New Fenway naming rights estimated at $2m annually
By Meg Vaillancourt, Globe Staff, 05/27/2000
ans and traditionalists may cringe, but the Boston Red Sox appear resigned to the likelihood that a new Fenway Park will have a new name.
The team hasn't officially put naming rights on the auction block yet. But as the Red Sox struggle to secure $352 million to build its ballpark, general manager Dan Duquette said yesterday the team could net $20 million over 10 years from a corporation eager to put its name on the facility.
Duquette's ''estimate,'' offered during a taped interview with WBZ-TV (Ch. 4) slated to be broadcast tomorrow, marked the first time a team representative has signaled that the Red Sox will probably have to sacrifice the Fenway Park name.
''Before we ask for the first public dollar, we have to be sure we've maximized our private investment,'' Duquette said last night. ''Selling naming rights is not something we want to do. But we're making the largest private commitment in the history of professional sports, so we have to pursue every viable option.''
Some say the team is lowballing its estimate. They counter the Red Sox could collect up to $100 million in a multi-year deal for the right to rechristen Fenway Park.
To bolster their argument, skeptics cite a number of recent naming right deals - from the Staples Center in Los Angeles, where the Framingham office supply company paid $100 million for a 20-year naming contract for the new home to the NBA's Lakers and Clippers and the NHL's Kings, to a new arena in Nashville, which garnered more than $80 million for the NHL's Predators.
But Red Sox officials argue that those contracts usually cover longer terms, or include other am enities such as ballpark signs, corporate seats, television and radio advertising, and other incentives.
''We've already included the revenues from those sources in our financing plan,'' Duquette said. ''So the $20 million is just for the name, with no other sweeteners.''
Sports marketing experts agree. They note that despite the big numbers associated with naming rights, most contracts include a slew of additional incentives aimed at enticing corporate sponsorship.
''Enron paid $100 million for a 30-year naming contract for the Houston Astros' new ballpark, but that comes with sweeteners, including an agreement under which Enron will supply the energy to the ballpark,'' said Matthew Freedman of Sports Marketing Report, a Chicago-based publisher. ''Every deal is unique.''
''Still,'' Freedman added, ''I'd think that with the Red Sox' storied history, they could get more than $2 million a year from naming rights.''
Team officials stress that with the fate of their proposed new ballpark far from clear, they have not pitched a naming rights deal yet. Indeed, Red Sox chief executive John Harrington has repeatedly said he'd like to retain the name of Fenway Park. But as the team, which is controlled by a charitable trust, struggles to leverage about $80 million equity to fund a $352 million ballpark, a naming rights deal seems almost preordained.
Robert Starkey, a Minneapolis financial consultant to the Red Sox and Major League Baseball, estimated a stripped-down naming rights package is worth somewhere between $2 and $3 million a year.
Sports financing experts also argue that multi-use arenas hosting more than one team, such as LA's Staples Center and Boston's FleetCenter, can usually command higher prices for naming rights because they offer corporate sponsors myriad events and much wider potential marketing opportunities.
Bob Caporale, who helped put together the FleetCenter deal, said the $20 million estimate offered by Duquette seemed ''a little low'' for Fenway's naming rights, but he stressed it depends on how the deal was structured.
''I'd think naming rights for a new ballpark in downtown Boston could generate $3 to $5 million a year,'' said Caporale, CEO of Boston-based Game Plan Inc. ''But if the team got the cash up front, that could help build the new ballpark, so it could make a big difference.''
Among the names frequently mentioned for a new Fenway Park are scores of local corporations, including Fleet and John Hancock, both of which are Major League Baseball sponsors. Cambridge-based Polaroid and Hopkinton-based EMC are also viewed as possible contenders, while Boston-based Gillette Co. ruled out a bid because its sports marketing focus is primarily outside the United States, according to a report in the Boston Business Journal.
But some local analysts argue that given the revered status Fenway has in the hearts of many fans, the expected backlash of a name change could substantially reduce the value.
Indeed, true to the tradition of impossible dreams, some Red Sox fans hope that a rich dot-com executive or would-be owner looking to curry favor with Harrington will buy the rights - and name the new facility Fenway Park.
The interview with Dan Duquette will air on ''The WBZ/Boston Globe News Conference'' at 11 a.m. tomorrow.
This story ran on page A01 of the Boston Globe on 5/27/2000.
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