Sporting sponsors get grounded

Mount Smart Stadium is no longer Ericsson but it could be something else again if the price is right. Eden Park is still Eden Park and will remain Eden Park, though it might be Something Eden Park (but not during the Rugby World Cup).

Westpac Park at Hamilton is now Seddon Park, though the Cake Tin is still Westpac Stadium. Jade Stadium sits proudly where Lancaster Park once did but Carisbrook is still a House of (Financial) Pain.

Welcome to the world of naming rights for sports venues, a world where New Zealand was slow to catch on but is learning fast.

It remains anathema to purists but economic reality bites, as Auckland ratepayers will discover when asked to fund the bulk of the $320 million proposed Eden Park redevelopment.

Naming rights sponsors take some of the pressure off the public purse, though what they have to pay and what they get in return remains clouded. Sponsors such as Ericsson and Westpac talk in generic terms about "brand exposure" but nobody can quantify how much more revenue is generated by having their name plastered across a stadium. No scientific measurement exists of how much income "brand exposure" brings, although the clear implication is "plenty".

"It was very beneficial to us," said Ericsson spokeswoman Kirstie Bedford, who did not know what Ericsson paid in 1995 for the naming rights for Mt Smart Stadium. "It's a great branding opportunity, if you're marketing direct tothe consumer."

Which Ericsson are no longer doing, hence their pulling out of the naming deal with ground owners, the Auckland Regional Council (ARC).

Not that it's bothered the ARC too much, apparently.

Chairman Mike Lee said other offers were considered but the council felt they did not suit. Read between the lines and change "did not suit" to "did not offer enough".

"I was more than happy to go back to its true name of Mt Smart," Lee said, before adding the rider: "But given the issue of rates, we are obliged to listen seriously to any applicant who is interested."

As is Eden Park redevelopment committee chairman Rod Fisher. Although Eden Park has to be "clean" for the 2011 Rugby World Cup, which is the motivator for the ground's upgrade, Fisher said naming rights were "possible in the long term, though not inevitable".

Potential sponsors have to be convinced of the strategic benefits of investing heavily in a ground which must erase the sponsor's name at the very time when it will be most in the world's spotlight.

It can be done. Allianz reportedly paid €90 million ($185 million) for the naming rights to the 66,000 seat space-age arena in Munich's industrial north which was known simply as Fifa World Cup Stadium, Munich, throughout the football tournament in Germany.

The multinational insurance giant might also be a little concerned that the stadium which is home to Bundesliga giants Bayern Munich has attracted another name, Schlauchboot - inflatable boat.

That mirrors the relationship between the Wellington stadium and Westpac. It opened with a burst of publicity but its idiosyncratic style means it is now referred to almost universally as the Cake Tin.

Nigel Keats, media director of Clemenger, said this was a serious concern.

"The stadium has got to be known by the sponsor's name and referred to as such. It's a tricky area. You get something that's got a nickname like the Cake Tin... then that dissipates your value. The other thing is the media don't have to refer to it as the sponsor's name. The main benefits are lots of mentions in the media and when people are talking about it."

Westpac spokesman Mark Watts said they had researched the 'Cake Tin' issue.

"It's given us extremely strong brand exposure. Looking at the figures, we've had well over three million visitors to the stadium," he said.

"Our evidence is the nickname is not as widespread as you might think."

Watts would not comment on what Westpac paid for the naming rights but said it was hard to put a value on the sort of exposure you get when every time there was a northerly in Wellington, every plane flew directly over the stadium with the sponsor's name in unmissable font painted on the roof.

Brand exposure is not the only benefit, though. For once, the cash-rich multinationals get to play the good guys.

"There's another trend in valuing these things which is how you make it mean something," said Martin Gillman of Total Media.

"Just simply tacking your name onto the property doesn't necessarily win over the hearts and minds of the people. They've got to find ways of leveraging the value from it."

Keats agreed, saying there was an element of goodwill involved. "People realise stadia are really expensive to construct, are not used a lot, and sponsorship is one way to get good facilities in their city."

So what sort of price tag do you put on that? That's when it gets harder to calculate, with neither sponsors nor stadium managers willing to comment on the terms or values.

"I can't imagine Eden Park will be worth $10 million per year, although perhaps it is to somebody," Gillman said.

Another industry source, who did not want to be quoted, said he couldn't imagine the ceiling would be much higher than $5 million a year over any time period approaching a decade.

So it seems that even if the rights to Eden Park were sold at the top end of the scale, it would make only a small dent in the $320 million price tag.

When Jade acquired naming rights to Lancaster Park in 1998, Christchurch City Council was told to expect $64.7 million over the next 15 years "from naming rights, key money and the sale of suites and club seats".

Gillman said while it was too hard to put a figure on the price of the rights, you could guarantee that the package would be complex.

"It's not just about the naming rights to the stadium, it's all the hospitality rights you'd build into it," Gillman said.

"That's where you end up getting a lot of your value. It's seriously difficult to assess. It's not just a matter of saying 'right, to call it Westpac Stadium, it's going to cost X amount'.

"But somewhere like Eden Park, it's going to be well into the seven figures annually but a sizeable chunk of that is going to be in the value you get back for hospitality."

Other ways of leveraging value was using signage within and outside the stadium.

"And the reason a lot of financial institutions get involved is a lot of it works on a contra deal - low and no interest loans as opposed to cash," Keats said.

That way, you get a piece of your Cake Tin and get to eat it, too.