This article has been submitted by Alex Jackson.

Ahhhh, where were you when professional sports transitioned from a past time and leisure activity to a major corporate spectacle? Was it the first time you watched a soccer game and saw all the corporate logos? Was it during the Tostitos Fiesta Bowl? Maybe the San Diego Credit Union Poinsettia Bowl? Or was it during the Built Ford Tough Pre-Game Show? Or the first time your favorite stadium was adorned with a corporate logo and name?

I vividly remember the then terrible Ottawa Senators when they opened their brand new arena in early 1996. The Palladium was a beautiful, if uniquely named, arena. Ottawa had finally made it, a brand new, state of the art arena. Then, within a blink of an eye, the Palladium was gone. A mere 15 days from the time the first puck was dropped, the Palladium ceased to exist. It was now the Corel Centre. My naiveté was over. Sports was business first and entertainment second.

According to the ever reliable Wikipedia, stadium naming rights in North America date back to 1953, when Anheuser-Busch, who had recently purchased the St. Louis Cardinals, tried to rename Sportsman’s Park to “Budweiser Stadium.” MLB blocked the name change, though the stadium would eventually be renamed “Busch Stadium,” after one of the company’s founders and a soon to be released brand. Corporate naming rights were here to say.

In recent years, the amounts paid for naming rights have become almost unbelievable. The two highest thus far are both from the New York City area. CitiGroup has agreed to pay $400 million over 20 years for the rights to the New York Mets new stadium, set to open in 2009. Additionally, Barclays has agreed to shell out the same amount over the same time period for the rights to the Nets new home in Brooklyn, set to open in 2010.

With such huge sums of money being paid out, I thought it would be interesting to see how the stock prices of stadium sponsors have responded since acquiring the naming rights, particularly once the corporate name is on the stadium in season. A year and a half ago, Forbes published a list of the ten richest stadium naming rights, at the time neither CitiField now the Barclays Centre was included. Lucas Oil Field, the soon to be home of the Indianapolis Colts was; because Lucas Oil Field has yet to be used for a game, I will not include it. This is not a comparison of before and after, rather just a look at the change in the company’s stock price. If, in the future, I can find accurate, historical market capitalization figures, an update may occur.

Let’s have a look at 9 of the 10 (or 9 of the 12) most lucrative naming rights deals. Below each summary is a chart of the sponsoring company’s stock price.

Stadium: Reliant Stadium
Total value: $300 million
Length of deal: 30 years
Average annual value: $10 million
Pro sports tenants: Houston Texans
2002-present

Stadium: FedEx Field
Total value: $207 million
Length of deal: 27 years
Average annual value: $7.7 million
Pro sports tenants: Washington Redskins
1999 – Present

Stadium: American Airlines Center
Total value: $195 million
of deal: 30 years
Average annual value: $6.5 million
Pro sports tenants: Dallas Mavericks, Dallas Stars
2001- Present

Stadium: Philips Arena
Total value: $181.9 million
Length of deal: 20 years
Average annual value: $9.1 million
Pro sports tenants: Atlanta Hawks, Atlanta Thrashers
1999- Present

*I realize that the chart and the numbers in the table do not correspond to each other, I honestly don’t have an explanation.

Stadium: University of Phoenix Stadium
Total value: $154 million
Length of deal: 20 years
Average annual value: $7.7 million
Pro sports tenants: Arizona Cardinals
2006 – Present
*The University of Phoenix Online is a subsidiary of the Apollo Group. It is the Apollo Group’s stock price that is reflected here.

Stadium: Bank of America Stadium
Total value: $140 million
Length of deal: 20 years
Average annual value: $7 million
Pro sports tenants: Carolina Panthers
2004- Present

Stadium: Lincoln Financial Field
Total value: $139.6 million
Length of deal: 20 years
Average annual value: $7 million
Pro sports tenants: Philadelphia Eagles
2003- Present
* Lincoln Financial is a subsidiary of Lincoln National which is shown.

Stadium: Lucas Oil Stadium
Total value: $121.5 million
Length of deal: 20 years
Average annual value: $6.1 million
Pro sports tenants: Indianapolis Colts
Scheduled to open in 2008

Stadium: Invesco Field at Mile High
Total value: $120 million
Length of deal: 20 years
Average annual value: $6 million
Pro sports tenants: Denver Broncos
2001- Present

Stadium: Staples Center
Total value: $116 million
Length of deal: 20 years
Average annual value: $5.8 million
Pro sports tenants: Los Angeles Lakers, Los Angeles Clippers, Los Angeles Kings
1999 – Present

What do these numbers mean? I’m not really sure. I would like to think that stock performance has very little to do with a name on a stadium; however if a company, such as Philips, is forking over $9.1 million a year of their precious marketing budget, you would hope there is some sort of effect on market performance.

Perhaps, if given more time, I can delve further into this, however this first crack was more of a curiosity search. From a very limited sample size, and varying timeframes, it would appear that stadium naming does not have a positive effect on a company’s stock price. I have not done any correlations, and I have ignored both industry trends, such as the general slump in the airline industry and banking sector, and external factors, such as investigations into energy industry activities. On the whole, however, I would venture to say that naming rights have minimal influence on traders’ perceptions of market performance. Perhaps tracking market share and retention rates may provide clearer results.

This article has been submitted by Alex Jackson.