Naming rights generated a combined $187 million for the 122 franchises in Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League over the past year. That's only 1% of their revenue, but it's a crucial stream of financing for construction.
Banking giant Barclays, desperate to cut costs, recently managed to halve--from $400 million to $200 million--the amount it will pay the New Jersey Nets for the naming rights to the team's new basketball arena in Brooklyn, due to open in 2011.
The Dallas Cowboys' new $1.2 billion football stadium was supposed to pull in $20 million a year from naming rights for 30 years. Nope. Companies now think owner Jerry Jones' asking price is too high. Jones has remained firm. A new $1.4 billion stadium that pro football's Jets and Giants will share was supposed to garner $25 million to $35 million a year in naming rights. Buyers have been scarce, and the owners are standing firm.
So where does that leave the Cubs, if they are searching for new revenue sources? I have gone on record here many times: I don't care if they sell naming rights to Wrigley Field. It will still be the same (well, hopefully renovated) ballpark at the same location, with the same iconic ivy-covered brick walls and scoreboard that identify it to all baseball fans. Who'd call it by its corporate name except the broadcasters and reporters who are required to? To me, it doesn't matter. Bring in the money, if available, to pay for renovations and/or enlarged player payrolls.
In any case, it seems that current financial conditions may not allow large companies who in the past might have bought naming rights for the kind of money described in the Forbes article -- or even the $68 million that U.S. Cellular paid for the park on the South Side for a 23-year deal in 2003 -- any time in the near future. So what can the Cubs do to try to get an extra revenue stream of this type?
One thing I think is likely is that they will sell the naming rights to the Triangle Building. None of you have any philosophical objection to that, right? It wouldn't bring in as much money as naming rights to the ballpark, but any such naming rights deal would be extremely visible, given the building's location on Clark Street, and it would also be there 365 days a year, not just when people walk into the entrance at Clark & Addison -- I'm assuming that the Cubs would put retail and other things in the new building that would be open on non-baseball days.
There is one more thing not mentioned, but implied, in the Forbes article that ought to be a wake-up call for not only baseball, but all sports leagues. Every professional sports league in North America is now operating with billions of dollars acquired, primarily, from huge national TV contracts signed in the mid-2000's when the economy was going well.
What will happen when those contracts come up for renewal? Will TV networks, many bleeding red ink, pony up those same billions?