Public facilities increasingly get corporate names

Largely due to expansion by the major leagues over the past 30 years, state-of-the-art sports stadiums and arenas have been spouting up like weeds in springtime.

Many are built with public funds, but in most cases the facilities’ names do not reflect their primary source of financing. Instead of ballparks and arenas once named for famous politicians (Hubert H. Humphrey Metrodome), civil rights pioneers (Roy Wilkins Auditorium), or war heroes (Memorial Stadium), sporting complexes now are christened with the names of corporations that buy the naming rights from the primary occupants, the teams.

Currently, the running national totals of corporate-named sporting facilities include 16 named for banks and financial companies, six named for airlines, six named for phone and communications-based firms, two named for computers, two pet food superstore.

Why? Most teams simply say it’s the way of the stadium-building world.

“It’s just become part of the business model when putting up a new building,” said David Bialek, president of ANC Sports Marketing, in a September 2008 Forbes Magazine special report on naming rights.

Locally, Target acquired the rights in 1990 to name the then-new downtown arena built for the Minnesota Timberwolves for $1.3 million a year. Xcel Energy later agreed to pay the Minnesota Wild $3 million annually to name the new St. Paul hockey arena.

“Xcel Energy’s desire was to be a part of the best [pro hockey] arena and have their name on it,” recalled Carin Anderson, Minnesota Wild senior director of corporate sales, of the naming rights discussion, which began in 1997 when Northern States Power (NSP) was the corporation’s name.

As in other cities around the nation, the taxpaying Twin Cities public didn’t have a say then, nor more recently when TCF Bank agreed to pay the University of Minnesota $35 million over 25 years to name the new Gophers’football stadium scheduled to open next fall. Nor were taxpayers consulted when the Minnesota Twins signed a multimillion-dollar deal with Target to name its new ballpark “Target Field.”

Both stadiums are publicly owned and mostly funded with public money. “When there’s public money involved, what right do [teams] have to sell [naming]
licenses?” asked State Senator John Marty. “Taxpayers pay for it, so why don’t they get to name it?”

What does the community get from the Twins and the U of M selling and naming their new edifices after private companies? Obviously,the baseball team and the university both benefited because their asking price was met. And apparently Target and TCF Bank both benefit because they get an immediate return on investment now that their respective names get free advertisement in news reports and game telecasts.

“The media could call it the Twins Stadium, or the downtown Minneapolis Twins Stadium. But instead they always will call it Target Stadium, Target Center, or Target whatever,” noted the state senator.

Target also will be the name for a plaza being built next to the new ballpark. “It will be a community space,” said Target Corporate Communications Director Lissa Reitz of the plaza. “That will be the most conscious, visible and tangible benefit [for the community].”

Although Hennepin County is paying over two-thirds of the stadium construction cost, the Twins’ $160 million contribution got them “revenue funding streams” that included naming rights fees, explained Minnesota Ballpark Authority Executive Director Dan Kenney. He added that “the team is contributing to both the ballpark and the public infrastructure,” which is more than what the 2006 stadium bill passed by the state legislature called for.

“The Twins didn’t hold an auction and sell its naming rights to the highest bidder,” claimed Twins Sports President Jerry Bell. “We restricted it to Minnesota legacy companies, and Target fits that bill. We felt the Target Field name is an appropriate name for our community.” Bell suggested that “an enhanced plaza [that] will be open to the public every day” is another way the community benefits from the Twins-Target deal, along with a possible partnership in giving away game tickets. But, he added, “[This ticket giveaway] hasn’t been fully developed yet.”

Some naming rights deals elsewhere later backfired. For example, Houston’s baseball stadium was once named Enron Field, and the football stadium in Miami was rechristened after its original corporate name went bankrupt.

What happens if one day Target is no longer in business? Marty responded, “If five years from now Target goes belly up, they are not going to pay any more payments.Then the Twins will [have to] go with somebody else.” Mary Sandok of Xcel Energy Corporate Communications Office said having her company’s name on the St. Paul hockey arena provides the community with energy-saving messages, which are displayed throughout the arena.

“Our sponsorship enables us to showcase what we are doing and how customers can be our partners by doing small things themselves,” she surmised. “We leverage our sponsorships, including naming rights, to build awareness around our key
messages, which focus on energy efficiency, renewable energy and safety.”

Nonetheless, as he looked out of his State Capitol office window, Marty bemoaned the possibility that purchasing naming rights for publicly
owned facilities could one day extend beyond sports.

“Maybe we should [call] this the 3M State Capitol,” he joked. “We could make money on that and help refurbish the capitol.”

To many observers, it looks like publicly funded stadiums and arenas with corporate names are here to stay. “I think 30 or 40 years ago, you
named a stadium in tribute to somebody,” Marty concluded.

“We don’t do that anymore, because everything is up for sale.”

Charles Hallman welcomes reader responses to challman@spokesmanrecorder.com.