Stadium Naming Right - A Revenue Potential Yet to Be Explored in Nigeria

 

Most stadiums in Nigeria doesn't make enough revenue to maintain the venues. The major reason is that the owners, which are mostly government, doesn't explore all the commercial avenues available. For instance Stadium Naming Right Sponsorship. 

The practice in Nigeria is to name stadiums in honour of our past leaders and heroes, which has no commercial value: Nnamdi Azkiwe stadium, Ahmed Bello stadium, Obafemi Awolowo stadium, MKO Abiola stadium, Teslim Balogun Stadium, Stephen Keshi Stadium... as good as they may sound, naming stadium after our past heroes doesn't bring any return on investment to the owners. 

Over the years, tax payers in Nigeria have seen stadium as white elephant project that requires  government to keep funding the maintenance of the venues. And with huge capital outlay required for such maintenance, which the government cannot provide adequately, has led to dilapidation of several stadiums across the country. 

To generate revenue, many of these venues sell the right to name the stadium after a corporate sponsor. ... That's why it makes sense to pay attention to stadiums with financial troubles. 

Selling naming rights offers stadium owners opportunities to raise capital to maintain the stadium, expand existing venues or simply to generate more revenue. 

Reasons for selling the naming rights include defraying the cost of building, remodeling, or operating the facility.

Example of Stadiums that Sold Naming Rights to Corporate Brands

Stadium Name   Sponsor    Avg. $/Year

Air Canada Centre, Air Canada, $1.5million

Alltel Stadium ,  Alltel Corps, $620,000

American Airlines Arena, American Airlines, $2.1 million

American Airlines Center, American Airlines, $6.5 million

Emirates Stadium, Emirates Airline, €10.2 million

Why are stadiums in the USA named after brands?

The various companies pay to have their names attached to stadiums -- or university buildings, hospitals, and the like. This is seen as a form of advertising for the companies. The companies may not own the stadiums, but they're usually only involved in having their names used in return for a large investment in cash or possibly services.

The actual owners of the stadiums thus obtain cash (or services) for the paltry effort of affixing a name. This cash can be used for all sorts of things the owners believe desirable without their having to do things like raise ticket prices, ask for additional tax breaks, take on financial bonds, etc. Or, it can just be used to pad their pockets.

Reasons for a company (Corporate Brands) to pay to afix their name on a stadium include to enhancing brand awareness and brand image; creating an emotional connection with target audiences, such as sports fans; and free advertising. 

So, for brands, naming stadia can be an effective way to raise brand awareness, reputation and loyalty.