Scotiabank’s record-setting $800 million deal for the naming rights to the building that houses Toronto’s Maple Leafs and Raptors is a major move that shifts the sports marketing landscape, but it isn’t without risks, experts say.
Under terms of the deal announced last week, the bank will pay a reported $40 million a year for the next 20 years to rename the building known as the Air Canada Centre to the Scotiabank Arena.
The price tag is enormous — more than 10 times what Air Canada paid for the inaugural rights nearly two decades ago — and head and shoulders above similar deals elsewhere in the country.
But it’s a premium price for a premium product, branding and marketing expert Tony Chapman said in an interview with CBC News. “I’m a big fan of this deal,” he said. “Sports is one of the last remaining franchises for live eyeballs, and people pay a big premium to be attached to any kind of sport — especially something like hockey in Canada.”
Scotiabank has been tying its brand to hockey for several years, with sponsorships of kids’ hockey programs, a presence with Hockey Night in Canada, and other naming deals with NHL barns in Ottawa and Calgary.
The move for Toronto’s sports palace is the culmination of that strategy.
“They’ve declared themselves as Canada’s hockey bank,” Chapman said. “There was no way they were going to let anybody else put their name on that building.”
Scotiabank officials were saying all the right things about the deal last week, with the bank’s vice-president of sponsorship and philanthropy Jacquie Ryan noting the 8,000 community teams they already sponsor across the country.
“Hockey is a key driver of our brand health,” she said, adding “the reach of a hockey sponsorship portfolio in Canada is significant.”
Ryan cited consumer research done for the bank that shows people who are aware of its financial support for hockey are 3.5 times more likely to consider using its services. “It’s quite possible that number could go up,” she added, thanks to increased visibility in one of Canada’s premier sports venues.
Is it worth it?
But other experts are not so sure the bank will get what it’s paid for.
Michael Leeds, an economics professor at Temple University in Philadelphia, co-authored a paper examining several similar deals with sports arena sponsorships, to see if they were worth it down the line.
The conclusion? “By and large there was no discernible impact on the…