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How the Nationals Erred By Missing the Naming Rights Window PDF Print E-mail
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Written by Maury Brown   
Friday, 18 September 2009 13:55
Nationals Park
The Nationals could have had a corporate
naming rights deal for their ballpark when
it opened, but missed their window.

In 2006, the Washington Nationals were on the verge of opening their new ballpark, with the recession still far enough out on the horizon that it was only spoke of by a handful of economists. The Mets had just inked the most lucrative naming rights deal in US sports history, a staggering $400 million agreement that would see the Mets getting $20 million annually over 20 years to name their homage to Ebbets Field to Citigroup where the ballpark would be christened “CitiField. “

Nationals owner Ted Lerner, feeling confident that due to their location in the nation’s capital, and its market size, wasn’t seeing a naming rights agreement that would be above the Mets’ record-breaking deal, but he wanted something close.

Sources close to Lerner at the time reported that he was hoping for an agreement that would garner somewhere between $10 million to $15 million, but would have been happy with $8 million to $10 million, figures that would have placed the Nationals ballpark naming rights second behind the Mets.

Whether it was a case of overestimating the market by Lerner, the Wasserman Media Group, who was hired to broker a naming rights deal, was unable to find any takers that would reach the figures Lerner and the Nationals had set.

By October of 2007, the Nationals had resigned themselves to the fact that their new $611 million ballpark would not be opening with a corporate name on its exterior.

“There’s no panic, but that’s something we certainly may wait on until ’09,” Lerner said to Eric Fisher of the SportsBusiness Journal at the time. “These are very complicated deals that take a lot of time to pull together. On a practical level, we’re getting awfully late in the game where we wouldn’t have enough time to order and install the signage in time for Opening Day. We’ll get there. The important thing is to have the right deal instead of the quick deal.”

Lerner, working with Rob Prazmark, WMG’s executive vice president, wanted a highly integrated arrangement, similar to what Philips Electronics had done with the naming of the arena for the Atlanta Hawks and Thrashers. That deal was negotiated, in part, with now Nationals president Stan Kasten at the helm of the two Atlanta franchises as president. Reports were that there were more than a few interested parties, but Lerner wanted an exceptional deal.

Shooting high, and “playing it patient” seems to have backfired.

By September of 2008, the bottom had fully dropped out of the economy. Shooting for a more reasonable offer seems, in hindsight, to have been a better decision.

Naming rights deals could best be described as “exceptionally difficult” given the current state of the economy, and public scrutiny, but not impossible. As an example, the Twins were able to announce their deal with Target for the naming rights to their new stadium set to open next season in September of last year, just as the economy was beginning to feel the full weight of the recession. It’s possible that the Target deal could be worth as much as $100 million over the 25 year agreement.

What is obvious is the parameters of the deal that Ted Lerner was envisioning is most likely several years out. Certainly next season seems out of the question with the chilly economy just now showing signs of thawing, and 2011 or 2012 no guarantee that even with a recovered economy. Also, the value of a naming rights deal for what is now Nationals Park will continue to decrease based upon the corollary effect which sees naming rights deals having less value the longer a name is associated with a stadium (see Kurt Hunzeker’s Busch Corollary: Valuating Second-Hand Naming Rights).  Lerner, like most, didn’t see the recession looming on the horizon when discussions of naming rights for the Nationals’ ballpark was first discussed. But, given that reaching the structure that Lerner was looking for seems to have been at least part of the sticking point, Lerner appears to have erred by not jumping on a deal back in 2006.

Putting it another way, if a 25 year deal that saw, say, $7 million annually had been reached, that would have totaled $175 million. Not as much as Lerner was shooting for, but something. By now, the Nationals would have pulled in $14 million, or $1 million less than the Nats are on the hook for with the Stephen Strasburg contract. File missing a naming rights deal for the Nationals under “shoulda”.


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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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