April 14th, 2011
Two Team Playoff Arenas Pay Off for Sponsors
It isn’t too early to name at least four big winners of the upcoming NBA and NHL playoffs: Wells Fargo, Staples, United Airlines and TD Ameritrade. Why those companies? They’re the four that own naming rights to the four buildings that will host postseason games in both hockey and hoops – in Philadelphia, Los Angeles, Chicago and Boston (New York’s Madison Square Garden will also showcase both sports this year, but alas, no naming rights deal there).
Some calculations done by Front Row Analytics, a consultancy that values sports naming rights deals, estimates that each arena will yield a minimum of just over $280,000 in value for its naming rights sponsor just from the four first round games that each arena is guaranteed to host (two each from its NBA and NHL teams). By extension, naming rights sponsors in Washington (Verizon), Atlanta (Philips) Miami (American Airlines) and other one-team playoff venues are guaranteed roughly half that amount.
And that’s just the beginning. According to Front Row, each playoff game an arena hosts yields exposure value to the naming rights sponsor based on the airtime the brand gets during a game and follow up highlight shows (historically three-plus minutes in an NHL game; closer to five minutes in an NBA game, where the company logo sits in two sports on the court) and comparing the airtime to the cost of a 30-second spot on the telecast. The formula blends the home and road markets, factoring in the 30-second spot cost in each. Example: the Wells Fargo Center in Philadelphia will host the local Sixers against LeBron James and the Miami Heat, a high profile opponent from a large market that increases exposure.