Plenty of Questions Surround Mercedes’ Superdome Deal
Posted: 10/11/2011 10:06:01 AM by
Jim Andrews | with 0 comments
Stadium naming rights sponsorships never fail to create conversation about their value, origins and overall worthiness, and last week’s agreement to put the Mercedes-Benz name on New Orleans’ Superdome is no exception.
Unlike most other public facility title sponsorships, the monetary terms of this 10-year contract—which is between the automaker and the state-owned stadium’s main tenant, the NFL New Orleans Saints—have not been disclosed. This of course makes it extremely difficult to determine whether it’s a good deal for either or both sides.
Although some in the media have surmised that Mercedes’ annual payment is about the same as MetLife’s estimated $20 million-per-year deal for the Jets/Giants Meadowlands stadium, I don’t think it’s anywhere near that high.
In fact, if I were a Daimler AG shareholder, I would be concerned if the company paid much more than half that amount. Anything more than that and I’m not sure it’s a good deal.
Although I understand the iconic nature of the Superdome and the value of connecting with its feel-good comeback story from the depths of the Katrina aftermath, the main benefits of a naming rights deal are still national exposure—which I question whether a well-established brand like Mercedes needs—and a regional activation platform—which could be purchased with an official team deal sans venue naming rights.
Other benefits being thrown around—primarily the connection to Super Bowl and Final Four events hosted at the Superdome—are vastly overrated. Without an NFL or NCAA sponsorship, Mercedes will be blocked from the most valuable assets connected to those marquee properties.
Mercedes-Benz is a smart sponsor, as has been demonstrated through their Fashion Week and other deals. They also have a track record in naming rights deals, with their venue titles in Germany and China. My guess is that they were able to get this deal at a price lower than what other NFL stadium deals have gone for. That’s the only way they are going to earn a positive ROI.
Read more blog posts
Filed under: naming rights, pro sports, valuation, venues, automotive