Courtesy Atlanta Falcons
From behind a podium yesterday morning, Arthur Blank watched as a black cloth was pulled off of the table in front of him, revealing an architectural model displaying the official name of new $1.5 billion home for his Atlanta Falcons and Atlanta United FC: Mercedes-Benz Stadium. It featured the German carmaker’s name across its scoreboards and on its walls, as well as the company’s iconic logo plastered atop its retractable roof.
“I think we’ll be the only company in Atlanta whose logo can be seen from the International Space Station,” Mercedes-Benz USA President and CEO Steve Cannon joked at the press conference. “Subtle marketing.”
Mercedes-Benz will hold the naming rights for the state-owned sports facility, set to open in 2017, for the next 27 years. Yet both Cannon and Blank declined to discuss the financial terms of the longterm deal—the single largest marketing expense in the car manufacturer’s 89-year history, Cannon said. The team’s—and the sponsor’s—reticence about disclosing figures mirrors the Braves’ strategy in announcing that its new Cobb County home would be called SunTrust Park. Neither franchise, nor the companies they struck agreements with, are under any legal obligation to disclose the terms. But the silence surrounding both sponsorship deals raises questions about an unavoidable reality of partnerships between government and professional sports franchises, which readily accept—and sometimes demand—taxpayer dollars to fund their for-profit enterprises, but sidestep the obligations of transparency accompanying traditional government projects.
Naming rights are nothing new. Wrigley Field, one of the oldest and best-loved sports fields in America, is named for the chewing gum manufacturer. But only in recent years have naming rights taken on enormous significance to a franchise’s bottom line. For decades, sports teams were in the practice of disclosing the financial figures for stadium naming rights deals. Up until 2007, when Barclays originally purchased naming rights for the Brooklyn Nets’ new arena in a 20-year, $400-million deal (that figure was later cut in half during the recession), Royal Philips Electronics held the NBA record for the largest naming rights deal, paying the Atlanta Hawks $185 million over 20 years to call its home Philips Arena.
About five years ago, Kennesaw State University economics professor J.C. Bradbury says, sports franchises and their corporate partners began to stop disclosing those figures, particularly as opposition grew to using public dollars to build sports stadiums. At the moment, efforts to build new stadiums for teams like the St. Louis Rams and San Diego Chargers using taxpayer dollars have resulted in lawsuits, protests, and relocation threats.
“You keep it quiet so that you’re not getting as much blowback,” he says. “It’s a PR decision.”
In some cases, the price tags associated with naming rights leak, despite the intentions of sports franchises and their corporate sponsors, giving the public some sense of the magnitude of revenues generated. Earlier this summer, the Minnesota Vikings announced U.S. Bank would be the top sponsor for its new stadium, though details weren’t disclosed. But unnamed sources familiar with the agreement told local media outlets the 25-year deal was worth between $200 million and $220 million. Back in June, the Tennessee Titans did not disclose the terms of its 20-year stadium naming rights agreement with Nissan. Citing several local sports experts, the Tennessean reported that Nissan paid somewhere between $100 million and $130 million, though the actual number remains unconfirmed. The largest reported naming rights deals, unsurprisingly, are in New York—including one with Citibank, which pays $20 million a year to place its name all over the home of the Mets.
William Perry, president and CEO of the recently launched Georgia Ethics Watchdogs, says it’s in the public interest for Blank and Cannon to release the deal’s terms. He says the public’s actual tab for the Falcons stadium will amount to more than just $200 million in bonds—the figure Atlanta officials have frequently cited as the cap for the public funding component of the stadium project, an amount that will come from the city’s hotel-motel tax. Perry argues that the true taxpayer cost could be much higher when taking into account the interest on the bonds ($448 million), a sales tax exemption for construction costs ($25 million), deals to buy land from two historic black churches ($34 million), and community redevelopment funds ($15 million). Both the Falcons and the Braves have qualified for state property sales tax exemptions that will save the organizations millions over the life of the stadiums.
“It’s a double standard when they’re taking in so much public money and are not disclosing private money in the naming of a public building,” Perry says. “It’s not against the law, but it isn’t what you’d expect from a good corporate partner in terms of their community and fan base.”
Last September, when the Atlanta Braves announced its new $672 million baseball stadium in Cobb County would be named SunTrust Park, team execs also declined to disclose the financial terms of the 25-year naming rights deal. Like Mercedes-Benz Stadium, the Braves will receive hundreds of millions of taxpayer dollars—nearly $400 million from Cobb taxpayers—to build the sports complex. To pay off the bonds, county officials plan to raise the cash from property, transportation, and community improvement district taxes. Though the Cobb-Marietta Coliseum and Exhibit Hall Authority will own the structure, the Braves call the shots on corporate partnership agreements.
“We have not shared the financial terms of our agreement, and that’s not something that we would share in the future,” Braves spokeswoman Beth Marshall says.
Manish Tripathi, a marketing professor at Emory University, says the level of scrutiny is lower around sponsorship deals because they’re an afterthought to the public compared to the stadium deals themselves. “The sticker shock is going to come from the larger number,” Tripathi says. “Once that fight is done, people care less, and are either excited or resigned that the stadium is coming.” For Atlanta’s professional sports franchises, the decision to stay quiet on flagship sponsorship deals is likely the path of least resistance, even if it’s the path that is least transparent.