I woke up this morning to see that Washington Mutual, aka WaMu took a dive and entered into receivership. While this was foreseen as a real possibility for quite some time, one thought occurred to me- with all of the different banks being merged and acquired by the giant WaMu and Bank of America over the past few years, why did we suspect any different?
Moreover, the giant banks have been spending ridiculous amounts of money in advertising on TV, and on naming rights for stadiums and arenas. WaMu got the first naming rights deal for part of the famed Madision Square Gardens in May of 2007; barely a year later, they are shuttering the doors. Are naming rights deals, along with Top Executive Salaries another excess that this bailout deal should address?
There are several great articles around about naming rights deals, including:
- With the American economic crisis, are some arena naming rights deals at risk?
- Sports Naming Rights- Another Business Sector Will Have To Step In from CNBC;
- Getting The ‘Skinny’ on Naming Rights; New York Times
In the New York Times article above, the Times reports that Citibank paid $400 million dollars to secure a naming rights deal to the Mets new stadium, Citi Park, for a term of twenty years.
While I have no doubt that selling naming rights is a way to defray the cost of building all these new stadiums, and I am sure there is value in having your brand permanently associated with a large building, can’t we just stop for a minute and think that financial institutions should be doing something better with their money than buying naming rights to huge public facilities?
Right here in Philadelphia, the Wachovia Center is a huge complex. It used to be the First Union Center, until Wachovia bought First Union back in 2001. The New York Times reported on September 18 that Morgan Stanley was pressing for a merger with Wachovia and there was hope that they could split the bank into a “good bank” and “bad bank” so to speak, to keep everything afloat. Although this deal went “off the table” on September 21st, it’s clear Wachovia is also struggling. Maybe spending all that money in naming rights deals shouldn’t have been a priority?
Of course, in my backyard in Wilmington, DE, the most famous merger is the buy out of MBNA by Bank Of America. When the executives from MBNA were in a helicopter crash when they went to NYC to execute the deal, it was seen as an omen of bad things to come among the locals. Bank of America also has huge naming rights deals and sponsorships of major league sports of all flavors, including one pending with the Yankees for the new stadium in New York. For a complete list of the Sponsorships and naming rights Bank of America owns, just go to this list on Wikipedia– it’s too long to include here.
I know banks have and will continue to be a source of corporate support for arts, culture and sports throughout the Country. This is wonderful and I appreciate everything they have done for our communities, large and small. But this can also be an easy sign of excess- you shouldn’t be out buying huge naming rights deals when your institution is on shaky financial ground. That’s ego and and excess that puts CEO salaries to shame.
Where does this all go? Many new stadiums and arenas may not get built for a long time. This means less access for the disabled as older venues aren’t upgraded; less jobs for construction companies and architects; less jobs for the people who would work in these aircraft carrier sized spaces- that probably will have less business since conventions may become less lavish as well.
As the bailout pushes money into the economy, can we ask that some of these facilities be named after the US Taxpayer? Maybe IRS Form 1040 field?
For those of you who might be wondering why I care about Stadium Naming Rights:
In my pre-internet afficionado life, I did some work with another attorney, Turner Madden, who was chief counsel for the International Association of Assembly Managers. This meant we represented the Association, who in turn, represented the interests of those running all the major stadiums, arenas, convention centers and other large gathering places in the Country. We did some lobbying in DC and we wrote a book on Public Assembly Facility Law as well (I’m second author).
Working with Turner, (a super guy in many ways), I learned an amazing amount about how large facilities operate, and one of the issues that was always big was regarding Naming Rights. It has been popular since the mid-1990’s as a way to generate revenue to help finance the building and renovations of major public assembly facilities across the Nation.