clock menu more-arrow no yes mobile

Filed under:

Arena bidders seek a bargain; Naming rights are millions less than other sites

By Joan Verdon
The Record (Not Online)

The three apparel companies bidding for the right to rename the Continental Arena are hoping to get something the fashion world is very familiar with a markdown.

The amounts they are offering reportedly between $1.5 million and $2 million a year represent a bargain in the high-stakes world of stadium naming rights, sports industry experts say. But branding experts say there's no guarantee the rights will produce a good return on investment, even at a discount.

Barclays bank is paying $20 million a year to put its name on the Brooklyn arena where the Nets professional basketball team hopes to be playing in 2009. Prudential gets its name on the new home of hockey's Devils in Newark for $5 million a year. Compared with those prices, $2 million for the Meadowlands arena is a good deal, said Brett Yormark, president and chief executive officer of Nets Sports and Entertainment. He put together the sales pitch that convinced Izod, Southpole and Rocawear to bid.

"Traditionally, the fashion companies don't have the disposable dollars to go in there and compete with the financial institutions to put their names on the buildings," Yormark said. "But this was a very affordable opportunity and one that's a stone's throw away from the fashion capital of the world."

The three companies compete in the same arena men's casual streetwear and Yormark said winning the naming rights could be a "game-changer" for any of the three. "Putting your name on a very visible public building provides a huge differentiator," he said.

But branding expert Robert Passikoff, founder and president of Brand Keys Inc., a New York consulting firm, said that while having a name on the arena will boost awareness, it doesn't always boost the bottom line.

"The question is, are you going to get more sales, will you get more loyal customers?" he said. "There is no guarantee of that."

Each of the bidding companies has assets that could give it the inside track with the New Jersey Sports and Exposition Authority, which will select the winning bid. Rocawear was founded by Shawn "Jay-Z" Carter, the rap star who is a part owner of the Nets. Izod may have an edge as the oldest brand in the running, and the one best known by the over-50 crowd. Southpole, based in Fort Lee, reportedly is offering the highest bid and has a director of marketing who is a veteran of stadium rebranding.

David Strumeier, director of marketing, licensing and new business development, is the former president of Pro Player, the clothing company that won the rights to rebrand the former Joe Robbie Stadium in Miami.

Strumeier said Southpole is interested in the naming rights not just for the connection with the Nets, but because of the arena's proximity to the Xanadu retail and entertainment project. "Aside from it being a shopping attraction, it's going to be a tourist attraction," he said.

Marc Ganis, president of Chicago-based sports consulting company SportsCorp Ltd., said the Continental Arena deal offers an upside and a downside for the winning bidder. "It offers tremendous brand and name recognition in the largest market in the United States," he said. On the negative side, "the brand equity isn't going to stay very long in that building because the team [the Nets] is moving out and there is a brand new competing building a few miles down the road," he said.

Kenneth Munoz, a partner in SCP Worldwide in New York, a company that owns the St. Louis Blues hockey team and other sports franchises, said Continental Arena offers high visibility. "Millions of people are driving by there on an annual basis," he said. "It's like a billboard to the outside world."

Munoz, who was involved in the naming rights deal for the Scottrade Center in St. Louis, said in most arena deals teams and stadium owners seek "key sponsors you like banks, securities firms, major corporations, because they suggest a long-term partnership."

* * *

The name game

There's an upside and a downside to the arena-naming deal. Here's what Southpole, Rocawear and Izod would get and not get for their money.

The pros

* Brand and name recognition in a major market.

* A promotional partnership for a time at least with the Nets.

* A launching pad for a new brand or relaunching pad for an older brand.

* A large sign on a building millions of travelers pass every year.

* An arena with your name at a discount price.

The cons

* They are paying to put their name on the building, but many will still call it Continental Arena.

* The Nets may be gone in two years and the future of the facility is uncertain.

* The arena is older and can't command the same top dollar for naming rights as new venues.

* No way to know if it will translate into more sales.

* * *