When Can Stadium Naming Rights Turn a Corporation into a Hero?

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Corporate America: These fans could be cheering just as mightily for your brand soon enough.

Despite the crippling economic situation in Detroit, it seems like it is “all systems go” for the construction of a new home for the Red Wings in the city affectionately known as “Hockeytown.”

Although the City of Detroit filed for Chapter 9 bankruptcy in July in the largest municipal bankruptcy filing in the United States, a state board declared a unanimous vote the same week approving plans for a new downtown hockey arena.  The $650 million project will be funded, in part, with an estimated $285 million in tax dollars – even though the city is in an estimated $18-$20 billion in debt.

Detroit has become a place where police, on average, take an hour to respond to calls for help and 40% of streetlights are powered off in an attempt to save money.  Vacant buildings and empty schools litter the landscape of the former industrial powerhouse.  On the face of it, a new stadium dependent on public funding just doesn’t appear to be an appropriate allocation of property taxes given the dire situation of Detroit city services.

Advocates for its construction, however, view the 18,000-seat arena as the centerpiece in a development plan to inject life into the 45-block area linking midtown and downtown Detroit.  Michigan Governor Rick Snyder hopes the proposed retail, office, and parking space around the arena will create a better long-term environment for the city.

Completion of the area is anticipated for 2017, but to this point, there has been no public mention of any corporations vying for naming rights of the Red Wings’ new home.  The proposed arena would be home to one of the most storied franchises in all of professional sports and would supplant the Palace at Auburn Hills as the premiere indoor concert venue in Metro Detroit.  There is a lot riding on this venue, and it has the potential to breed a very positive influence on a very depressed city.  According to our research, this is the perfect situation for big business to find sponsorship success by playing the hero, rather than the exploiter.

In the first independent study of its kind, Performance Research revealed the critical “Naming Rights & Naming Wrongs” of stadium sponsorship.  When do companies get it right, you ask?  In situations such as this where there is a strong need for a new venue, and there is a deep appreciation for corporate contributions that help make the new stadium a reality, that’s when!

Some pertinent highlights from the study: Nearly 40% of respondents opposed the idea of changing the titles of existing stadiums and arenas to accommodate corporate naming rights, regardless of the reasoning.  However, companies that struck deals with new and developing arenas experienced a positive impact on public opinion with 6 out of 10 fans. Local supporters embraced named stadiums that were new because they often felt they benefitted personally as a result.  ‘Lower taxes,’ ‘more sports opportunities,’ and ‘lower ticket prices’ were the most appreciated benefits cited by fans.

Although hockey is not discussed, this intriguing USA Today infographic highlights the lucrative nature of stadium naming rights today.  Joe Louis Arena, Detroit’s current house of hockey, is one of only three in the NHL without a corporate sponsor.  Our prediction?  Look for the new Detroit arena to buck this trend and shop its naming rights this time around.  And, if corporate America is smart, they will surely listen.

If a corporate sponsor emerges to help facilitate Detroit’s new downtown developments, the results would be tremendous for everyone involved.  A city in desperate need of salvation would see government funding allocated where it is needed most.  The new venue and surrounding infrastructure would provide a well-timed ray of economic hope for Detroit. And its residents, as well as those outside of the area, will recognize that sponsor’s commitment in making it all happen with substantial PR gains in the process.

That is how to become a corporate hero in one easy step.  What’s not to like?

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