Posted by John Vrooman on Saturday, June 23, 2018 in Major League Baseball.

Interview with Tampa Bay Times.

How much (estimate) could the Rays get for the naming rights of a new ballpark in Tampa?

The current going rate for naming rights for MLB Parks in a Tampa sized market is probably in the $8 million to $10 million annual range for a 25-year to 30-year term, and that rate increases at about 6 percent per season. Depending on the breadth of the stadium sponsorship deal, the resulting cash flow would have a present value of about $75 million to $95 million for the Rays. (PV (10%, 30) is the relevant amount to compare to up front private stadium funding costs).

The older Chase and Comerica Bank deals in Phoenix and Detroit (2000) were both about $2.2 million per season for 30 years, and the more recent Atlanta Braves deal with SunTrust Bank is about $10 million for 25 years.

What strategies does a team use when trying to attract a sponsor?

As naming rights sponsorships have evolved the successful venue sponsors are usually native, home-grown businesses from the financial services (banking) and public utility sectors. About one-fourth of all major sports venues are currently sponsored by banks (MLB 7/30, NFL 6/32, NBA 7/30, NHL 10/31).

What are some of the recent successes and failures?

After an early epidemic of venue identity crises and the instability of sudden and repeated name changes from sponsor bankruptcies and mergers from high-risk tech companies, the name-game players have since settled into a more stable and financially conservative support group.

The most successful match would probably be the natural pairing of SunTrust Bank with the Atlanta Braves (2017) in Cobb County. The least successful was probably the overnight Enron Field affair with the Houston Astros in 2000 that ended in a messy divorce with the Astros buying out the scandalized energy company after one season.

What are the pitfalls for the Rays in this area?

This match game is not rocket science. The Rays will seek a community-unifying sponsorship partner with financial stability and firmly established long-run home-grown goodwill. If the stadium sponsorship offer seems too good to be true, then it probably is.

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By “present value,” do you mean that is the amount the Rays could bond with the annual payments for naming rights?

Yes that is one way to look at it. Projected future cash flow over the term of the deal has an equivalent present value now. Capital investment decisions compare the initial project cost outlay upfront to the present value of the future cash flow over the life of the project.

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How much of a win would a new naming rights deal be for the Rays bearing in mind they have the $1 million per year deal with Tropicana?

That would probably move the package price of a separate new deal toward the lower end of the spectrum…prob $7 million to $8 million.