Editor’s Pick: Can stadium naming rights be the next step in sponsorship in India?

September 30, 2020 | By : News Desk
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In recent years, sponsorships have become synonymous with the teams and arenas they represent. Fans now immediately connect with Mercedes-Benz Stadium, Minute Maid Park, and Staples Center. Brands are trying to blend themselves into the sports industry in ways like never before.

Giving the naming rights of a stadium to brand is a way to mark territory, which can include a statement saying “we’re headquartered here and we’re not leaving”.

It is not a secret that the sponsorships that provide stadium naming rights come with a large price tag. Barclays Center, home of the Brooklyn Nets, costs a hefty $20 million/year. MetLife pays $19mn/year to have their name placed on the top of the stadium of the New York Giants and New York Jets.

Emotional factors, backed up by analytics and qualitative elements, such as credibility and prestige, often drive a brand’s decision to pay millions to get the naming rights of a sports venue. As long as new sports venues are being built, there will be eye-popping deals to name those structures. The Return on Investment on naming rights is calculated based on the number of impressions it registers.

Selling of stadium naming rights work as an important revenue stream for the clubs/franchises in the west, and for brands, these rights work as important marketing gimmicks that they use in their promotional communications.

This practice is widespread in the west- from London’s Emirates Stadium of Arsenal FC to Los Angeles’s Staples Centre and so on. The practice of branding a sports arena dates back to 1912 when the former owner of the American baseball team Boston Red Sox named its stadium Fenway Park after the Fenway Realty Company that was also owned by him.

With so much revenue available from selling these rights, why is it yet not a concept that is followed in India?

There are two main reasons for this:

First, the ownership; most of the sporting venues in India are not owned by private bodies like they are in the West. They are either built on government land or are owned by the government. As a result, they are mostly named after politicians.

For instance, MCA owned stadium in Mumbai was named after SK Wankhede who was a politician. Apart from the government, sports associations also own some of the stadiums, but the names are majorly kept after the place where the stadium is present or after some politician or renowned person.

The Kalinga Stadium is a multi-sport International stadium in Bhubaneswar, Odisha, owned by the government of Odisha. It has been named based on the history of the place where it has been constructed. Shree Shiv Chhatrapati Sports Complex Stadium is also owned by the government, but it has been named after great Maratha leader Shri Chhatrapati Shivaji Maharaj. There are many examples like these in India.

Secondly, selling the naming rights of stadiums is difficult here since the venues aren’t used frequently throughout the year. We don’t have any sporting leagues that run for the majority of the time over the year. Our longest league is the Indian Super League, running for around four months. Also, the franchises playing in the league do not own the stadium. The leagues in the west run for a duration of about 6 to 10 months in a year, so sponsoring a venue that will be used for the majority of the year does make sense there.

In 2011, for the first time in India, Sahara India bought the naming rights for the stadium, which is now known as Maharashtra Cricket Association Stadium. As per the then deal, the stadium was called as Subrata Roy Sahara Stadium. However, the deal ended before time, as Sahara failed to pay an amount of ₹98 crores to the MCA for the rights.

For the stadiums owned by BCCI, the board can sell the naming rights, and the income generated from that can be used for further development of the sport in the country.

Though cricket is not played all over the year, BCCI can plan a way out to name the stadiums owned by them for a short time duration, maybe during the tournaments like IPL. This will be a new concept, as generally the stadium naming rights are sold for a longer duration, but here since the league runs only for two months, this is how the BCCI can try to initiate this concept in the country for cricket.

Other than cricket, multisport stadiums owned by the government, which also hold international and domestic tournaments like the Kalinga Stadium, Balewadi Stadium, and so on, can sell the rights for the same as this will generate additional income for the government that can be used to develop sports infrastructure in the country. These stadiums are used regularly for domestic as well as international tournaments, so the rights for these can be sold more easily as compared to the stadiums where only a single sport is played.

The grounds are not used throughout the year. If we can create a process where the naming is happening, that naming rights of the stadium are also marketed by the brand for their promotional events. The idea is not just to name a stadium after a brand but also how the brand can use the rights to market it well.

 

By Aashish Jaju

 

 

 



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