OPINION: As the naming rights deal at Perth’s iconic stadium nears its end, it’s worth considering how corporates gauge value from the commitment.
A recent visit to Perth’s spectacular stadium got me thinking about many things other than football, given the unflattering scoreline facing West Coast as the game ground on.
I paused and stared at the massive Optus sign and began wondering if the telco giant had realised the return on investment it committed to back in 2017. The huge deal, estimated to be worth up to $50 million, comes to an end next year and has not been without controversy in recent times.
It made me consider the broader value of stadium naming rights. It is a deliberate partnership that attempts to connect the physical entertainment space with a brand to build public awareness.
One that lives in the minds of a particular Perth generation is the old Challenge Stadium in Mount Claremont. The Challenge deal was one of the original naming rights tie-ups in Perth and seemed to stick long after the bank went under in the 1990s.
Typically, stadium naming rights have the most chance of success when they achieve two things. First is when they are named after a newly built stadium. It’s fair to say Optus has achieved this by being attached to the birth of a stadium that hosted several iconic events in its first few years. The second is to create a strong local connection that can build the brand’s image in the community.
Perhaps, a better example of that is RAC Arena, which was able to tap into a parochial community whose membership has a sense of pride in the brand and alignment with the facility.
Stadium naming rights often fail when a historical landmark is renamed or changed, which causes angst among fans and supporters. Most facilities will safeguard against this, forgoing big sponsorship dollars for the right to retain heritage, such as the MCG, WACA, Lord’s or Madison Square Garden.
There is also a perspective that we shouldn’t sell-off stadium naming rights at all and instead capitalise on the global tourism reach of promoting our own city’s name. Politicians will often disagree with that specific return on investment.
One risk for companies investing in naming rights deals is that international events are often written out of the agreement, such was the case with the FIFA World Cup and various international cricket matches. This means the brand loses global reach, which may be the most attractive part of the proposition.
At a smaller, more local level, West Australian Football League grounds and other facilities can achieve good outcomes by partnering with community-minded organisations such as Good Grocer Park (the home of East Fremantle Football Club) or Sullivan Logistics Oval, which houses Subiaco and East Perth Football clubs.
Understanding the value of naming rights is a complex and inexact science. While there are metrics such as Nielsen’s QI Media Value from broadcast rights and other peripheral coverage, brand sentiment and public connection is also seen as a key driver of value.
The most expensive stadium rights deal in the world is believed to be Crypto.com Arena, home of the LA Lakers, at $US35 million per year, followed by Allegiant Stadium in Las Vegas ($US25 million per year) and then Spotify Camp Nou, Barcelona FC (€20 million per year).
• Tyson Beattie is general manager, business operations at the Western Force
