Brands Spend Big on Naming Rights, but Is It Worth It?
Today’s guest columnist is Francis Dumais, managing partner at Elevent.
In August, the Cincinnati Bengals and Paycor inked a 16-year, multimillion-dollar deal for the stadium naming rights for what was previously known as Paul Brown Stadium. In 2021, the famed Staples Center in LA, home to the Lakers and other local professional sports teams, became the Crypto.com Arena in a 20-year, $700M deal.
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Obviously, brands believe these are good deals or they wouldn’t enter into them, but how do consumers feel about it? Turns out the answer is “not so much,” according to a recent survey designed to uncover the impact of sports sponsorship on consumer perspectives.
Elevent asked 2,000 American adults 18 and over if they knew that certain stadiums had been renamed. In pursuit of a cross-section of consumer perspectives, we asked about four stadiums that are relatively well known across the U.S. and that are home to different types of professional sports teams:
Fleet Center to TD Garden (Boston)—This 20-year, $100M deal is set to expire in a couple of years, but 77% of consumers surveyed in 2022 weren’t aware of the name change.
New Meadowlands to MetLife Stadium (East Rutherford, N.J.)—Only 29% of survey participants were aware of the stadium name change completed in 2011 (a 25-year, $400M deal). In other words, more than 10 years later, 71% of consumers surveyed remained unaware of the change.
US Cellular to Guaranteed Rate Field (Chicago)—In 2016, Guaranteed Rate purchased the naming rights in a 13-year deal. Here we are five years later, and 83% of consumers surveyed are oblivious to the switch.
Staples Center to Crypto.com Arena (LA)—The largest naming rights deal in sports history was announced in 2021, and 27% of respondents are aware of the change. Not bad for a relatively new deal for a venerated stadium, but it remains to be seen if the name Crypto.com catches on.
Likewise, we asked survey participants if the name of the stadium influenced their brand perceptions, and roughly 70% responded “no.” Interestingly, the MetLife deal had the most positive brand impact (22%), and the Crypto.com deal had the most negative impact.
Do these results suggest that brand sponsorships in sports have minimal impact on consumers? Not when you look at the big picture. For instance, as Sportico recently reported, MLB is anticipating a revenue spike from jersey-patch sponsorships, which take advantage of individual player branding but within the team setting.
Our survey revealed there is definitely a positive correlation between sponsorship and purchase intent. More than half of respondents, 59%, reported being more likely to purchase from sports sponsors that they like. Moreover, 21% of respondents noted that they chose to do business with a brand only because it sponsors a sport or sporting organization.
In contrast, 15% responded that they have stopped doing business with a brand that sponsors a sport or sports organization they don’t like. An additional 17% reported that while they have not stopped doing business with a brand based on sponsorship, they have thought about it.
The bottom line is that sports sponsorships matter to consumers, and that—good or bad—brand sports sponsorships and purchase intent are connected. Unfortunately for brands, there is rarely a simple yes or no answer when it comes to sponsorship decisions.
As someone who has been helping brands for more than a decade, it’s important to ask the right questions when making these decisions, including:
How are particular niches of the sports market performing?
How well are your current sponsorship investments, if any, doing?
Where are your competitors investing?
What is the purpose of your sponsorship, and how does it align with your brand values?
How much is a sponsorship really worth?
In answering these questions, data should be integral to your decision-making, evaluation and measurement processes. Find a partner that can help you cut through the clutter and reduce risk in these high-dollar decisions using reliable, real-world data.
As co-founder and managing partner at Elevent, Dumais works closely with clients to optimize sponsorship in high-ticket sports, music and other entertainment opportunities, from selection, valuation, negotiation and activation to performance measurement and ROI.
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