City Organizes Aggressive Program to Negotiate Sponsorship Deals

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LOS ANGELES ( -- Facing a projected budget shortfall of $250 million, Los Angeles is following New York and joining the growing list of cities seeking cash from marketers and
Photo: Steve Marcus
Las Vegas' lucrative 12-year pact with Nextel for the city's new monorail is one of several municipal sponsorship deals that have inspired Los Angeles to throw its own hat into the ring. The California city is now exploring its large-scale municipal assets to identify those that have high sponsorship potential. Click for larger photo.

merchandise. The City of Angels is exploring the sale of everything from "official water" rights to LAPD gadgets and gear.

'Get the ball rolling'
"We're just starting to get the ball rolling," said city Councilman Eric Garcetti. "We're not going to sell of L.A. to every bidder. We'll always look at what the public's threshold is for the things we consider."

Los Angeles Mayor James Hahn supports the idea. The city may contract with a marketing professional or could hire someone to lead the charge, Mr. Garcetti said.

A graduate class at the University of Southern California is gathering information on how other cities have structured sponsorships. Their finished report is expected by the end of the semester.

Las Vegas deal
Municipal sponsorships have become increasingly common, from the 12-year-pact with Nextel Communications to sponsor the Las Vegas monorail to New York's controversial $100 million agreement with Snapple Beverage Co. Criticism of those deals has increased with the marketing activity.

Ralph Nader, presidential candidate and longtime gadfly on consumer issues, criticized what he called the commercial mentality that sees ads slapped in places he believes they shouldn't be, such as schools and government institutions. "Mayor [Michael] Bloomberg started it, selling New York," he said. "I think there is going to be a backlash."

Joseph Perello, chief marketing officer for New York, who brokered the Snapple deal, did not return calls for comment.

Viacom bus shelters
Los Angeles' one alliance already in place, with Viacom, is for bus shelters and other outdoor "furniture." The 20-year pact was approved a year-and-a-half ago, and the money from it goes for sidewalk repairs, graffiti cleanup and street work, Mr. Garcetti said.

In informal polls he's taken, residents said they favor branded deals if it improves the quality of life. Mr. Garcetti envisions more police officers on the street, better recreational facilities and other amenities from marketer cash.

Municipal marketing is beginning to spread from the soft-drink marketers that first stepped up to auto manufacturers, wireless communications and financial services, said William Chipps, senior editor of the IEG Sponsorship Report. "Cities are getting more sophisticated about what they're offering up for sponsorships," Mr. Chipps said. "And we're seeing interest from so many different sectors -- parks departments, transportation agencies. Everybody's strapped for cash."

Budget woes
Cities in California, because of their budget woes, have been at the forefront of sponsorship deals. San Diego has made a number of multiyear deals with companies such as Verizon Wireless, PepsiCo and General Motors Corp. The GM pact puts lifeguards and beach emergency workers in Tahoes, Trailblazers, S-10 Pickups and other vehicles.

First up in the marketing cycle for L.A. would be the city's 400-plus vending machines. The Los Angeles Police Department, under former New York chief Bill Bratton, has also been exploring branded merchandise.

Any city that's going down the sponsorship road has to be aware of the potential for criticism, Mr. Chipps said. "The big argument is governments are selling out," he said. "They have to be very selective about what venues they sell and to whom. They can't sell City Hall."

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Claire Atkinson contributed to this report.

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