March 30th, 2008

Dallas Cowboys Stadium Naming Rights May Top Record Deal

By Suzanne Marta
The Dallas Morning News

Branding rights could bring $20 million or more a year

The Dallas Cowboys and owner Jerry Jones may have a title before they even kick off in their new stadium – the holder of the biggest naming rights deal in sports history.

The current top spots go to the Barclays Center, future home to the NBA’s New Jersey Nets, and Citi Field, where Major League Baseball’s New York Mets will play in 2009, each pulling in 20-year, $400 million contracts.

“I would think the Cowboys would expect at minimum what’s been done in New York and look to exceed it,” said Jim Biegalski, who specializes in naming rights for Millsport, a Dallas-based sports marketing firm.

Sports marketing experts say the marketing prowess of Mr. Jones, combined with the team’s global brand strength, could translate into a record.

A spokesman for the Cowboys declined to comment on the team’s efforts. However, the team’s executive vice president, Stephen Jones, said in a news conference this month that the Cowboys have had talks “with a few people” regarding the stadium’s name.

Sports business experts say the companies that could consider such a deal could include some of the region’s largest firms – not to mention others not based in the region.

After all, the Cowboys are the world’s most valuable sports franchise, worth about $1.5 billion, according to the most recent report by Forbes magazine. That’s more valuable than even Manchester United, the world’s top soccer team, and the New York Yankees.

The new stadium under way in Arlington – whose construction costs have grown to an estimated $1.1 billion – is expected to be the sport’s premier facility, one that team officials have suggested could go unmatched in its amenities.

It is already set to receive additional exposure after the Cowboys kick off there in 2009. The AT&T Cotton Bowl Classic will move to Arlington from Dallas in 2010, and the Super Bowl will be played there in 2011.

While a naming rights deal could be several months away – experts say Mr. Jones could wait until shortly before the 2009 season opens to make an announcement – it will involve far more than simply hanging a name on a building.

Marketing partners
Today’s stadium deals are part of multifaceted marketing strategies by both the teams and the companies that sign up.

Companies are looking for broad-based, exclusive promotional rights, the ability to develop new and uniquely licensed products and special events they can offer to key customers. Deals made in recent years include more opportunities to sell products – including to the team itself.

Such added layers mean contracts for naming rights become more like a courtship than a business transaction, as both parties try to weigh how they might profit from an alliance.

Likely candidates for the Cowboys stadium would probably have established brands, a strong cachet and a vision for the stadium as part of a powerful marketing effort, says Rob Vogel, president of the Bonham Group, a Denver-based sports consulting firm.

“The Cowboys consider themselves a mega brand, so they’ll want a mega brand in the corporate world to associate with,” he said.

Mr. Vogel says a telecommunications company might take interest, since those firms have a strong presence in Texas. Examples could include AT&T and Verizon Communications.

Energy companies, such as Irving-based Exxon Mobil, also might be strong candidates, given their importance to the Texas economy and the booming profits many of those firms have enjoyed in recent years, said Marc Ganis, president of Chicago-based sports business consultancy Sportscorp Ltd.

“An energy company would be a natural fit for a lot of reasons,” he said.

At least two big North Texas companies seem to be unlikely candidates. American Airlines already has its name on arenas in Dallas and Miami, and Southwest Airlines doesn’t have a track record with stadium branding.

Mr. Ganis said the team isn’t likely to limit itself to North Texas companies, adding that the venue could be a kickoff point for a multinational firm trying to establish a presence in the United States.

The financial staying power of company candidates will undergo careful analysis after the recent collapses of some stadium sponsors – including the Houston Astros’ Enron Field (now Minute Maid Park) and the Texas Rangers’ Ameriquest Field (now the Rangers Ballpark in Arlington).

“You don’t want to be changing the name of your stadium in five years,” Mr. Biegalski said.

And while the sluggish economy could pare the list of companies vying for the Cowboys stadium, experts said they don’t expect it to rule out a deal.

“Anyone who looks to do this type of transaction is looking long term,” Mr. Vogel said.

Finding the right fit
Naming rights have come a long way since the 1980s, when the Los Angeles Lakers sold rights to The Forum to Great Western Savings & Loan.

“There’s a lot more attached to these deals now,” said Jeanie Buss, whose dad, Lakers owner Jerry Buss, did the original deal with Great Western.

Ms. Buss, executive vice president for the team’s business operations, said teams must think carefully about how the branding will work for the stadium.

“A team is building its home, and you want it to stand for something,” she said. “For us, it worked out great – it was the Great Western Forum. It fit better than it probably would have been if we were the Clorox Forum.”

Typically, the most successful deals are those formed before the stadium opens. Those made after a venue has been opened face challenges in getting the new name accepted – and used – by the community.

Recent comments by Sam Zell, whose Tribune Co. owns the Chicago Cubs, that he would consider selling the naming rights to Wrigley Field sparked community outcry.

The home of the San Francisco 49ers – Candlestick Park – has undergone three christenings since the first deal with 3M was signed in 1996, starting a boom in naming deals.

Dissatisfied with naming rights agreements, the community passed a measure in 2004 that rules out future deals.

Mega deals, markets
Price tags for naming rights are in part a reflection of the size of the media market – the larger the market, the bigger the deal.

The two largest deals – about $20 million a year – have been in New York, and a deal for the $1.3 billion new home of the New York Giants and the New York Jets is expected to eclipse those agreements.

The Dallas deal should reach $15 million to $18 million a year, based on market size and the appeal of the NFL, Mr. Ganis said.

But you have to factor in the marketing power of the Cowboys – and their owner.

Mr. Ganis said anything above $18 million – which he and other experts said the Cowboys could garner – would reflect “the Jerry Jones premium.”

“Jerry Jones is the best pure marketer in U.S. sports,” Mr. Ganis said. “He has been able to generate more attention and more revenue for his brand than any other team in sports. In this area, he has no peer.”

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