First Published on Running Rugby.
Ulster’s latest announcement that their famous Ravenhill stadium would be rebranded as part of a naming rights sponsorship deal with Kingspan was the latest in a increasing trend. In the last month, Scottish Rugby announced a similar partnership with BT Sport for Murrayfield Stadium in Edinburgh, with the media giants also adding their name to the Arms Park in Cardiff.
Stadium naming rights is hardly a new phenomenon in rugby with Ireland’s Aviva Stadium and Saracens’ Allianz Park serving as two prominent examples. And sometimes it’s not the entire ground but just a part of it – both Leicester and Harlequins have had individual stands at Welford Road and The Stoop respectively named after sponsors.
Who benefits most out of these arrangements? The Belfast Telegraph reported that the Ulster deal with Kingspan would be worth around £4m to the province over ten years and multiple media sources have speculated that the BT Sport deal will land Scottish Rugby as much as £20m. There is certainly a financial incentive on offer for the clubs but the social media backlash from Ulster fans last week proves that sometimes it’s not always a well-received change.
When moving to a brand new arena, the issue of supporter connection is less of a problem. When Saracens’ moved into their new home in Barnet a little over a year ago, it was with a six-year deal reportedly worth £8m with German financial services provider Allianz that would see the ground named Allianz Park.
The money from the deal accounted for almost half of the £20m cost of their new home, with Allianz also becoming Saracens' shirt sponsor. With the benefits of the deal clear to see from a Saracens point of view, what value was there to be had for Allianz? They already had two major flagship stadium deals in place with Munich’s Allianz Arena and the Allianz Stadium in Sydney.
"The partnership with Saracens will boost brand recognition for Allianz in the UK,” said Allianz's Global Head of Brand Management Christian Deuringer at the time.
"The country is an important market for Allianz, with nearly 7,000 employees, who offer clients services in personal insurance, credit insurance, corporate insurance, assistance and asset management."
It also becomes clear that there is a desire on behalf of brands to forge an emotional investment as well as a financial one. Deuringer also spoke of the idea to build an ‘Allianz Family of Stadiums’.
He said: “Sport is an international language that brings together people from all walks of life, creating local and global communities based around shared passions and interests. Communities play an integral role in our business of helping people to progress in life. This is why Allianz is heavily involved in sport sponsorship around the world.
"There is a strong emotional aspect to being the naming rights partner of a sports stadium – for a non-tangible brand like Allianz, it quickly becomes the ‘home of the brand’ and a place of corporate pride for our employees and partners."
The renaming of a stadium where the name is firmly entrenched into the hearts and minds of a nation’s sporting public is a more challenging proposition, though the numbers continue to show that it is a hurdle worth overcoming.
When Dublin’s Lansdowne Road was to be redeveloped in the mid 2000s, Aviva reportedly paid an estimated €54m (£43m) for a ten year claim to the naming rights. With the net figure to redevelop the ground €411m (£330m), Aviva's sponsorship fee would have equated to 15% of the cost of the stadium.
The potential for the Aviva Stadium to host 20 events per year, including Ireland rugby matches in both the Six Nations and Autumn Internationals, one-off Heineken Cup fixtures and Ireland football games, meant that there was always going to be significant value in sponsorship.
And Aviva’s investment means the brand gets its name embedded on the seats, signs, marketing kiosks as well as a suite and exclusive use of the building to entertain customers and employees. There was an initial reluctance from some at the loss of the name 'Lansdowne Road' but Aviva worked to counter that.
Speaking to Running Rugby, Aviva group sponsorship manager Mark Russell said: "Aviva’s sponsorship of Lansdowne Road Stadium was initially based on supporting the brand migration of several Irish insurance companies to Aviva. The Aviva Stadium has been our flagship sponsorship over the last four years and has been phenomenally successful in achieving brand recognition for Aviva.
"Once that recognition was established we worked on deepening our connection with Irish sports fans by enhancing their match day experiences both at the game and at home, and creating a sustainable link between grassroots sport in Ireland and the Aviva Stadium. We will continue to develop new ideas to maximize the sponsorship over the coming seasons."
During negotiations for the Aviva deal, Onside Marketing, a locally based firm, provided numbers from naming rights deals done worldwide up to 2008 – the vast majority of which were stadiums in North America. Their data showed that of the 122 teams in American baseball, basketball, football and hockey, about 70% played in arenas named after corporate sponsors, with an average value of $4m (£2.38m) annually over a 12-year term.
Whilst the benefits to the club tend to be almost entirely financial, the perks of stadium sponsorship to a brand are less quantifiable but no less significant. Arsenal Football Club’s partnership with Emirates, one of the most lucrative deals in football, extends to both shirt and stadium sponsorship and is thought to be amongst the strongest in the UK.
A December 2013 study by Repucom found that 88% of people attending sport in Britain are aware that Emirates own the naming rights to Arsenal’s home stadium, with awareness of the shirt sponsorship deal also the highest of all Premier League clubs at 62%.
Repucom managing director Charlie Dundas said: "Emirates are seemingly reaping the benefits of their dual shirt and stadium sponsorship, currently the most recalled stadium naming rights partner of any UK sporting venue as well as most recalled shirt sponsor in the Premier League. Comparably, Manchester City and Etihad have adopted a similar model to Arsenal and have recorded encouraging levels of awareness in the UK as a result.
"Despite the obvious increase in cost involved in a dual sponsorship programme, it does seem possible that this sponsorship solution has the potential to generate big impact and much quicker ROI (return on investment) for investors."
Transferring the dual sponsorship model to a rugby framework, Saracens and Allianz are the only club and brand that currently employ it, though Harlequins have just ended a seven year period with Etihad as sponsors of both the playing shirt and one of the stands at The Stoop.
It would appear that, with the correct strategy, a naming rights deal has the potential to reap rewards for both sides of the negotiating table, be it in cost or brand awareness. The remaining constant is the supporters and easing the transition for those who still hold dear the traditions of the club and its spiritual home.
When asked if he felt Ulster supporters might be upset at the Ravenhill name change, chief executive Shane Logan told the Belfast Telegraph: "When my daughter gets married her name will change but I hope it is for the good. We can't grow the game the way we want to without considerable sponsorship and government funding and our fans supporting us in increasing numbers. So I think people will get used to the name and grow fond of it."
By Mark Tilley, Content & Marketing Manager at Big Bug Sports .
Global Sports: the world’s leading specialist careers platform for the international sports industry