What’s in a name? A few hundred million dollars.
Excluding the value of Lehman Brothers’ Seventh Avenue headquarters, Barclays is only shelling out $250 million for the other Lehman assets it snapped up last week when it bought the bankrupt investment bank.
That’s a bargain next to the $400 million the British bank agreed to pay in early 2007 for the right for 20 years to have the soon-to-open home of the Brooklyn Nets named the “Barclays Center” and create brand recognition.
When Barclays signed the deal, it raised the question why a foreign bank like Barclays, widely unknown to U.S. consumers, would spend a small fortune on naming rights, especially since it doesn’t operate retail branches.
But in the past few years, financial firms have been all over arena and stadium rights.
In November 2006, Citigroup agreed to pay $400 million for the naming right to the New York Mets’ stadium, where they start playing next year. And in January 2007, Prudential Financial paid more than $100 million for the right to name the new home of the National Hockey League’s New Jersey Devils, which they moved into last year. The New York Post also recently reported that Bank of America, another bank that profited from the current crisis when it snagged Merrill Lynch last week.
But one marketing expert thinks right now, the public may take a dim view of all these stadium and arena sponsorships.
“People want to see companies be prudent,” said Bob Passikoff, president of Brand Keys. Not spend millions of dollars to slap their names on an arena while so many financial institutions are asking for a bailout.