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American Airlines Hopes for Boost From Hoops
Jun 8, 2006
American Airlines Hopes For Boost From Hoops
(AP) DALLAS -- American Airlines will have the home-court advantage throughout the NBA Finals between the Dallas Mavericks and Miami Heat -- its name adorns the arenas for both teams.
Experts say it's the first time that one company's name has appeared on venues for both ends of a major pro sports championship series in North America.
The best-of-seven series will test the theory that naming rights, which cost millions of dollars a year, have value beyond feeding corporate egos. It might even influence bidding to name new stadiums and arenas.
"For American Airlines, this is the perfect storm," says Bill Glenn, a vice president at The Marketing Arm, a Dallas firm that advises companies that buy naming rights. "You have two teams that epitomize success, with figures who represent strong leadership. Those are images any brand wants to be associated with."
Another firm that advises buyers and sellers of naming-rights deals estimates American will get $9 million of advertising per game from the nationally televised series, although some are skeptical of such figures.
American Airlines won't say how much it paid for the naming rights. According to published reports that airline officials wouldn't confirm or deny, the company agreed to pay $195 million over 30 years for the American Airlines Center in Dallas, which is also home to hockey's Dallas Stars, and $42 million over 20 years for Miami's AmericanAirlines Arena.
American struck both deals in 1999-2000, when it was flying high. That was before 9/11, high fuel prices and tough competition. Since the beginning of 2001, parent AMR Corp. has lost more than $8 billion.
AMR, which nearly went bankrupt in 2003, considered giving up the arena deals.
"But we had (long-term) contracts in place, and when you're trying to compete, you need to continue to advertise and promote your business," said Tim Wagner, a spokesman for Fort Worth-based American.
The naming-rights business boomed in the 1990s as an alternative to traditional advertising. Some deals didn't work out so well. Dot-coms that bought rights failed when the tech bubble burst, and Houston's Enron Field had to be renamed Minute Maid Park after the hometown energy company collapsed in scandal.
The naming business has scored something of a comeback in recent years, as companies spent millions a year to christen new NFL stadiums FedEx Field in Washington, Lincoln Financial Field in Philadelphia and Reliant Stadium in Houston.
"It's a great way to build brand identity," said The Marketing Arm's Glenn, whose firm doesn't work for American but helped negotiate AT&T Inc.'s deals at AT&T Park for the San Francisco Giants and the AT&T Center, where the NBA San Antonio Spurs play.
