March 29th, 2008
For Nats, What's In A Name?
By Barry Svrluga
The Washington Post
Millions Are Riding On Stadium Sponsor
The road signs on Interstate 395 North are clearly marked, directing baseball fans to the brand-new venue in town, “Nationals Park.” The stadium itself is affixed with hundreds of thousands of dollars worth of signs that glitter the same message: “Nationals Park.” And when ESPN broadcasts the first game from the Washington Nationals’ home Sunday night, the announcers will say, countless times, “Nationals Park.”
Yet Washingtonians shouldn’t wed themselves to the idea of calling the $611 million, 41,888-seat ballpark by that name for eternity. Indeed, the Nationals—like almost every other professional sports team—are trying to sell the stadium’s name to a corporate sponsor.
The idea: Create a relationship that the club hopes will bring in $8 million to $12 million annually for 10 or 20 years. Yet even though the Lerner family took control of the team 20 months ago, the ballpark still has a name that will change. The Nationals hired Wasserman Media Group, which has sold more than $2 billion in sports sponsorship around the globe, to run what they consider to be a complex transaction. The process, according to Nationals President Stan Kasten, is much more than just slapping up a few signs and renaming the stadium after a company.
“It’s absolutely not that,” Kasten said. “We wouldn’t just sell someone the name to put it on a billboard and say, ‘Goodbye.’ . . . This has to be someone who has the same ideas about the purpose of the ballpark and the relationship to the customer, that kind of stuff. So it just takes time. It’s a unique thing, and it’s identified with your club as intimately as anything can be for a very, very, very long time.”
Thus, the Nationals are taking their time to, as Kasten said, “find the right fit.” There are, however, drawbacks to that approach, according to some experts in the field. “Clearly, it makes more sense to have a naming rights partner in place before you open—and usually six months to a year before you open,” said Dean Bonham, chairman and CEO of The Bonham Group, a Denver-based sports and entertainment marketing company.
Had a deal been in place already, the corporate sponsor would be identified with the park from its first day of existence—just as CitiBank will be identified with the New York Mets’ still-to-come Citi Field, just as telecommunications behemoth MCI was linked to Washington’s MCI Center two years before it opened. Some experts believe a relationship that begins on Opening Day—or, in some cases, years in advance—means the fan base will permanently link the corporation with the team.
“With every day that passes once the ballpark is open, the value of that rights deal could very well decrease,” said David Carter, the executive director of the University of Southern California’s Sports Business Institute. “There’s so much upfront media attention and buzz, and that impacts how the name would be received by the public. . . . The opening weekend is a tremendous amount of positive publicity, and that could have a halo effect to a sponsor if one was in place.”
Analysts who follow such deals also allow, however, that such relationships are difficult to establish and maintain, particularly in a marketplace in which mergers are common and company names change from year-to-year. Washington, too, is a seat of government but not a center of commerce, so a deal like the Mets’ with Citibank—a complicated 20-year arrangement that could bring in $400 million for the club—is unlikely. Nationals Park sits 2 1/2 miles south of Verizon Center, 13 miles west of FedEx Field, so two corporate behemoths are already represented in the market. The list of companies that can afford such an arrangement is relatively short.
“Teams are holding out for premium rates in a very gutted marketplace,” said Dennis Howard, an expert in naming rights deals from the University of Oregon’s Warsaw Sports Marketing Center. “Now, we’ve got almost 80 percent of the venues that house major league teams in the four major leagues [Major League Baseball, the NFL, NBA and NHL] that are corporately named. That’s a lot of clutter, and a lot of your national firms that are looking at this as a branding opportunity have already spent their money. The prospect pool has declined substantially.”
So the Nationals, with Wasserman’s help, are sifting through potential partners. Experts said such a deal doesn’t fit with some local companies. Marriott Hotels and Resorts, for instance, already has their names on buildings worldwide. Others, like Geico insurance, market heavily with national television campaigns. Kasten said that the club has considered local, national and international companies—as well as “a number of talks that fit into a category of companies you’ve never heard of, because this gets them heard overnight everywhere in the world.”
“Look at the universe of corporations that are capable of, willing to, and it’s appropriate for them to invest in a naming rights deal,” said Bonham, who has brokered such deals for nearly 15 years. “That’s a very small universe. It just takes time to find the right company.”
If and when the Nationals find the right company—at the right price—those signs on the highways and the dugout and the ballpark itself will come down.
“When the time comes—which, who knows when that will be—we’ll have to go through the process of changing everything over,” Mark Lerner, son of principal owner Theodore N. Lerner, said yesterday as he looked around the park. “It’s going to be a huge and expensive task between the signs on the roadways, and all the signs in here—all these neon signs. It’s going to cost a fortune—when the time comes.”