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Sports Naming Rights: Another Business Sector Needs To Step In

The biggest naming rights story recently might have been the Giants and Jets halting its discussions with Allianz after many were disturbed with the insurance company’s connection to Nazi Germany.

But the biggest naming rights story will soon be the drying up of corporate dollars for putting names on stadiums if another sector of business doesn’t take over.

When stadium naming rights started taking hold in the sports stadium building boom of the 90s, the airlines swooped in. Delta bought the rights to the arena in Utah in 1991, America West took Phoenix in 1992, United bought the Chicago Bulls and Chicago Blackhawks venue in 1994.

Continental took the space in the Meadowlands in 1996, the Air Canada Centre came on board in 1999 and American Airlines put its name on arenas in Miami (1999) and Dallas (2001).

Then came the banks: Comerica Bank (Tigers, 2000), PNC Bank (Pirates, 2001), Citizens Bank (Phillies, 2003), M&T Bank (Ravens, 2003) and Bank of America (Panthers, 2004).

Then the new New York stadiums wanted big numbers. They went back to the banks again. The Mets signed Citibank to a huge naming rights deal, the Nets went to Barclay’s for their new arena that is being built in Brooklyn and the Yankees are reportedly readying to announce a deal with Bank of America.

But if the banks are no longer going to participate—and given the market we in, there’s not much left in that well—we’re running out of industries.

Target made a tentative agreement to sponsor the Twins new ballpark yesterday. The team said they only talked seriously to Target. The statement was meant to read as a statement of loyalty. The way I read it is that it’s likely no one was in the same financial ballpark. And I don’t expect retailers to get into the game after to this.

The natural space that would keep the naming rights values up would be the technology sector. Microsoft and Yahoo spend 20 percent of their annual revenue on sales and marketing, while Google spends about half that total.

The scary thing is that I can’t imagine any company from the tech sector spending money to put their static logos on a stadium. Even if they wired the stadium and put computers in select places, would it be enough of a sampling atmosphere to drive any revenues? I have to think there's something better to do with that money.

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I don’t have a crystal ball with me, but I’ll predict that over the next year, expect some companies to back out of their naming rights deals and for these deals to decrease in value in the short term.

Meanwhile, let’s keep a watch on the jersey sponsorships in Europe. Manchester United is in the midst of a $100 million deal with, you guessed it, AIG.

    • Barclays Says It Is in Talks to Buy Part of Lehman
    • US Mulls AIG Bailout as Options Grow Dim

Questions? Comments? SportsBiz@cnbc.com

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