The Benefits of Naming Rights Sponsorship

Why Naming Rights? 

This is a question we often get from prospective corporate sponsors who are curious about this growing trend in the sponsorship world.  This week's post highlights what many corporate sponsors and sports and entertainment properties find attractive about naming rights by covering some of the benefits that both sides gain when entering into a naming rights agreement. 

 The tremendous growth in sponsorship in recent years is due, in large part, to the actions of corporate decision-makers who view sponsorships as a cost-effective method of achieving specific marketing objectives. Sponsorship marketing, and naming rights in particular,  is particularly valuable for businesses due to its effectiveness in introducing new products, helping new or established products contend with competitive brands, and increasing corporate brand awareness.

 A recent study by sponsorship evaluation firm Performance Research found that nearly 90% of sports fans in Chicago, Boston, Indianapolis, and Minneapolis were able to correctly name stadium or arena sponsors without prompting.  Having corporate branding on a sports and entertainment complex offers the naming rights partner coveted ‘top of mind’ brand awareness for regional consumers and affiliated sports fans.

Findings from the same study revealed that 20% of the U.S. sports fans questioned reported that they personally benefit from corporate-named stadiums and arenas, a positive association that can only serve to improve consumer’s relationships with sponsors’ brands. Naming rights offers a larger opportunity for the sponsor to get consumers to engage with their product by enhancing fan experience through mediums such as freebies, smart phone apps, or providing added entertainment value.  It is well known that the most effective marketing campaigns are those that enhance consumer experience, facilitating an emotional connection with the brand, which often translates into increased consumer loyalty.

On the property side, the benefits of securing a Naming Rights partner are many. From gaining extra annual revenue to the ability to eliminate or minimize various expenses from in-kind agreements, forging a partnership with a high level sponsor can offer a serious boost to a property’s bottom line.

Here are some other ways that sponsor corporations and recipients benefit from naming rights:

 Staying Relevant

In the competitive marketplace, maintaining relevance and visibility is a brand’s #1 priority. Often, naming rights is not necessarily about increasing ROI, but reminding consumers that a brand exists, which can translate into brand preference when considering what product to purchase. 

Free advertising and Brand Exposure

A naming rights partnership offers a huge return on advertising dollars that is far above what can be achieved through traditional marketing channels. Much of which comes in the form of offsite promotion through media mentions. The stadium, and thus the name of the corporate partner, gets innumerable free mentions on websites, newspapers, magazines, TV, and radio when media sources cover sporting and entertainment events. Seasonal games in all four major sport categories garner valuable unpaid ad time with championship games offering huge impression values that reach numerous demographics. The average cost per 30-second national television commercial during Super Bowl XLIX in 2015 was an incredible $4.5 million, but there was no charge for media mention of the stadium where it took place. When all opportunities for passive advertising are taken into account, naming rights is a level of sponsorship that pays huge dividends

Financial boost to the team

It goes without saying that teams who occupy a stadium with a Naming Rights sponsor benefit considerably from the partnership. A naming rights partnership offers a great opportunity for corporations to bask their brand in the ‘halo effect’ of a successful team and its famous players. In exchange, teams receive a large boost to their bottom line which contributes to player incomes, new equipment, upgrades to facilities, and increases team negotiating power with corporate sponsors in smaller level sponsorship contracts such as shirt deals.

Naming rights sponsorship occupies the highest point on the sponsorship pyramid, and for good reason given the many benefits that it offers. The competition to gain consumer attention is intense as ever, and increasingly, corporate sponsors are choosing to use naming rights to rise above the advertising clutter normally associated with sports and entertainment properties to gain direct access to consumers.


-Erin Beaudoin