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Selling Naming Rights for High School Athletic Facilities

By Dr. David Hoch, CMAA on November 02, 2020 hst Print

Editor’s Note: The following is an interview with Andy Tebbe, athletic director, Westfield (Indiana) High School, and Kenneth Barreras, director of athletics, Albuquerque (New Mexico) Public Schools, regarding the concept of naming rights to school facilities as a means of fund raising.

Question: What led you to institute a naming rights program at your school? What went into your thinking, who was involved in these discussions and how long did it take to get started?

Tebbe: The Westfield Washington School District is a fast-growing school community and the football/track stadium, in particular, was much too small and many of our athletic facilities needed some upgrades. In 2010, the idea of building a new stadium gained considerable momentum and the administration at the central office tasked the athletic department administrative staff with finding sponsorships to help pay for the facility.

To accomplish this goal, it was decided to start a capital campaign, so we formed a committee that included representatives from the central office, our principal and several key members of the community. The community members were selected based upon their involvement and association in various organizations and their connection to potential sponsors.

The committee met for approximately two to three years, and the members got the ball rolling by getting our first several naming right sponsors. By 2013, we had several sponsors and started construction in 2014. From this point on, the athletic department has overseen the naming rights program and currently have 90 percent of the naming right opportunities contracted.

Barreras: The naming rights agreement came about as the plans for building a new sports complex started including a football stadium with an adjacent track and field/soccer venue. The large tract of land had been identified as a location for the construction of additional schools.

A local bank, Nusenda Credit Union (formerly New Mexico Educators Federal Credit Union), had an ongoing relationship with the district athletic department from an advertising and promotional standpoint. It also had a relationship with the Albuquerque Public Schools Foundation supporting educational programs.

In addition, the APS Foundation also contracted with an individual whose responsibility was to identify donor opportunities and negotiate agreements on behalf of the Foundation. The process to reach an agreement with the credit union and the Foundation lasted about eight months.

Question: Did you use college examples as a guide or were there any other high schools that you used as points of reference? Specifically, how did you determine the cost to have a family’s or corporation’s name added to one of your venues?

Tebbe: Both college and professional sports naming rights programs definitely served as motivators for us, but they obviously get national exposure which high school sports do not. Therefore, our capital campaign had to be more locally based.

Several other high schools in the area had already dabbled with naming rights by getting hospitals or car dealerships as sponsors for their stadiums. Lafayette Jefferson High School had just sold naming rights to its football stadium and field; therefore, we took some of their ideas to help formulate our initial plan.

However, we wanted to take it to a whole new level by naming several of our other athletic facilities, outdoor buildings and locker rooms which we thought represented a much larger opportunity. Determining the cost of adding a sponsorship name was more of an art than a science. Since our community committee members included local business owners, they helped us determine the value of the various naming rights.

Barreras: We briefly looked locally at the University of New Mexico and a few examples from high schools in Florida. It was quickly determined, however, that the agreement would not simply be a naming rights deal benefitting the athletic department, but also one that supported many educational programs of the school district and continuous support for the APS Foundation.

The cost of the agreement was a combination of determining what Nusenda was currently contributing to the APS Foundation and figuring the fair market value for this type of partnership with the athletic program. Since we found no other relationship of this type locally and it was the school district’s first opportunity, negotiation settled quickly on an eight-year agreement.

Question: Have you considered separate naming agreements for the field and the stadium as well as the court and gymnasium? How many of your other facilities have you or will you include in your naming initiative?

Tebbe: Currently, we do not have a naming right sponsor for the stadium field. However, we would definitely add one if the right partner appeared. We do have our gym and soccer stadium named and we also have naming right sponsors for various gate entries, locker rooms, the Wall of Champions and the video boards. In time, in order to maximize the support for our program, we will try to be creative and constantly look for additional opportunities.

Barreras: We have considered additional agreements for the 13 comprehensive high school sites and 29 middle schools that participate in athletics. However, the stadium and track venues are the only ones completed.

Question: Do the contracts for your naming rights have a set limit in terms of years? If so, how long are they in effect? With inflation, the increasing financial needs of your program and changes in budget support, how do you keep pace? Is there a provision that the current family or company gets the right of first refusal to renew its contract or would you completely open up the bidding process?

Tebbe: Most of our naming right sponsorships are for five years, but we do have a couple of the 10-year variety for our larger agreements. Current sponsors do have rights of first refusal and several have already renewed. If a spot opened up for a naming rights, we would definitely seek new sponsorship. Our naming rights program is not old enough to really know how inflation or the economy will affect pricing in the future. We will have to consider and analyze this when we are faced with this situation.

Barreras: As already mentioned, our agreement is for eight years. With the end of the agreement near, many of the circumstances have changed. The budget impact on the athletic operational budget from this agreement is minimal. The revenue generated from this initial agreement was earmarked in the Foundation for financial support outside of the district’s operational budget.

Since both parties have been happy with the arrangement, Nusenda Credit Union will have the first right of refusal.

Question: Is there any company, due to the products or services that it produces, which you would turn down for your naming rights program? Do you take into consideration how the community may feel about an association with a particular company and how do you go about ascertaining its opinion?

Tebbe: The only companies or businesses we have turned away are direct competitors of sponsors we already have. But as a school district, we are conservative by nature and community values definitely have to be taken into consideration.

Barreras: Yes, absolutely. In accordance with school board policy, any company associated with alcohol, tobacco or gambling are off limits.

Also, we have other school district exclusive agreements (e.g., beverage contract, etc.) that would not permit us to consider some companies. Also, our school board and district leadership is very aware and cognizant of the community perspective. The board makes great use of community input when making decisions relevant to school district business.

Question: In addition to the family’s or corporation’s name which is added to the venue, what else do they get for their large financial contribution? What perks or benefits do you include such as tickets to games, parking, signage or mention in programs and newsletters?

Tebbe: We have two large video boards on the back of our press box that are in full display on U.S. Route 31. All naming right sponsors get their name and logo displayed on these boards. Tens of thousands of cars go up and down Route 31 on a daily basis.

Also, we thank all naming rights sponsors at any event that has a public-address announcer. Sponsors also can set up booths or tables at our events to pass out information and some even display their products such as cars or lawn equipment in our venues.

Barreras: The agreement includes various promotional opportunities at other school district athletic facilities and promotions on the website and employee newsletters. Nusenda receives numerous complimentary passes to all APS athletic events. Signage is very prominent at the facility, and during the football/soccer season they have a number of games where they set up an area to distribute promotional items.

Question: What have you learned by initiating this program that could be of value to other school districts that may be considering this funding approach? Would you do anything differently?

Tebbe: The biggest thing you have to sell is the value that a potential sponsor may garner that will help their business derive from advertising, the generation of goodwill and a connection to the community, and not just a donation. You also have to have patience. It took us six to eight years to sell 12 naming right sponsorships.

Barreras: A naming rights initiative is an incredible opportunity provided you find the right partner. The Nusenda name and its people have been incredible to work with and have a great relationship with the APS. They are very supportive of the efforts of the school district and have great loyalty by supporting all the various school programs.

This is the type of partner I would always recommend that any district should look for and with whom to negotiate. And we would not have done anything differently. The facility was (and really still is) brand new and the timing of the situation lent itself to this partnership.

Moving forward, there may be changes due to different and future circumstances. Securing a long-term agreement with an agreeable and appropriate partner has become the highest priority, and the revenue generated by any agreement is secondary but important.