How Stadium Naming Rights Became Mainstream
And why this Caribbean venue is joining the party
Whatsup Squad,
It may not matter to the average fan whether LeBron James plays at the Staples Center or the Crypto Arena, but the business of stadium naming rights is a huge revenue driver in modern sports.
What is a Naming Rights Agreement?
In this context, a naming rights agreement is a contract between a company and an owner of a stadium.
This enhances the company’s visibility because its brand is now associated with the stadium or venue.
In return, the venue owner or operator is paid a royalty that helps to support its activities or boost its profitability.
Where It All Started
Corporations purchasing stadium naming rights can be traced back to Chicago.
In 1926, William Wrigley, the chewing gum mogul and owner of the Chicago Cubs, named his team's stadium "Wrigley Field".
That said, this type of agreement did not become a widespread trend until much later.
Up until the 1990s, the share of home venues that were named either generically (like Dodger Stadium) or in tribute to an individual (like Madison Square Garden) was over 96%.
Later that decade, the proportion of unsponsored venues dipped down to 68%, which was the beginning of a drastic slide that’s continued since.
Today, stadium naming rights are the status quo across the major American sports leagues.
Naming Rights in America
While fans may not always get on board with the idea of renaming their favorite team’s home arena, they are more likely to be accepting of companies with strong local ties to the area.
And even if the company doesn’t have a local connection, the amount of money offered is often too much for venue owners to turn down.
Singapore-based Crypto[dot]com owns the most expensive naming rights deal, where they are paying $700 million for the exclusive naming rights to the home of the NBA's Lakers, WNBA's Sparks and NHL's Kings.
Naming Rights In Europe
Named stadiums are not limited to the United States, but they are far less common in other countries.
In Europe, where soccer is by far the most popular sport, jersey sponsorships are the premier avenue for companies to attach their likeness with sports teams.
And just as jersey sponsorship have become mainstream in American sports over the last decade, named stadiums are on the rise in Europe.
In Spain, Spotify agreed to pay $310 million to FC Barcelona for naming rights to their home stadium.
And in Germany, Insurance company Allianz signed a $140 million agreement with FC Bayern for exclusive naming rights to their home stadium.
Naming Rights in the Caribbean
The Caribbean is another region to keep an eye on.
In Barbados, the Government announced plans to put the Kensington Oval naming rights up for sale.
Earlier this year, the facility underwent a comprehensive renovation to transform the Mecca of Caribbean cricket into a premier destination for world-class events.
In general, the more events a venue hosts and the more visibility it has (via attendance, passing traffic, and broadcast), the more valuable a naming rights deal.
And not only does the stadium host marquee cricket matches like the 2024 ICC Men's T20 World Cup Final, which peaked at 53 million concurrent viewers, but it also regularly hosts concerts and festivals.
Given the type of organizations that have historically been involved in stadium naming rights deals in America, I’d expect a bank, insurance, or communications company to jump at this opportunity.
Final Thoughts
The monetization of stadium naming rights is an incredible opportunity for venue owners and operators to diversify revenue streams and access additional sources of funding.
In Barbados, the additional revenue from a naming rights partner would allow the Government to maintain the facility to the highest standards as well as develop the real estate in the surrounding area.
What company do you think should acquire the naming rights for the Kensington Oval?
Let me know in the poll or in the comments!
Until next time ✌🏾
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