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The Honolulu Advertiser
Posted on: Tuesday, June 6, 2006

American rolls a double in arena name-game play

By Theresa Howard
USA Today

NEW YORK American Airlines has a rare opportunity to slam-dunk its brand into the minds of basketball fans starting Thursday, when the NBA Finals begin inside the two arenas that carry the ailing carrier's name.

It pays more than $8 million a year in naming rights, which ensures that the Dallas Mavericks play in the American Airlines Center while the Miami Heat cool off in the American Airlines Arena.

That has marketers at the airline, which lost $92 million in the first quarter, dreaming up ways to capitalize on its home courts advantage. Yesterday, it was still working on a fan promotion.

"Once it dawned on us that this could happen, and that we're the only corporation that has the opportunity to do something, we said it's a no-brainer we have to do something," says American Airlines spokesman Tim Wagner.

Some sports marketing experts say the airline already is a winner. American's name appears inside and outside both arenas, each of which can accommodate about 19,000 fans. It will frequently appear in print and online stories about the games, as well as on ABC's broadcasts.

Such mentions are "a key driver behind naming-rights deals," says William Chipps, senior editor with IEG Sponsorship Report. "If I was from American Airlines, I would be very happy."

In addition to scoring with consumers, the company could win points with Wall Street, says University of Missouri-Kansas City finance professor Stephen Pruitt.

American "made the sponsorship agreements when neither team was in the playoffs, then bang both teams make the playoffs at the same time," he says. "That's an extraordinary windfall for American Airlines."

Company stock prices, on average, rise about 1.7 percent when they sign stadium deals, he found in a 2002 report on naming rights. Then it's up to the teams to make the deals pay off.

"Winning was the single most important variable in predicting how successful these sponsorships were perceived by the investors," Pruitt says.

Sponsors of teams that win 65 percent of their games see their shares rise almost twice as much as those that support teams that only win 35 percent, according to Pruitt's study.