In case you didn’t see the announcement, the football stadium that the Miami Dolphins play in is now called Joe Robbie Stadium, Pro Player Park, Pro Player Stadium, Dolphins Stadium, Land Shark Stadium, Dolphin Stadium, Sun Life Stadium! (Miami Herald, 1/18) The previous naming rights deal with Land Shark Lager was a short-term deal (less than a year in total) and expired a couple of weeks ago, which almost left the facility without a top-level deal in place before this year’s Pro Bowl and Super Bowl.
The timing of the deal ends up being unfortunate for Land Shark Lager, since they just miss out on being tied to the biggest U.S. sporting event of the year (although I’m sure they had plenty of opportunity to renew the deal, but decided it wasn’t worth the cost). On the positive side, Sun Life has definitely increased their marketing spend over the past few months, and now topping it all off with “hosting” the Super Bowl is quite an accomplishment. There is also an interesting parallel with their recent television campaign where they want to change Florida’s nickname to the “Sun Life State.” In a way, they’re actually doing that!
The Dolphins should also get some credit for being able to turn around a full, five-year deal in such a small time. However, the contract is only worth $7.5 million for an average of $1.5 million per year, which is well below the revenue generated by most other NFL naming rights contracts. UPDATE: I’ve seen conflicting information on the annual cost of the deal. The Miami Herald article now says the deal is worth $7.5M per year (it’s possible I misread this the first time), while the New York Times is reporting an annual net fee of $4M per year.
I have a few questions on this topic:
- Has the frequent turnover in their stadium name had a permanent impact in the value that the stadium name offers to a potential partner? Along the same lines, can the naming rights partner generate as much brand equity being the 7th name on the building?
- Could they have generated more revenue by going with an even shorter-term deal for the upcoming Pro Bowl/Super Bowl events, and then exploring a longer-term agreement with a different partner?
- Does the fact that the Pro Bowl now has its own title sponsor (McDonald’s) diminish the value associated with the name of the facility where the event is occurring? Did that have an effect on the total dollar value of the contract?
- There seems to be a trade-off between pursuing long-term naming rights deals vs. exploring shorter-term deals. Which method do we think will be the trend moving forward. I would still think long-term deals are better for both parties in terms of potential value generated, but there is a definite loss of flexibility.
What are your thoughts on the situation? Do you like the partnership for the Dolphins and Sun Life? Who got the better end of the deal?