Why Don't Bengals Sell Stadium Name Rights?

Why don't NFL-poor Bengals sell stadium name?

Brent Schrotenboer , USA TODAY Sports

Link: https://www.usatoday.com/story/sports/nfl/bengals/2017/04/18/bengals-stadium-naming-rights-nfl-revenue/100611140/

The Cincinnati Bengals rank near the bottom of the NFL in revenue and have been outspoken about the structural problems of doing business in the NFL, including the widening disparity between the league’s richest and poorest teams.

Yet the Bengals could have more money if they wanted. They play in one of the few stadiums in the league that has never been named after a corporation in exchange for millions of dollars annually.

Paul Brown Stadium is named after the family that still owns the team instead of some insurance company or bank.

And that’s not likely to change any time soon — even if it adds to the tension in a simmering NFL debate: How much more should rich teams help poor teams in an effort to help them avoid the temptation of relocating to somewhere bigger and better?

 “The club has looked at naming rights in the past and will likely do so again in the future,” Bengals vice president Troy Blackburn told USA TODAY Sports. “That said, the naming rights market doesn’t normally yield much more than a couple million dollars per year in the smaller markets. It isn’t enough to make a true difference.”

Blackburn, the son-in-law of team owner Mike Brown, said the Bengals are not looking or wanting to leave Cincinnati when the team’s stadium lease expires in 2026. Rather, he’s hoping the NFL can make structural cost-sharing or other changes that help small-market teams from going the way of the St. Louis Rams, San Diego Chargers and Oakland Raiders – all of whom recently decided to relocate to bigger markets or better stadiums.

The stadium naming rights issue in Cincinnati is one example of how the league revenue disparity is viewed differently by different teams – and how it might cause a team to look for greener pastures elsewhere as player salary expenses continue to march upward.

At the high end, a naming rights deal for a stadium can fetch around $17 million annually, as it did with the Dallas Cowboys’ AT&T Stadium. Dallas also happens to be one of the nation’s five biggest media markets and the league’s leader in revenue at around $700 million annually, according to Forbes.

At the low end, such deals might be worth a couple of million annually.  In San Diego, local telecommunications technology company Qualcomm paid the city $18 million total — not annually — to rename the Chargers’ stadium after itself for 20 years in a deal that ends this year. San Diego ranks 28th as a media market and ranked in the bottom half of league revenues at around $350 million before the Chargers decided to leave for Los Angeles, where naming rights could outdo Dallas in the nation’s No. 2 market.

Other NFL clubs and stadiums that haven’t sold NFL stadium naming rights generally can afford not to, don’t want to sell out the stadium’s traditional name or aren’t getting enough in return to make the deal worthwhile. The small list includes Lambeau Field in Green Bay, Soldier Field in Chicago, Arrowhead Stadium in Kansas City and Paul Brown Stadium in Cincinnati.

A case could be made that having Paul Brown’s name on the building “has value that might be greater to the team than the dollars from a naming rights deal,” said Josh Boyd, an associate professor at Purdue University who’s studied sponsorships and stadium naming rights deals. “And given the team’s lack of postseason success, taking something of a stand about tradition and connection to the city might make more sense in the absence of trophies, suggesting that the team cares about its relationship with Cincinnati and not just maximizing revenues.”

Depending on the viewpoint in the NFL, the Bengals either should be more aggressive pursuing such revenues, or they are too handicapped by their market size to make such a stadium name deal worthwhile.

Cowboys owner Jerry Jones previously has suggested that smaller-revenue teams can do more to make more money.

On the other hand, big-market stadiums command more money for luxury boxes and naming rights because they are in bigger markets with more people and more corporations willing to pay for them.

The poorer teams are poorer, in part, because media markets such as Cincinnati only have a fraction of the amount of eyeballs in New York, Philadelphia and Dallas. These big markets help drive the value of the huge TV contracts that make the NFL rich — money that is shared equally with all 32 teams, along with a portion of ticket sales.

But teams generally do not have to share with other clubs what they generate locally through their stadiums, such as with luxury boxes, advertising and stadium naming rights.

This has led to a widening disparity in revenue among teams, increasing the temptation of the underprivileged to move to other cities where they can better keep up with rising player costs. Player salary expenses and the salary cap are determined by how much revenue the league makes collectively, including unshared local revenues. As revenues rise for those big-market teams, so do player expenses for all teams, including the ones that don’t make nearly as much revenue on stadium rights and luxury boxes. The salary cap is $167 million per team this year, up from $120 million in 2011.

“A couple million dollars per year in a naming rights deal won’t bridge much of a gap,” Blackburn said. “The simple truth is that there is a structural challenge in today’s NFL and it dwarfs the small individual issues like naming rights.  Teams are moving for a reason … that’s the reality.”

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