- A complex decision shaped by culture and timing
- US leads, with 60% of top deals
- Long-term, costly, high-reward commitment
Are naming rights a good investment?
Connecting with a city, fanbase or sport can create long-lasting results for companies.
Naming rights promise brand legacy in a territory for 10-20 years.
For properties, they secure an important additional revenue for many years.
For sponsors, it locks them into a big and long-term commitment. It’s difficult to predict if it will still be a good decision in the future.
Before signing, brands should ask:
- What other opportunities will be missed due to this deal?
- What will the city or sport look like in ten years?
- Will the new name be truly adopted by fans and media?
It’s a complex decision that doesn’t work everywhere and is influenced by the market, tradition and potential alternatives.
Naming rights have traditionally been more natural in the United States, as many venues were inaugurated with commercial names.
However, the sale of naming rights of iconic stadiums such as Maracanã or Anfield would never be approved by fans.
Actually, 60% of the top-10 naming rights deals are in the United States, with Crypto.com Arena being the highest-paid, at USD 35 million.
As the sports and entertainment industry grows, more events and properties are open to explore all income opportunities, especially in America.
Recently, LA28 announced they would be the first Olympic and Paralympic venues to sell naming rights. A good opportunity for brands that already have naming rights with LA28 venues.
Unlike other Games such as Tokyo 2020 and Paris 2024, LA28 will receive zero funding from government beyond the security budget. Therefore, selling naming rights is necessary.
Likewise, the last FIFA Club World Cup, held in the United States, retained the existing commercial naming rights of the venues. Something uncommon in FIFA major events.
Several factors determine if naming rights are a good investment, but the United States has proved to offer the most favourable environment
Naming rights can be a big win, but only if the timing and culture are right. Otherwise, they can end up being more risk than reward.
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