December 2008 – DAILY BUSINESS REVIEW
When U.S. Century Bank officially lends its name to Florida International University’s arena at a Jan. 7 dedication ceremony, it will become the third South Florida community bank to put its name on a prominent sports facility — joining the BankAtlantic Center in Sunrise and the BankUnited Center at the University of Miami.
As anyone who has ever taken in a game at the Fleet Center (now TD Banknorth Garden) in Boston, Comerica Park in Detroit, Bank of America Stadium in Charlotte and Chase Field (formerly Bank One Ballpark) in Phoenix knows, sports facility naming rights have long been a favorite branding strategy for larger banks. But regional players and even small community banks like U.S. Century are finding they can reap the same benefits.
“The reason you want to take naming rights, whether you’re a bank or whatever, is for pure brand recognition,” said Tadd Schwartz, principal of Schwartz Media Strategies, a Miami-based public relations and marketing firm. “You want to stay top of mind with your target audience. You’re not asking a consumer for a call to action, to buy your product.”
Schwartz has no affiliation with U.S. Century or FIU.
When it comes to banking, the strategy is not without its deep psychology.
“Consumers … are looking for security, they’re looking for stability, they’re looking for the best rates and the best fees,” Schwartz said. When a bank puts its name on a formidable edifice, “you’re showing strength, you’re showing size, you’re showing stability, you’re really hammering home those messages.”
That’s exactly what a bank should be showing, especially during a recession, Schwartz added.
U.S. Century chief executive Octavio Hernandez said the bank has long maintained a close relationship with FIU, noting that he is not only an alumnus but also part of its first graduating class.
“It’s only fitting that U.S. Century Bank support the university since many of our employees are either graduates or are pursuing degrees at FIU,” he said.
It’s a relationship that can pay dividends well beyond having a giant billboard on a public facility, said Marcos Kerbel, a consultant and retired bank executive who teaches at the university. It can also bring a steady pool of not just customers, but talent, into the bank.
“Over the years I’ve had employees and officers who have been students of mine,” Kerbel said. “Their pool of senior officers and trainees will come from a major global and research university.”
The bank did not disclose the cost of putting its name on the arena, but FIU spokesman Jean-Paul Renaud said the university asks a minimum of $1 million over five years. Proceeds will go to the university’s athletic department. The facility previously carried the name Pharmed Arena after that company made a $1 million donation to FIU athletics in 2004.
While the newly christened U.S. Century Bank Arena, a 6,000-seat venue built in 1986, will never be mistaken for Madison Square Garden, it does see a steady stream of local traffic attending not just basketball and volleyball games, but some of the university’s most important political, cultural, athletic and academic events. Even dignitaries such as the Dalai Lama have visited.
Most FIU students begin and end their college careers there: freshmen convocation and graduation take place at the arena. Thousands of high school students also celebrate their graduations at the U.S. Century Bank Arena each spring.
BankAtlantic in 2005 signed on for 10 years to put its name on the Florida Panthers’ home in Sunrise, a deal that expires in 2015, with the option for a 10-year extension. The amount of the deal was not disclosed, but Office Depot, whose name preceded BankAtlantic on the arena, was paying a reported $1.4 million a year. The facility, which seats 20,763 for concerts and 19,250 for hockey, also previously bore the name of National Car Rental.
BankUnited put its name on what was then known as the Convocation Center, the University of Miami’s 7,000-seat facility, in 2005 in a 10-year agreement.
“We recruit from UM’s pool of alumni and recent graduates, so this arrangement has sentimental significance for many of our bankers,” then-BankUnited president and UM law school alum Alfred Camner said.
Schwartz said a bank like JPMorgan Chase, whose recent purchase of Washington Mutual has suddenly given it a large presence in South Florida, could do worse than branding a facility here.
“Chase is the prime candidate for a bank that should come into South Florida and really make an impact, essentially put a stake in the ground by taking naming rights on whatever large institution they can find, whether it be a football stadium, or an office tower, or what not,” Schwartz said. “From a branding standpoint, that move for Chase would be ideal.”
Beyond simple community relations and consumer psychology, purchasing naming rights can be part of a competitive strategy as well, especially for strong banks seeking further leverage against struggling rivals.
“While our competitors are being slaughtered, here we are beating our chests,” Schwartz said. “By making a power play on the advertising side, they’re taking advantage of their competitors’ weakness.”
For all the positives, as anyone who remembers Houston’s Enron Field knows, branding can sometimes back-fire and cause embarrassment.
Several other facility sponsors have gone belly-up, as happened to one-time Dolphin Stadium sponsor ProPlayer.
As BankUnited deals with its efforts to survive the sub-prime mortgage debacle and resulting recession, its future as an arena sponsor could be shaky.
“Sometimes you can have an association with a sponsor that has a problem, and what happens then?” said Ken Thomas, an independent banking consultant based in Miami. “Enron Field is just one example of that.”
But it’s a good source of income for a stadium and university and “if I’m a big Hurricane fan and I want tickets to see basketball, maybe I go deal with BankUnited because they’ll hook me up with some good seats,” Thomas said. “You can be sure they have a lot of good box seats and to their best customers, they’ll give them to them.”