January 30th, 2005
Metro Eyes Naming Rights, Sponsorship Deals
By Candace Smith
Imagine boarding a Metro train that’s pulling into Sprint Station or seeing pylons that read Gallery Place-Chinatown, “Home of Benneton.”
Like cash-strapped local governments and school districts, some transit agencies are flirting with the idea of selling naming rights and corporate sponsorships.
“That’s the next generation of thought for us,” said Leona Agouridis, Metro’s assistant general manager for communications.
Las Vegas’ Monorail counts on about $25 million in annual advertising from selling companies such as Nextel and Monster Energy drinks the rights to brand the stations and the individual trains.
Last week, New York City’s Metropolitan Transportation Authority approved a two-year deal with two marketing firms that may lead to companies affixing their corporate names on subway stations, lines, tunnels and bridges.
“It’s more a brand association,” said Tom Kelly, MTA spokesman. “Like Tarrytown up here is the big IBM headquarters. Obviously, the sign would state Tarrytown station, but if they wanted to put something underneath there that said ‘Home of IBM.’
Facing a $1 billion deficit by 2007, the agency is turning to other advertising besides billboards to bring in money, Kelly said.
Some Metro Board members said they would consider such deals.
“Like New York City, we need the money,” said Board member and District of Columbia Councilman Jim Graham. Metro is facing a projected $42 million deficit in 2006 and a $31 million gap in 2007.
The new chairman of the board said he’s open to the idea, but foresees controversy.
“I imagine some would take umbrage to coming to Victoria Secret Station, so if we went down that path, I think it’d have to be with great previous review,” said Dana Kauffman of Fairfax County, Va.
Metro officials said for now, they’re focused on rolling out ads wrapped around subway cars, installing televisions in trains and buses, playing silent commercials in train tunnels and installing automatic teller machines in rail stations. Riders saw bus wraps, more banners and signs in stations and on rail cars last year. The rest of advertising will appear this year, Agouridis said. The board approved the plan last year with the hope that it would eventually generate nearly $5 million annually.
The New York contract called for the marketing firms to pocket 15 percent of ad revenue if the agency made $30 million and 22.5 percent if they make $150 million or more.
But advertising experts question whether selling the naming rights and sponsorships in transit systems would generate the tens of millions of dollars that have been won in sports stadium contracts.
“One of the larger cities might be able to pull it off, but it’s doubtful,” said Dean Bonham, who’s negotiated ten stadium deals. He said a company can reach millions of people in multiple ways if its name is on a sports and entertainment arena compared to a subway system.
“You’re not going to have the emotional attachment. You don’t have the television, the radio. You may have publications, but it’s not going to be integrated across a lot mediums,” Bonham said.