| Stadia 'R' Us |
6 January 2003
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The Curse of Stadium Sponsorship
Advertising can be a great benefit to a company. Building a better mousetrap has no value if the customers don't know it exists. But when a corporation spends perfectly good money to put its name on a stadium or arena, hoping that constant name repetition will benefit its bottom line, it is asking for trouble. The proof? There are currently 61 such sponsors and in the last 19 months, 8 have gone bust.
A 13% kill rate might not be so bad, since WorldCom, United Airlines, Adelphia Communications and US Airways might be in tough industries and an analyst might let it go at that. However, according to Chris Isidore writing for CNN/Money, only 6 such sponsors made a profit last year. When more go broke than make money, there is something seriously wrong.
While the scientific evidence is incomplete, intuitively one can surmise that it is ego that has created this situation. Corporate hubris runs amok, and for firms that have put their name on a ball field, it seems to run amokier.
Here's a lesson for the Sales & Marketing departments. Customers will buy your product if your advertising convinces them that it will solve a problem they have. Name recognition alone cannot do that. Association with a successful sports franchise will not sell airline tickets, cell phones, nor energy. Focus on the business you are in. Make your customers happy. Turn a profit for your shareholders. And maybe we can go back to naming stadia after those who deserve it -- Soldier Field, RFK, or simply after the team. Funny how the New York Yankees (the most successful franchise of any in North American sports based on championships won) play at Yankee Stadium -- not Steinbrenner Park.