry,” Fortunato says.
And there are other benefits, he says. Having his name on the building usually gives the company its own business suite at the arena, he says, which can be used to reward staff or for business meetings with clients.
Businesses can also use a building name as part of a marketing campaign.
“Naming rights might just be kind of a doorway, if you will, to what a much larger sponsorship campaign might entail,” he says.
That’s why Scotiabank got into the name game.
Curtis Ferrera says the momentum started 20 years ago when the company was trying to be Canada’s “hockey bank.”
“The natural extension of that is, what are those few iconic sites that are meaningful to Canadians that can complement our full interest in hockey, our full sponsorship of hockey.”
Not for everybody
But Fortunato says not all naming agreements are a given.
“I think you have to be aware of your own brand goals. You know, so if it’s basic exposure, it’s a great vehicle. If your brand is well known, then it’s not may not be the case.”
Apart from there being no evidence that a naming contract increases profits, it can also create a tricky scenario if a company folds.
As in the case of Crypto.com, like bitcoin and crash of other cryptocurrenciesteams like the Lakers and Clippers need to consider what impact that might have, Fortunato said.
“If there’s starting to be such a negative association with this industry that it’s starting to reflect back to them a bit, why are you doing business with these entities?” he said.
Some venues, like Yankee Stadium in New York, have remained unbranded, opting not to accept money from a major corporation. Fortunato says if the Yankees were to give up naming rights to the iconic stadium, the organization would be met with an uproar — but in the end, that probably wouldn’t matter.
“I think the Yankees would face a huge backlash…. They would be seen as greedy,” Fortunato said.
“Would that stop people from going to Yankees games? Not sure. Would that stop people from watching the Yankees on TV? You doubt it. Buy jerseys, buy hats? Probably not.
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People get used to it, even after the arena has changed its name.
To this day, some people still call the home of the Leafs and Raptors the Air Canada Center, and it may be difficult for many to refer to the old Skydome as the Rogers Center. But over time, Fortunato said the new name would take over.
“One of the things that happens with all these branded locations is that you get used to them,” he said.
“The first time you see it, you’re like, ‘Man, that looks weird.’ And then it just becomes part of the fabric.”
With files from Cost of life