 The
following are frequently asked questions with regard to naming
rights.
Basic Info
Q: What are naming rights?
A: As defined today, "naming rights" are in
essence a package deal comprised of a variety of benefits and
opportunities both for the sponsor and the team. These deals
are, in reality, naming partnerships that are complex business
agreements between the parties that require each to include a
tremendous amount of opportunities to each other to make the
deals work...
Q: How are naming rights sold?
A: Naming rights are sold in a variety of
ways. Direct solicitation, requests for proposals or the hiring
of firms that specialize in marketing naming rights are common
approaches.
Q: What types of facilities have sold naming rights?
A: Naming rights have been sold for a variety
of facilities. Sports stadium and arenas were the first to
utilize the technique. Since then, convention centers, concert
halls, high schools and various public facilities have sold
naming rights.
Q: Can I sell naming rights for my facility?
A: The decision to sell naming rights for a
facility has to be done on a case-by-case basis. Every facility
owner and community takes a different approach toward naming
rights. Even if it can be done commercially and legally, the
question that still has to be asked whether it is the right decision
for a particular facility.
Q: Are there negatives to selling naming rights for my
facility?
A: There can be. Community opposition is a
strong possibility. Another is that the continually changing landscape
of corporate America could also necessitate changing a facility
name which can be a costly process. These are just a pair of
many possible negatives.
Q: What does a naming rights agreement look like?
A: It depends on the parties and how they
choose to draft the agreement. Some agreements can run for a
mere page or two while other can run upwards of fifty pages. It
depends upon the desires of the parties and how they wish to
protect themselves in the contract.
Q: How are naming rights agreements priced?
A: Again, this is done on a case-by-case
basis. There are numerous different approaches. Some industry
observers have tried to quantify the value objectively. Others
put a price on these rights simply because that is the financing
gap that they need to fill.
Q: Is there really a naming rights jinx?
A: Some members of the media certainly make
that argument. There have been several high-profile instances
where naming sponsors have suffered bankruptcy or substantial
business loss while in the midst of a naming rights agreement.
However, in light of the fact that over 200 deals have been
signed over the past thirty years, the law of averages would
seem to dictate that some companies would experience downturns
or failure during a naming deal. As such, it appears that this
"jinx" factor may be overblown...
Q: I'm thinking about buying or selling naming rights, what do I need
to do?
A: Consult legal, financial and industry
counsel to protect your interests.
Q: Are there tax issues related to naming rights
agreements?
A: There can be. The IRS is currently looking
at naming rights agreements from a variety of perspectives. As
such, it is a virtual necessity to discuss these matters with
legal and financial professionals before completing this type of
arrangement.
Q: Can I sell naming rights for a portion of my facility?
A: It has become quite common for facilities
to sell the right to name discrete portions of the building to
corporate sponsors. Entrance gates, premium seat levels and
seating sections are prime examples of such sales...
Firsts
Q: What was the first naming rights agreement?
A: The first true naming rights agreement was
a 1972 deal between Rich Products and Erie County, NY for the
then-new stadium for the Buffalo Bills.
Q: What was the first minor league naming rights
agreement?
A: The first minor league naming rights agreement was a 1986 deal
between Pilot Air Freight and the City of Buffalo for the
then-new stadium for the Buffalo Bisons.
Q: What was the first college stadium naming rights
agreement?
A: The first college naming rights agreement was a 1979 deal
between Carrier Corporation and Syracuse University for the
Carrier Dome.
Q: What was the first naming rights agreement to rename an
existing facility?
A: The first re-naming rights agreement was a 1988 deal
between Great Western Bank and Los Angeles Lakers' owner Dr.
Jerry Buss for the right to rename the Los Angeles Forum as the
Great Western Forum.
Q: What was the first MLB naming rights agreement?
A: The first MLB naming rights agreement was for the right to
name the home of the Colorado Rockies as Coors Field.
Q: What was the first NBA naming rights agreement?
A: The first NBA naming rights agreement was a 1986 deal
between ARCO and the Sacramento Kings for the then-new
ARCO Arena.
Q: What was the first NHL naming rights agreement?
A: The aforementioned Great Western Forum deal was the first
involving a NHL team as the Los Angeles Kings shared the
facility with the Lakers.
Q: What was the first convention center naming rights
agreement?
A: The first convention center naming rights agreement was a
1997 deal
between Midwest Express Airlines and the Wisconsin Center
District for the new convention facility in downtown Milwaukee.
Deal Length
Q: What was the longest naming rights agreement?
A: Several deals are said to be for the life
of the facility.
Q: What is the average term length of a naming rights
agreement?
A: The length of a deal varies depending upon the type of
facility. Major league agreements tend to be longer than minor
league agreements. Check the "Facts & Figures" page of this site
for more information.
Defunct Agreements
Q: What was the first naming rights agreement to terminate
early?
A: The first deal to end early was the aforementioned deal
between Pilot Air Freight and the City of Buffalo for Buffalo's
then-Pilot Field.
Q: What was the first naming rights agreement to expire?
A: The first naming rights agreement to run its course and
expire was the 1972 deal between Rich Products and Erie County,
NY for Rich Stadium.
Q: How many naming rights agreements have been terminated
early?
A: Approximately 20 deals have terminated early on the major
league and minor league levels. Some of those were by mutual
decision. Others were because of bankruptcy or corporate
failures.
In addition, approximately ten more deals have expired or concluded
because the facility was destroyed and replaced by a new
building.
|
