Barclays Bank couldn’t have picked a worse time to be a party pooper: the grand opening of Barclays Center — home of the Brooklyn Nets — is around the corner, Barbra Streisand and Jay-Z are set to croon on stage, and fans have forgotten about Kris Humphries’s dead-ball marriage to reality-tard Kim Kardashian.
But less than three months before our big day, the legendary British financial institution is being investigated by Parliament for allegedly rigging inter-bank lending rates for profit, making the bank that’s a household name suddenly not as bankable for the Nets, or for the countless workers and retirees whose pension funds may be at stake.
The penalties are already underway. Barclays has been slapped with a half-billion-dollar fine and its chief executive has bolted, raising questions about the elusive nature of corporate naming rights.
Corporations pay handsomely for the privilege of plastering their monickers on sports facilities — an attractive prospect meant to generate visibility, and promote products and services while play is in progress. But the trend of buying naming rights has ramifications beyond just hog-tying fans to a facility with a boring name.
Barclays, born on the humble streets of 17th century London, is shelling out $400-million to have the arena named after it for the next 20 years, but if it’s found guilty of breaching public trust, fans trying to stay afloat in rough economic seas might be hard-pressed to patronize a sports venue named after a greedy and unrepentant one-percenter.
Corporate naming rights can pose problems even without a scandal.
The corporate marriage between the Baltimore Ravens football team and PSINet, one of the first Internet service providers, was a short-lived one. In 1999, PSINet made a $105-million, 20-year deal with the Ravens to name its Maryland stadium the PSINet Stadium. The company — also the new owner of the team’s website and the prime sponsor of its events — inked the contract when the company’s stock was $51 a share. Just two years later its stock plunged to an embarrassing 18 cents, it was dethroned by NASDAQ, and it filed for bankruptcy. The break-up forced the Ravens to fund a new marketing strategy, a new interior decor, and an expensive overhaul of its promotional materials — from souvenir cups to the uniforms of its cheerleaders.
Greed is dangerous for squeaky-clean companies, too.
Home improvement giant Lowe’s likely wished it hadn’t “built something together” with Charlotte Motor Speedway in North Carolina. In 1999 flying debris from an Indy wreck killed three fans, toppled a pedestrian bridge, and injured more than 100 people — just 16 months after Lowe’s paid $35 million for the naming rights.
Many name contracts, like the Lowe’s one, can span several years — another headache, according to the 2001 University of Nebraska at Omaha study, “Valuing Naming Rights.”
“That’s a long time to deal with public relations damage if the name is continually associated with pain and suffering,” state the study’s authors.
Too much publicity is ultimately bad business as we grow immune to a flood of advertisements in schools, medical offices, movie theaters, gas stations, elevators, and cyberspace, making it difficult for one advertiser to rise above the others.
Hanno Rauterberg, a writer for the German newspaper Die Zeit, summed it up best when he called advertising a new and inescapable form of dictatorship. One, too, where the biggest “despots” are also the most coveted.
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