May 30th, 2011
American Airlines wins either way in NBA Finals
American slapped its name on the arenas of both teams playing in the NBA finals back when stadium naming rights were a hot commodity — the AmericanAirlines Arena in Miami and the American Airlines Center in Dallas.
So whether the Miami Heat or the Dallas Mavericks win the title, American figures to get a lot of TV time. The same thing happened in 2006, when the Heat defeated the Mavericks in six games.
American bought the naming rights to those arenas a decade ago. According to published reports at the time, which American wouldn’t confirm or deny, it agreed to pay $195 million over 30 years for the Dallas rights and $42 million over 20 years in Miami.
Stadium-naming rights were trendy then, and they reached a fever pitch in 2006 when Citigroup agreed to pay $20 million a year to christen the New York Mets’ new baseball home Citi Field when it opened a couple of years ago. But sports sponsorships became harder to sell during the recession, and the business hasn’t fully recovered.
The Texas Rangers baseball team hasn’t found a name sponsor since ending a deal with mortgage lender Ameriquest in 2007. Today, it’s still simply Rangers Ballpark in Arlington.
New football stadiums in Dallas and outside New York still don’t have sponsorships. Dallas Cowboys owner Jerry Jones might have missed his best chance when his new stadium hosted the Super Bowl in February. Now, with an NFL lockout dragging on, there’s a chance of missing games this fall.
Recent deals have been underwhelming. Miami did a 1-year deal to rename the home of the NFL Dolphins Land Shark Stadium after a beer promoted by singer Jimmy Buffett, then it cut a 5-year agreement with a Canadian company. It’s now Sun Life Stadium.
In Jacksonville, Fla., the football stadium had no corporate name for two years after a deal ended with Alltel, a phone company acquired by Verizon. Finally, a local bank ponied up for EverBank Field.
Andrew Zimbalist, a sports economist at Smith College, said the financial crisis and recession hurt the market for naming rights. As consumers cut back, he said, companies questioned ever-higher prices for sponsorships.
“I don’t think that the market is collapsing, it’s just not as rich as it used to be,” Zimbalist said. He suspects that some teams, including the Cowboys, are turning down reasonable offers in hopes that sky-high prices come back.
Marc Ganis, president of Chicago-based sports business consulting firm Sportscorp Ltd., said CEOs may be gun-shy about naming deals after Citigroup was criticized for paying the Mets while getting $45 billion in federal bailout money.
American Airlines considered giving up its Dallas and Miami arena rights in 2003, when it hovered near bankruptcy. Company officials said such a move has not been considered since. American’s parent company, AMR Corp., has lost nearly $12 billion in the last decade.
It’s hard to determine the value of a company’s name on a stadium or arena, but that doesn’t stop marketing experts from trying.
Front Row Marketing Services estimates that American Airlines will get more than $10 million per game in national advertising. That’s based on the number of times the company’s name appears on screen or is mentioned by broadcasters.
But Front Row, which represents venues in naming-rights deals, assumes that a picture of LeBron James dunking is the same as a national advertising spot for American Airlines as long as there’s an American logo in the background.
“We don’t know if that’s right,” American Airlines spokesman Tim Smith said of the 8-figure estimate, “but there’s value in it, and we’re sure it’s a large amount.”
American has big airport hubs in both Dallas and Miami, and many out-of-towners going to the games will fly on its silver-skinned planes.
“It’s great exposure, and it’s fun,” Smith said. “We’ve got home-court advantage every game.”