The secret to successful naming-rights deals
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The secret to successful naming-rights deals

Old Trafford might still be Old Trafford for now, but from July 1 Manchester United’s training ground will be renamed the Aon Training Complex as part of an eight-year sponsorship deal worth £120 million ($185 million)

At the moment Aon insurance company is the main sponsor of the football club’s kit, but is set to be replaced by Chevrolet from the start of the 2014 season. The new deal will see its trade mark emblazed instead on training kit worn by Manchester united players and coaching staff at all domestic matches and during training sessions.

The promotional value of having the team wear branded kit during training sessions at the soon-to-be Aon Training Complex is uncertain, however. The training ground, currently known as the Trafford Training Centre (or simply “Carrington”, where it is located in Manchester) is surrounded by fences and trees to ensure media and opponents cannot spy on the team’s training tactics. But players are likely to appear in Aon kit during interviews for the club’s own TV station filmed at the training ground.

How to do the deal

Managing IP has published a number of articles highlighting the opportunities and risks posed by naming rights deals.

In Fields of opportunities, Robin Lightner Maisashvili and Nina Smith explained the problems of paying to name an existing stadium where fans have a sentimental attachment to the existing name. Invesco Field at Mile High in Denver, for example, is still referred to as Mile High by many fans and some commentators. In cases like this, clubs can structure deals that see sponsors take naming rights to sections of the ground. Fenway Park in Boston, for example, has the Crown Royal Club and the Volvo Hall of Fame Club.

The opportunities for sponsorship are also expanding, say the authors, with the limits set only by the creativity of marketing departments. Deals might allow for lighted roof signs for nighttime viewing by aeroplane passengers; uniforms of ushers, food service and other vendors; cups, plates, and napkins; and team stationery.

In Look before you leap into naming rights agreements, James Weinberger warns would-be sponsors that many sports clubs want to tie their partners into long deals given the cost and disruption of renaming grounds. Rather than trying to negotiate this down, sponsors should consider whether they want to be committed for a long period of time, given that the “potential risks and benefits associated with such a deal are going to be amplified as a result”.

While it might not be such a worry for Aon, Weinberg recalls sponsors who have named grounds of clubs that have failed to deliver big (or indeed any) wins. At the time of writing, for example, the PNC Bank-sponsored Pittsburgh Pirates were in the midst of their seventeenth consecutive losing season and has not made the baseball playoffs in all of that time.

“No matter how attractive the stadium, and no matter how pleasant a fan's experience there might otherwise be, the losing perception may be leaking from the baseball team to the stadium itself. In that case the brand owner is probably going to experience negative perception that it might not have anticipated,” says Weinberger.

The Fross Zelnick lawyer outlines the benefits and drawbacks of structuring deals with licences, consent agreements or broader sponsorship deals. He highlights challenges for lawyers using licensing deals including considering the cost implications and ensuring that the brand owner is able to exercise a certain degree of quality assurance over the way the trade mark is used.

Finally, he retells the cautionary tale of the Houston Astros baseball team, which signed a 30-year naming rights deal with a local company in 1999 worth more than $100 million. Unfortunately for the Astros, the company was Enron.

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