RUNNING HEAD: The Name Game 1

The Name Game: High School Stadium Naming Rights and Their Impact on the

Commercialization of High School Athletics

Eric P. Butcher

HPR 642, Fall 2012

November 18, 2012

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Introduction

High school athletic programs, and the athletic directors tasked with overseeing

them, have increasingly found themselves having to do less with more. Athletic budgets

are being cut throughout the United States, forcing those in charge to come up with

creative ways to fund essential expenses, repairs, and needed upgrades to facilities.

School districts are turning more and more to corporate funding to solve their

budget problems. Although not a new phenomenon, with schools employing scoreboard

and baseball wall advertising to fund the construction of these projects for years, districts

are turning to the sale of naming rights for current and new stadium and arena

construction projects.

While this seems like a logical evolution, especially considering the growing

interest in high school athletics (particularly football), is this level of dependence on

corporate funding at the high school level going too far?

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Review of Literature

An increasing number of public school districts throughout the United States are

turning to corporate funding to solve their budget crises, particularly when it comes to

athletics. With widespread documentation that property tax burdens have shifted away

from businesses to individual homeowners over the past two decades, we might ask why

corporations have not been spending more on public schools all along as members of

society, not in return for the opportunity to promote themselves (Molnar, 2002).

The ongoing increase in school naming-rights deals reflects a larger trend in

which schools are becoming subsumed in the corporate branding of virtually every public

space. This trend emerged in the 2001-2002 survey of commercialism in schools by the

Education Policy Studies Laboratorys Commercialism in Education Research Unit at

Arizona State University. The study, conducted annually since 1998, searches media

databases to document reports of commercial activity in public schools, focusing on eight

categories of school-level commercialism: sponsorship of programs and activities,

exclusive agreements, incentive programs, appropriation of space, sponsorship of

education materials, electronic marketing, privatization, and fundraising programs

(Molnar, 2002).

According to McCollum (2005), the Sweetwater Union High School District near

San Diego, California, has signed sponsorship contracts with nearly 300 national and

local businesses. The money has helped launch freshman sport teams at 12 high schools
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and has helped start intramural programs at 12 middle schools. In all, there has been a

248 percent increase in corporate sponsorship of schools since the early 1990s.

The strategy makes business sense, McCollum (2005) added. If parents, students,

and teachers see that a supermarket or shoe company is helping them out, theyre more

likely to patronize that retailer or manufacturer. And such sponsorships dont need to

affect the quality of learning. Besides, we deal with marketing from TV, radio, magazines,

and billboards every day. The messages bounce off most of us like beach balls. Why

shouldnt schools take advantage of this income source if no harm comes of it?

This trend continues on a huge upswing in urban and suburban districts

throughout the country, where extracurricular budget money is continually being cut to

help make ends meet. The Dallas Independent School District, for example, is

considering naming rights as an option to relieve the stress of a $77 million budget cut.

You can choose to sell that stuff or give it away, said Dallas ISD trustee Mike

Morath in a Haag (2011) story for The Dallas Morning News. If we can bring in external

resources to help cover the operating costs of the school district and bring in additional

resources to help kids, why wouldnt now be the time?

According to Haag (2011), the results of public school districts attempts to seek

private funding appear mixed. Humble Independent School District near Houston, Texas,

recently signed a 10-year contract worth $350,000 to rename its football stadium

Parkway Family.com Field. However, Highland Park Independent School District,

nestled in a very affluent part of Dallas, Texas, has had no takers on its offer to rename

Highlander Stadium. (The price: $10 million.) The district is now considering the option

of lowering the price tag and extending the deal to multiple years.
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The Market for High-School Facility Naming Rights

The sale of sport facility names in the United States began in 1973 when Rich

Products Corporation paid $1.5 million for the rights to the home of the Buffalo Bills for

the next 25 years. While companies may have many reasons for purchasing naming rights,

some of the more important reasons include the pursuit of community citizenship and

goodwill, and to increase sales and market share (DeSchriver & Jensen, 2003)

At the local level, companies benefit from naming a facility for several reasons.

People in the area may take a more positive view of a corporation if they believe the firm

played a key role in providing a state-of-the-art facility for the region (DeSchriver &

Jensen, 2003). When applying this theory to the concept of selling naming rights at the

high school level (obviously on a smaller scale), the benefit of community goodwill can

be a big draw especially as high school stadiums continue to grow and evolve. For

example, the Allen Independent School District in Allen, Texas, opened a new 18,000-

seat stadium for the 2012 season, costing taxpayers in the district more than $60 million.

While the district did not sell naming rights to the stadium, the option could be a viable

one for future revenue generation; Allen High School has one of the largest and most

successful athletics programs in the state, which would make naming rights at the

stadium a hot commodity.

In some cases, the benefits to the community (and student athletes) can far

outweigh the benefits received by the company purchasing the naming rights. In 2011,

shoe company New Balance paid $500,000 for naming rights to Gloucester High

Schools historic Newell Stadium, which first opened in 1936 and had deteriorated badly
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in recent years. The money generated will help fund a $3.5 million renovation project at

the stadium. Newell Stadiums poor condition, including wide pits in the track and

warped, swaying stands, has severely limited its use, according to a press release from

the Gloucester Fishermen Athletic Association. The bathroom building was condemned

and the track team has not held a home meet in six years because the track is unsafe for

runners. Although it is next to Gloucester High School, none of the schools physical

education classes use the field. An analysis by the City of Gloucester estimated that 1,000

more children per year will be able to use the field when it is rebuilt (Gloucester

Fishermen Athletic Association, 2011).

Consequently, the market for high school facility naming rights would seemingly

fluctuate depending on the size of the community and school itself which in turn

presents the same problem faced by professional sport teams in smaller markets. Firms

that buy naming rights for a facility in a populated area must pay more because they are

effectively paying for additional advertising that they would not receive from a facility in

a less populated area. These results seem to be consistent with the existing literature on

facility naming rights as many authors have suggested that the prime motivation for

sponsorship is cost-effective advertising (DeSchriver & Jensen, 2003).

The PR dangers of corporate sponsorship

Although the financial benefits of selling naming rights are obvious, there are a

number of potential negative consequences that can arise from the partnership. While

these problems are challenging for any organization, they are magnified tremendously
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when dealing with public school districts and the student athletes they are responsible

for.

First, there is the possibility that the company purchasing the naming rights may

not be able to hold up its end of the bargain. Firms that purchased naming rights for the

stadia of the Baltimore Ravens (PSI Net), the St. Louis Rams (Trans-World Airlines), the

St. Louis Blues (Savvis), and the Carolina Panthers (National Car Rental) went bankrupt

or became defunct (Jensen & Butler, 2007).

While these examples demonstrate this problem on a larger scale, it is still a very

real possibility that has to be considered by school districts when seeking potential buyers

for naming rights. Relying too heavily on private funding could be catastrophic to a

school district if the company providing the funding suddenly ceases to exist.

The image of the company interested in purchasing naming rights must also be

heavily weighed. Some of the companies that professional sport teams do business with

would be off limits to a school district seeking private funding through naming rights.

There could never be a Coors Field or Red Bull Arena on a high school campus, simply

because of the nature of the companies involved. However, there is also the possibility

that the company purchasing the naming rights gets caught up in a public relations

nightmare, which then affects the school district in a negative manner.

Consider the case of the Houston Astros and Enron, albeit on a professional sport

level. Prior to its bankruptcy in 2001, Enron employed more than 21,000 people and was

one of the worlds leading energy providers. It was named Americas Most Innovative

Company by Fortune magazine for six years in a row. However, the company collapsed

in 2001 and filed the largest bankruptcy in American history. The bankruptcy put 4,500
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Houston-area residents out of work and wiped out most of the savings in employee

pensions. The Enron name became synonymous with unethical behavior, shame and

failure. The continued use of the name Enron Field stigmatized the Astros (Jensen &

Butler, 2007).

While a case such as this should not deter school districts from seeking out

naming rights agreements with private companies, it should provide enough evidence to

convince school district officials to take precautions to safeguard against being caught up

in a similar scenario.

Antitrust considerations

According to Fortunato & Richards (2007), the issue of sports sponsorship

exclusivity is an extension of the larger legal concern about how advertising, both as a

form of communication and a factor in the economic marketplace of goods and services,

fits within the protection of the First Amendment. Advertising is surely the exercise of

free speech, but it also is a powerful economic tool, one capable of creating a regulatory

tug-of-war between protecting free expression, while simultaneously controlling the

excesses of capitalism.

Indeed, a number of school districts already employ certain exclusivity

agreements with private companies, including arrangements with soda companies to

stock only their products in vending machines on district campuses and in concession

stands for sporting events. Although high school stadium naming rights deals could

include exclusivity contracts, which could increase the value of such deals, where should
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the line be drawn? Will there come a point when high school student athletes are

prohibited from wearing a certain brand of shoe because of a naming rights deal with

another shoe company?

While the benefits to the sponsoring corporation and the sports property itself are

immense, the value of this system to the consumer remains in serious question. These

sponsorship agreements are confined to just those mega-corporations with the finances to

purchase such an agreement, at least for the premier sports properties. But these deals

also restrict consumer exposure to, and ultimately choice of, brands while at the event.

And the price, in most instances, reflects that lack of competition. There is little doubt

that these exclusivity provisions are anticompetitive, as they are intentionally designed to

limit consumers choices to the sponsors brands (Fortunato & Richards, 2007).
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Summary and Conclusions

The sale of naming rights by school districts is increasingly becoming a viable

option for funding upgrades and the construction of new facilities especially

considering the current state of state and federal government funding of public education.

School districts nationwide have had to cut budgets and eliminate programs to make ends

meet, and with no clear solution in sight, district officials continue to explore a multitude

of possible funding options.

However, there are a number of important issues that must be considered when

exploring the possibility of selling naming rights to a private company. Potential buyers

must fit with the image of the school district, and precautions must be taken (such as

ethics clauses) to ensure the agreement is minimally damaging should the company

endure any negative publicity.

Theres also the possibility of over-commercializing the school district with too

much advertising. Schools dont want to look like NASCAR, said Arrowhead

(Wisconsin) athletic director Kevin Flegner. That is usually something school boards

will say right away, We dont want all these different billboards. (Stewart, 2012).

School districts must balance all of these considerations when exploring the sale

of naming rights. Ultimately, what is best for the kids they are responsible for should

guide the decision-making process.

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Bibliography

DeSchriver, T. D., & Jensen, P. E. (2003). What's in a Name? Price Variation in Sport

Facility Naming Rights. Eastern Economic Journal , 29 (3), 359-376.

Fortunato, J. A., & Richards, J. (2007). Reconciling Sports Sponsorship Exclusivity with

Antitrust Law. Texas Review of Entertainment & Sports Law , 8 (33), 33-48.

Gloucester Fishermen Athletic Association. (2011). Retrieved November 17, 2012, from

Gloucester Athletics: http://www.gloucesterathletics.org/

Haag, M. (2011, July 5). Dallas ISD to consider selling naming rights at schools,

stadiums. Retrieved November 17, 2012, from DallasNews.com:

http://www.dallasnews.com/news/community-news/dallas/headlines/20110705-

dallas-isd-to-consider-selling-naming-rights-at-schools-stadiums.ece

Jensen, R., & Butler, B. (2007, October). Is sport becoming too commercialised? The

Houston Astros' public relations crisis. International Journal of Sports Marketing

& Sponsorship , 23-32.

McCollum, S. (2005, February). Should Schools Court Corporate Sponsors? Literary

Cavalcade , 18-19.

Molnar, A. (2002). The Corporate Branding of Our Schools. Educational Leadership , 60

(2), 74-78.

Stewart, M. (2012, September 3). Naming rights trickle down to high school level.

Retrieved November 17, 2012, from JS Online:

http://www.jsonline.com/sports/preps/naming-rights-trickle-down-to-high-school-

level-tv6nn30-168421646.html