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Could US-American merger mean a new name for Suns' arena?
In 1992, America West Airlines signed a 30 year, $26 million naming rights deal for the city-owned arena that is home to the Phoenix Suns. After America West merged with US Airways, the arena took on the new airline’s name.
Now, as US Airways moves closer to yet another merger, KJZZ’s Nick Blumberg looks at how that could affect the arena, and how companies choose what to put their name on.
If the merger with American Airlines goes through as expected, the new company will bear American’s name, and it will own the naming rights for US Airways Center. John Eaton teaches marketing at ASU’s WP Carey School of Business. He pointed out that the Suns’ home court would be American’s third.
“We have the American Airlines Arena, and then also the American Airlines Center, in Miami and Dallas," Eaton said. "So it’ll be interesting to see if they tack on ‘American Airlines’ and add a third label to that; the American Airlines Garden, perhaps.”
Or, the company could give up the naming rights. US Airways is one of the largest private employers in the state, so I called around to a few of the others to see if they might be interested, but the people I got ahold of did not exactly have naming rights at the forefront of their mind.
Some of Arizona’s top companies already have sports arenas, like Wells Fargo and Chase, but how about a McDonald’s Center, easily nicknamed the Big Mac? Or why not catch a game at Raytheon Missile Systems Arena, aka the Missile Silo, although Raytheon told me in a statement, “We generally look at other types of vehicles for brand recognition.”
This sign is just one of the many things that would have to change if US Airways Center decides on a new name. (Photo by Julie Levin-KJZZ)
So, what do companies look for in a naming rights deal? Kenneth Shropshire teaches the business of sports at the Wharton School in Pennsylvania. He said companies look at the potential for impressions, which basically means, “How many times will their name be mentioned in conjunction with the stadium or the arena? In football, will this facility be used for the Super Bowl? Basketball, will it be used for an NBA All-Star Game?”
And they look at how well a team is playing and how likely it is to be on national broadcasts.
Companies might also think about how naming rights will affect their stock price. There is a study from a few years ago that shows a slight uptick in price right after a naming deal is announced; but there’s another study that found no boost to stocks.
“I don’t think there’s a consensus," Shropshire said, "and like so many things, you can find a study that will support your position.”
Neither US nor American will say what name US Airways Center might bear in the future. For his part, ASU’s John Eaton would be surprised to see another company’s name high above Jefferson Street.
“Unless the company has gone bankrupt, it’s relatively unusual to see them give up the naming rights deal," Eaton said. "Especially with the rate at which it was signed, well below a million dollars a year, that’s a pretty attractive price point."
But Eaton said if the new American Airlines does not want to hold onto the rights, plenty of other companies will be lined up looking for a bargain.