In an effort to boost its bruised ego, CMGI
announced it would acquire the naming rights to the New England Patriots’
yet-to-be-built $325 million stadium. In exchange for the “CMGI Field”
vanity plate, the Internet venture capitalist will pony up $120 million
over the next 15 years for the privilege. Investors cheered the deal,
sending shares climbing 15% on three times average daily volume, and adding
nearly $2 billion in market cap to the beleaguered stock.
CMGI’s plan is to raise awareness for its brimming portfolio by driving
foot-traffic from football fans to its network of Web properties. While
some may question the worth in spending $7.6 million per year, it’s
comparable to most dot-com’s branding budgets; and desperate times do call
for desperate measures. Although CMGI doesn’t sell sugar water or Web
access to consumers, the name recognition could pay dividends in other ways.
Companies eager to pair with the pigskin have high hopes for blockbuster
nationally televised games. It also helps if you’re partnered with a big
market team who has a healthy record for winning. The Patriots score on
both counts, having gone from duds to studs in less than a decade ensuring
that couch potatoes everywhere will be sure to tune in. In addition, CMGI
will have a share at first dibs on cushy executive suites to wine and dine
bigwigs, as well as a wheelbarrow full of tickets to pass along to its
employees.
The name game has been running rampant in a booming economy crowded with
upstarts desperate to nail down an intuitive branding strategy. It’s also a
byproduct of the soaring costs associated with building swanky new stadiums
to attract players, ticket sales, and respect. Rather than saddle taxpayers
with sticker shock, owners are sniffing out interested corporations to foot
a substantial portion of the bill. But, prices for naming rights are easily
outpacing simple inflation in an effort to keep pace with explosive demand.
With a limited number of worthwhile stadiums to attract deep pockets keen
on high-priced toys, stadium owners are scrambling to unlock more hidden
value than the tomb of Egypt’s boy king. Recent deals include
PSINet’s 20-year, $100 million deal for the new
Baltimore Ravens stadium. Qualcomm plunked down
a modest $20 million to lock in its name on the San Diego Chargers’ stadium
for the next two decades. But hands-down, the most successful branding
initiative belongs to 3Com , with its wildly
controversial name swap of San Francisco 49ers’ Candlestick Park for a
paltry $4 million over 5 years. In the hotbed of technology, the
networker’s deal didn’t hurt in establishing itself as a household name.
Will CMGI be able to mirror the branding success enjoyed by other
technology firms? Well, for starters, the name isn’t all that catchy
outside of high-tech or investing circles, a sentiment echoed by one
Bostonian who opined, “sounds like a pregnancy test.” But if the gamble
should pay off, the price paid for CMGI’s long-term partnership will likely
prove relatively cheap in hindsight to rivals who consider following suit.
Bottom line – the deal looks like a snug fit for an Internet bellwether
walking a high-wire act without a net.
Any questions or comments, love letters or hate mail? As always, feel
free to forward them to kblack@internet.com.
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CMGI Plays the Name Game
