Corporate sponsorships are everywhere you look. Almost every major sports facility is named for a corporation that donated a large sum of money for the privilege. But that privilege comes with benefits the corporation is counting on--making more money from the audience reached through the corporate sponsorship. When a company forks over the money to sponsor high-profile teams, such as Notre Dame football, for example, the money paid to be a corporate sponsor is returned many times over.
History
While it may seem that corporate naming rights are a relatively new phenomenon, they have been around since 1926. That was the year that the home of the Chicago Cubs was renamed Wrigley Field after William Wrigley, the team's owner and also owner of the Wrigley Chewing Gum Company. The practice has grown so much that some people think our society is becoming far too commercial. Buildings and sports fields once named for people or cities are now often named for the corporations that help fund them. When the Baltimore Colts moved to Indianapolis in 1984, they started playing their home games in the Hoosier Dome. The dome later was named the RCA Dome when Thompson Consumer Electronics paid for naming rights. In the fall of 2008, the dome was vacated for the Colts' brand new stadium, called Lucas Oil Stadium, and the company's name is prominently displayed on the building's exterior. All of these examples focus on sports teams because they are so visible, but there are many other examples in our society.
Significance
While naming rights and other types of corporate sponsorships can bring in badly needed funds and prevent public taxes from being raised, communities and institutions must ask the question: Just what is for sale, and where should the line be drawn? The people of Chicago decided the name of the newly expanded Soldier Field, home of the Chicago Bears, was not for sale in 2001 shortly after the Sept. 11 attacks because the field had been named when it was built in 1924 to honor the soldiers of World War I. People in Denver decided the new Mile High Stadium should not be named Invesco Stadium for the mutual fund company that wanted naming rights. Instead, a compromise was reached; Invesco Field is in the new Mile High Stadium. The company paid $120 million to get its name on the field. If a community decides naming rights aren't for sale, there are other types of sponsorships to consider that might be more palatable. Corporations advertise on team jerseys, stadium billboards, and even on concession stand cups for every beverage sold.
Effects
Corporations can be richly rewarded for sponsorships. For example, for a corporation sponsoring a high-profile sports team, a televised game can get it more publicity in one afternoon than it could buy on that network for the price of the sponsorship. Companies have seen significant leaps in their stock prices and sales following such televised sporting events. But the effect on the company isn't the only factor that should be considered when thinking about accepting a corporate sponsorship. A large soft drink company entered into sales agreements with some school corporations around the country in exchange for large sums of money. In 1997, a deal with one school district in the western United States required the district to sell 70,000 cases of soda every year to its students. While the money the company donated would be significant if these sales goals were reached, the effect of this sponsorship on the health of the school district's students would be negative. Is the health of our children for sale?
Considerations
Communities should ask if everyone entering into the agreement understands where naming rights begin and where they end. Will the naming rights be for the building alone, and will it be plastered all over the exterior? Where else will the corporation expect to see its name? And what happens if the corporation experiences a major financial downturn and suddenly cannot meet its commitments for the sponsorship? Will its name stay on the building? If not, who pays to have it removed? The taxpayers? These are legitimate questions that taxpayers have every right to ask.
Potential
Corporate sponsorships can fund projects that benefit communities, institutions and entire regions. The Eli Lilly Endowment and members of the Lilly family have funded fitness centers, cultural facilities and buildings on college campuses all over Indiana and other states that have enriched those communities immeasurably. The corporate endowment also provided seed money for community foundations all over Indiana and other states as well. These foundations were schooled in grow those funds to enrich their own communities in perpetuity. This type of corporate funding is truly altruistic. While the company does expect some naming rights for buildings it funds, none were requested for the community foundations. Those are named for the counties in which they reside. So the potential is there for corporate sponsorships that are truly beneficial beyond the funding they provide and communities must consider all options carefully--weighing the pros and cons of each potential corporate partnership.
