What Is Naming Rights Agreement

The name of the stadium may have shifted in recent years to the promotion of company names, but in previous decades, it is largely because of the surnames of business creators. In thinking and negotiating naming rights and sponsorship agreements, it is always wise to act with some caution, with the benefit of good advice and lessons learned from recent history. Moreover, few would deny that naming rights and sponsorship agreements have proven to be useful revenue drivers for teams and significant investments for businesses, and we will probably see many more such agreements in the near future. New Meadowlands Stadium, the joint home of the New York Giants and New York Jets in East Rutherford, New Jersey, USA, was expected to eclipse both deals, with experts estimating it would be worth $25 million to $30 million a year. [4] In the end, it fell short of this benchmark, as MetLife Stadium earned $17 million a year through the naming rights agreement with MetLife. [5] Typical termination events are the sponsor`s failure to pay its sponsorship fees, the bankruptcy of a party or the non-compliance with an essential clause of the contract. In the Kieler Center St. Louis Blues name contract, sponsor Savvis had the right to terminate the contract if the club did not host its home games in the stadium. Given the increase in television rights revenues for EPL clubs (and a comparison with the NFL in the U.S.), these clubs may be less tempted to agree on title sponsorship agreements that have the potential to significantly influence the club and stadium personalities. A contract for stadium naming rights of 20 million pounds a year may not be as attractive to these clubs as it used to be, particularly because of the potential long-term problems a club may have in getting rid of a stadium name in the event of an unpopular or damaging event in which the sponsor is involved. While the highest prices were traditionally paid for stadium fees, many companies and individuals found that the sale of their naming rights could be an important consideration in financing their business.

In recent years, many new categories have opened up, such as the sale of the rights to name a new species of monkey for $650,000. [12] The MLB lacks 10 of the places, many of these older places. The most expensive deal is the $20 million paid each year for Citi Field in Queens. In 2017, it was reported that the current maximum naming rights agreement for the Scotiabank Arena had been agreed, which includes the legendary Toronto Maple Leafs. It was reported that the agreement with Scotiabank was worth $800 million over a 20-year period. That is where the treaties play a role. Smallwood says that most naming rights agreements have clauses to protect against the loss of events, whether it`s a work stoppage in sport or an act of God, such as a hurricane or an earthquake. “Over the years, lawyers and the teams and brands that buy the rights have hardened the language,” says Smallwood.

Since then, we have seen an increase in access to naming rights in professional places. In the NFL, four sites now have no contracts with the richest deals apart from SoFi and Allegiant, which come for ATT Stadium near Dallas, for about $20 million a year and MetLife Stadium in New Jersey only shy of that figure. However, the [name change” and [renaming] of a stadium are a complex and costly process and, therefore, naming rights agreements are generally long-term contracts for which the club or stadium owner will likely benefit from a significant and reliable source of revenue.