Sports Valuation > Naming Rights
The practice of selling naming rights to a sporting or entertainment venue has now become commonplace but is still of utmost importance to teams, fans, and the companies paying for the right to display its name on the venue. Valuing this type of unique exposure is difficult as there are many variables to consider from both the viewpoint of the venue owner and the sponsor. Finding a company that is able to provide an independent valuation is integral to the process and AbsoluteBrand has the capability to value each opportunity individually and present the true market value and comply with Generally Accepted Accounting Principles.
In evaluating how much the naming rights are worth, AbsoluteBrand
quantifies the various marketing reasons into a hard number by
identifying demand drivers and what role the brand contributes to each
to determine how they affect the naming right opportunity.
Such drivers of demand may include:
- Team Success
- Audience Demographics
- Geographic Location
- Possible Political Issues
- Perennial Favorites
- Long-term Investment v. Short-term Advertising
- Potential Negative Affects
- Popularity of a Sport
- Agreement Contents
How much the brand contributes will in many ways determine how much a sponsor is willing to put on the table for the naming rights. Some sponsors see naming rights of facilities as highly effective target marketing - increasing visibility and recognition of the brand. The sponsor gets their name on all printed materials of the facility being sponsored (be it stadium, soccer complex or mall). As a means of direct marketing, sponsorship can be highly effective however the benefits should be quantified to determine the long-run return on the brand investment.