Levi Strauss & Co. and the NFL's San Francisco 49ers have announced a $220 million, 20-year deal to call the team's planned new home "Levi's Stadium."
Naming rights deals for sports stadiums and arenas have gotten well-deserved scrutiny as marketing boondoggles -- especially in tough economic times -- but sports-marketing experts said that, given the brands involved, the partnership stands a good chance of succeeding.
Under the deal proposed by Levi's and the 49ers to the Santa Clara Stadium Authority Wednesday, Levi's would splash its brand across the exterior and interior of the stadium. The jeans marketer would also become an official sponsor of the five-time Super Bowl champion 49ers, who lost Super Bowl XLVII to the Baltimore Ravens. Once the modern facility is up and running, it would try to land a Super Bowl as did MetLife, which will host Super Bowl XLVIII next February.
"It's a non-traditional deal. You don't see many apparel companies with their names on stadiums and arenas," said Jim Andrews, senior VP-IEG. "But it does a couple of things for Levi's. They're a heritage brand -- and part of that heritage is being from San Francisco. This plays that up big time. Also, this stadium will be extremely high tech and it will be in Silicon Valley. So it will enable Levi's to associate their brand with something very cool, very hip, in the future."
Many stadium naming rights deals have gone wrong over the years. Just look at the checkered naming rights history of the 49ers' longtime home at Candlestick Park, which had been officially named "3Com Park" and "Monster Park" as the result of two separate deals. But fans continued to call it by the Candlestick moniker even before the name officially reverted back after those deal lapsed.
But Levi's is a more natural fit than a dot-com or company that made expensive cables. Both Levi's and the 49ers are Bay Area icons.
"Levi's Stadium will connect two iconic Bay Area brands that share similar values, a rich heritage and a pioneering spirit," said Chip Bergh, CEO of Levi Strauss & Co. in a statement.
Levi Strauss has been in business since 1873. So the 49ers and NFL likely don't have to worry about their naming rights sponsor going bankrupt after a denim bubble pops. That's a big concern when it comes to these deals. It doesn't matter how much a sponsor promises a team if the team can't collect the money.
Just ask the Houston Astros. The Major League Baseball club was caught in a marketing nightmare with "Enron Field," when the Astros couldn't collect the money promised from the scandal-plagued energy company. Coca-Cola's Minute Maid later took over naming rights for a song.
Or the NFL's Ravens who had to remove "PSINet Stadium" from their home after PSINet went belly-up. The home of the reigning Super Bowl champions is now called "M&T Bank Stadium."
But sports marketing expert Bob Dorfman said he was "surprised" a Silicon Valley tech company didn't nab the 49ers deal.
"One reason [the 49ers] are leaving San Francisco for Santa Clara is to attract the high-tech business down there," said Mr. Dorfman, the creative director of Baker Street Advertising in San Francisco. "I just assumed they wanted to sign a sponsor based in Silicon Valley, not San Francisco, for the naming rights."