CMGI Buys Stadium Naming Rights

Aug. 25, 2000 -- Patriotism is admirable. But is it worth $114 million to CMGI?

The Internet conglomerate this week said it would spend at least $7.6 million a year over 15 years for the right to name the new home of the National Football League’s New England Patriots CMGI Field.

But the deal, among the richest such sports-venue agreements ever, raises questions about what kind of audience CMGI is playing to, and the cost-effectiveness of measures it’s taking to reach that audience.

Clearly, the deal to name the stadium will give CMGI a lot more visibility than, say, the now-maligned strategy of paying for a 30-second ad during the Super Bowl. Between signs on scoreboards, at the stadium’s main entrance and on nearby roads and highways, CMGI will get 2.8 billion ad impressions per year, according to Chairman David Wetherell.

And that figure doesn’t include other benefits of the deal, such as a suite at the stadium and sponsorship rights to each season’s first home preseason game. The stadium is to be inaugurated for the 2002 season.

CMGI says it will use the deal to promote its own brand as well as the businesses of firms it controls or in which it holds a majority stake. Among those are the advertising firm Engage and the AltaVista Internet portal.

Plays Well at Home

Measuring the benefits of stadium-naming deals is difficult, but there are positives, especially on the home turf. In a 1997 survey conducted by sports marketing firm Performance Research, 90 percent of respondents could recall, without prompting, the corporate sponsor of their local sports arenas. The polling also found that 61 percent felt a sports facility named after a corporation was a plus for their communities. It’s another question, though, whether the deal with the Patriots helps the Andover, Mass.-based CMGI build a national or international audience. “We think we’re going to get a lot of national visibility out of this,” says David Andonian, CMGI’s president of corporate development. CMGI says the stadium deal is just one step the company is taking to buttress its national brand targeted at both business and consumer audiences.

Footprint Is Regional

“It’s not enough to put a sign up and say, ‘I’m a sponsor,’” says Lesa Ukman, editor of IEG Sponsorship Report, which covers sports, arts, entertainment and cause-related marketing. Although CMGI might get national exposure, the deal won’t make it a national brand, Ukman says. “You’re aligning with one team as opposed to everyone’s team.”

Ukman estimates the market value of the exposure that CMGI will get is worth perhaps half of what the company is paying. She says better strategies for building its desired national audience might include spending money on hospitality suites at several stadiums, or creating promotions that more tangibly drive sales or change people’s opinions about the brand. But Uri Landesman, chief investment officer of CMGI shareholder Fleck T.I.M.E. Fund, says he thinks the deal should bolster CMGI’ on Wall Street. The company, Landesman says, has been hurt in the market because the company’s vital business-to-consumer sector is out of fashion and because investors have turned on Internet stocks. Prior to the stadium deal, CMGI’s stock had fallen more than 75 percent from its all-time high of 163. “Fairly or unfairly, their reputation as an operating company doesn’t match what their reputation used to be as a venture-capital company,” says Landesman.

Now the company has purchased an association with that tried-and-true brand, the NFL.