April 28th, 2008

A Zoo by Any Other Name?

By Joel Russell
Los Angeles Business Journal

Advertising: L.A. could sell signage for landmarks.

The Pampers Greek Theater? The Purina L.A. Zoo? Not likely.

But under Mayor Antonio Villaraigosa’s proposal to sell the naming rights for Los Angeles facilities, the possibility exists.

The concept could generate more controversy than revenue, advertising experts say.

In response to a projected deficit of $406 million, the mayor’s budget identifies selling naming rights for city sites as a way to way to generate cash. While the city already has contracts for ads on buses, benches and airports, the 2008-2009 budget proposes hiring a media agency to inventory city assets and develop a plan to capitalize on them.

“It’s viable, it’s just a very challenging territory to navigate,” said Mike Wolfsohn, creative director at Ignited Minds LLC ad shop in Marina del Rey. “You have to be objective in balancing the monetary goal without compromising the desires of the people these properties are intended to serve.”

The city’s highest profile assets are the Greek Theater and the Los Angeles Zoo. Other properties that could get corporate names include a dozen golf courses, followed by a scattering of senior centers, wedding gardens and parks.

“I would be cautious to make sure the core values of the brand align with the venue,” said David Angelo, chairman of ad agency Davidandgoliath in El Segundo. “The last thing you want to see is a brand associated with the Greek Theater that doesn’t belong there. It would be a desecration to rename it the ‘Pampers Greek Theater.’ ”

That said, Nashville-based guitar maker Gibson bought the naming rights to the Universal Amphitheatre in 2005, under a 10-year deal worth $14 million. So the Greek Theater is a likely candidate for a new name.

“It could attract a sizable brand commitment,” said Zack Rosenberg, general manager at Horizon Media Inc., an ad buying agency in Century City.

Angelo believes public acceptance of the plan will hinge on the idea that the money will keep facilities open during a financial crisis.

Rosenberg declined to speculate on how much the city could collect from a licensing program, but noted the Staples Center deal as an example. Although Staples Inc. paid $100 million for the naming rights, the contract lasts 20 years so the average income totals about $5 million per year.

Also, New York City in January proposed a plan to sell the naming rights to sites at Central Park and other locations. The plan estimated the revenue at $3 million per year.

A few million here and there won’t go far toward solving the city’s money problems.

“This is part of a budget solution; it’s not meant to be the end-all,” said Don Hinchey, vice-president at the Bonham Group, a Denver-based consulting firm that negotiated the naming deal for the Honda Center in Anaheim.

For corporate marketers, success will depend on the relevance of a brand to the venue that bears its name. Wolfsohn cites the Kodak Theater as an example, since Kodak and film go together in the consumer’s mind.

That caveat also applies to smaller venues, although geographic proximity could make a grocery chain relevant to a senior center or a golf course regardless of the direct association with the brand, Rosenberg noted.

“There’s a surprisingly large appetite for this among various sized corporate entities,” Hinchey said. “Even small and local entities could have an interest in a facility, particularly if it blends with their product or services.”

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