Moda Health has signed a 10-year, $40 million naming rights deal for the arena formerly known as the Rose Garden. If publicity was Moda's goal, the signing was a huge success.
Arguably, few people knew Moda Health was the new name for ODS Health Plans before the deal with Paul Allen and the Trail Blazers was announced last week. Building brand identity is often a bedrock rationale for sticking your company name on a high-profile sports venue.
But with this widening awareness also came what an Oregonian reporter called "toxic remarks" on social media sites and in letters to the editor as critics questioned the economic justification of spending $40 million for naming rights when health insurance premiums continue to rise and coverage remains unattainable for many Americans.
As with most deals of this type, the details tell a more complex story. For example, part of the agreement calls for Moda to provide health insurance to Allen's sprawling sports franchise, including the Seattle Seahawks and Sounders. Even that inspired one wag to question the wisdom of covering teams with players such as Greg Oden who spent untold sums on three micro-fracture knee surgeries.
Moda Health members may benefit by receiving early or preferred access to events held at the Rose Garden, er, Moda Center. And there may be joint opportunities with the Trail Blazers to promote healthy eating, though perhaps not at the arena's concession booths.
Moda Health CEO Robert Gootee said, "The naming of the building is really incidental. We wouldn't have paid to put our name on the side of the arena." Hopefully Gootee will keep that in mind when many, possibly most, Portlanders continue to call it the Rose Garden. Or the Yoda Center.
Sports business experts explained it is easier and often more valuable to sell naming rights to a new venue, rather than an existing one. They said the new home of the Brooklyn Nets is widely accepted as the Barclays Center, whereas the good fans in San Francisco never stopped calling their ballpark Candlestick after it became 3Com Park and, later, Monster Park.
The art and economics of naming rights to sports venues highlights the usually less expensive, but still variable, value of sponsorships in general. Many sponsorships pivot on cause-marketing campaigns to associate a business with a worthy charity. But the company and cause don't always strike the public as a good marriage — think about the partnership between Wal-Mart and Mercy Corps.
There are ups and downs to putting your name in lights. Smart company officials look beyond the marketing opportunities to assess the real impact on their reputation that is conveyed by the message of sponsorship.