The BC Place naming rights file: Astonishing in both substance and style

You can debate fair market value on any kind of sponsorship all you want, because that's different things to different people. You can hold out as a purist and not embrace the era of corporate naming rights as deals that often make the difference between profitability or red ink for arenas and stadiums. Yet I simply can't fathom that anyone could suggest the BC Liberal Government's handling of the BC Place file over the past nine months remotely resembles good form or good governnance.

The BC Government's decision to cancel the $40 million naming rights deal that would have re-branded the newly-renovated BC Place as TELUS Park is astonishing to me at several levels.

I'm not sure what's worse: the decision itself or the process the Government took en route to rejecting the naming rights deal, especially after almost two years of negotiation with the largest private sector employer in British Columbia and more than nine months since the sponsorship agreement-in-principle went to Cabinet for final approval.

This is a train-wreck of a political decision that is shocking both in substance and style.

BC Minister of jobs, tourism and innovation Pat Bell showed little acumen in all three areas of his portfolio when he announced Wednesday that: "(BC Pavilion Corp) has terminated their discussions with TELUS. For us, the underlying principle came back to the name BC Place. There are many in cabinet and many across the province who believe that name has tremendous value to it and we wanted to retain that."

That's substance issue #1; claiming that there exists a strong grassroots attachment to the 29-year-old name. The Sport Market has done informal polling that found little if any of that, even in the older demographics. Moreover, three different focus group projects -- including one commisioned by the Government itself and another by PavCo -- do not support the kind of emotional investment in the name that minister Bell suggests.

Substance issue #2 surround claims by both Minister Bell and BC Premier Christy Clark that the proposed TELUS Park naming deal did not represent sufficient value to taxpayers. The evidence suggests exactly the opposite, at least when it comes to the track record of naming rights deals in North America.

The TELUS Park proposal would have ranked it fourth among all Canadian stadium and arena naming rights deals. Moreover, it would rank second only to Rogers Arena across the street as the richest deals in the country pro-rated to market size. Moreover, among the corporate naming sponsorships of more than 100 major league sport venues in North America adjusted to market size, it ranks in the top 20; not too shabby for a stadium that does not house an NFL, MLB, NBA or NHL franchise.

Even pro-rated against the Rogers Arena deal, the rejected TELUS Park deal holds its weight well, given that one building is averaging more than 50 major sports events per year, all on television and all sold out to capacity, and BC Place is home to about 30 CFL and MLS dates each year.

It's important to note that stadium naming rights are built on three major metrics. First is market size and reach, the second is the quantitative value of stadium event dates and capacity and the third is the subjective, qualitative value of those dates and the tenants playing their games there. There are a number of softer factors, ranging from location (downtown versus suburban), surrounding infrastructure (highway traffic and/or access to public transportation) and even time zone (with a definite skew towards higher naming rights deals in the eastern side of the continent).

Most analysts across the country were impressed last year that PavCo was able to get what it did in both cash and in-kind, at least as proposed in the now-cancelled deal.

Even measured against the two richest naming rights deals in North America – Citi Field in Queen’s, New York, and the proposed Barclays Center in Brooklyn, N.Y. – the TELUS Park agreement was on par on a per capita basis.

As suspect as the so-called reasons for the cancellation of the TELUS Park deal is the style with which the Government has handled this, through last summer, into the fall and now in the first quarter of 2012.

Poor form and even poorer governance; how else would you describe it when the largest private employer in the province works with your own crown corporation for close to a year to help launch the new BC Place and gets you through the heavy lifting...only to be told "no deal" once well more than $15-20 million in technology infrastructure and equipment is installed?

“I think TELUS is deeply disappointed with this decision, which we find regrettable,” said TELUS CEO Darren Entwhistle in the company's statement Wednesday. “We believe that TELUS, our brand and our 25,000 team members across British Columbia, would have been a great partner for one of the premier sports facilities in all of North America. We respect the decision that has been taken, and TELUS will instead focus on operationalizing our unparalleled $3 billion investment in this province and the welfare of its citizens.”

By building its case against the TELUS Park proposal on the brand equity held by BC Place, on the value of the deal and by suggesting PavCo should have little difficulty replacing the $40 million in naming rights by selling sub-sponsorships, Cabinet and Government are only encouraging curious minds to figure out what really happened or is happening here. The front story almost begs the back story, especially given how obvious it is that not all of PavCo's tenant ducks were in a row on the naming rights deal.

Unless the Government can somehow find a face-saving way to revisit a naming deal with Vancouver-based TELUS or find a way to bring on another telecom such as Bell, this is a classic case study of politics and political relationships trumping commercial merit. Telecoms are ideal as top-of-the-food-chain partners of sports teams, leagues and venues, especially in this day and age of life made digital and mobile. PavCo was on the right track on that one, just as Canucks Sports & Entertainment was by replacing an automotive partner with a telecom partner across the street.

Yet the options available to PavCo and the Government now to come away with a good deal are much less than if Cabinet had handled this with more elegance and integrity.  

NOTE: Peter Brown is a heavyweight among BC businessmen, best-known for his role as Chairman and Founder of Canaccord Capital, one of the largest investment brokerages in Canada. He was a member of the Board of Directors of the old Vancouver Whitecaps of NASL vintage. He served the province on the Board of the Vancouver 2010 Olympic and Paralympic Winter Games. He's invested in the community through countless donations, including at the Vancouver Aquarium in Stanley Park. One thing he is no longer is a member of the Board of Directors of BC Pavilion Corp. His name was removed from the PavCo web site Friday afternoon. Multiple sources suggested his resignation was linked to his disappointment with the TELUS Park decision and/or process. Yet he himself denied that in an interview with Jeff Lee of The Vancouver Sun Friday night, as did PavCo Chair David Podmore.


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The Gold Standard of Television Engagement

There are a converted touchdown's worth of reasons whty the National Football League has become the gold standard of television engagement as measured by ratings.

Among the trends it benefits with in common with the other major North American professional sports leagues is the enhanced television viewing experience ushered in by the advent and evolution of HD and large-screen format products. The NFL is also the beneficiary of the proliferation of social media platforms as viral tools to drive traffic to its television platform. Like the other pro leagues, it is benefitting from a larger United States, both in terms of gross population and -- especially -- the number of TV households.

Yet the NFL is TV gold for myriad other reasons as well. It avoids audience burnout by staging a compact, four-month regular season of 16 games with an efficient, five-week playoff tournament leading to the big payoff known as Super Bowl.

It commands its audience with destination TV Sundays, Monday nights and now increasingly Thursdays.

The other sports to some degree market their personalities, but the NFL is truly star-based, with quarterbacks providing TV audiences with a focus of attention that only baseball can rival with its pitchers and hitters doing one-on-one situational combat.

Yet in my view easily the best thing football has going for it is cultural dominance...and it's cultural dominance driven by a television strategy and media platform that is second to none. Multiple stakeholders spanning each of the major networks in one form or another are part of the NFL "family": NBC, FOX, CBS and ESPN (representing, of course, Disney/ABC).

That approach leads to sports news and feature coverage like no other sport, following the cycle of high school football Fridays, college football Saturdays and pro football Sundays. For added measure, it's extended by Thursday night games at the front end of the weekend (cross-promoting what's to come Sunday) and backended by Monday Night Football as the perfect reminder of what fans saw -- or missed -- the previous weekend.

It generates lead-in programming coverage that makes Sunday, more than any other day, Football Day in America.

Finally, it leads to cross-promotion that sees each of the rival networks predisposed to hyping Super Bowl, even in the years when they don't have the rights. It's the best of both worlds as the networks compete by striving to outdo each other on their coverage but cooperate by respectfully cross-promoting, especially during the Super Bowl tournament.

That's why the audiences for Super Bowl grow each year and that's why yet another record will be set today.

It's the latter reasons that really bring light users and casual fans to the table, doubling the base of harder core football fans who tune in for the conference championships to the tune of 55M average audience numbers.  It's casual fans that take it into nine-figure TV audiences and make it the biggest TV show in North America, with each February surpassing the last.