Stadium Names, from The Indicator

Summary

The Economics of Everyday Things: Stadium Names

Podcast: The Indicator from Planet Money
Host: Zachary Crockett
Release Date: November 22, 2024

---

Introduction

In this episode of The Indicator from Planet Money, hosts Adrian Ma and Waylon Wong delve into the intriguing economics behind the naming rights of college sports stadiums. They explore how Florida International University (FIU) secured a unique deal with global music icon Pitbull, analyze the shifting financial landscape of college sports, and discuss the broader implications for universities nationwide.

---

The Unique Stadium Naming Deal: FIU and Pitbull

[02:07] Adrian Ma begins by highlighting the prevalence of corporate-sponsored stadium names across major sports venues, often resulting in cumbersome titles like "MT Bank Stadium" in Baltimore or "PPG Paints Arena" in Pittsburgh.

[03:14] Breaking the mold, FIU opted for a distinctive approach by partnering with renowned musician Pitbull. This deal, valued at $6 million, marks FIU's football stadium as the first in America named after a musician—Pit Bull Stadium.

Notable Quote:
Scott Carr, FIU's Director of Athletics, [07:48]:
"We made history because there's not another college stadium that's named after a musician. If we had named our stadium after that Fortune 500 company, you and I had never met each other and we're probably not doing this interview."

---

Strategic Reasons Behind the Pitbull Partnership

Scott Carr emphasizes that beyond the financial aspects, the primary goal was to generate substantial buzz for FIU. Unlike traditional corporate sponsors, Pitbull brings a unique flair and widespread recognition that transcends typical advertising:

• Media Exposure: An estimated $86 million in media value was garnered within two weeks post-announcement.
• Promotional Support: Pitbull is committed to aiding FIU in fundraising efforts, leveraging his social media presence to enhance the university's visibility.
• Entertainment Value: The deal includes opportunities for Pitbull to host events at the stadium, further intertwining his brand with FIU's athletic endeavors.

[07:03] Pitbull himself remarks on the partnership, highlighting his roots and the innovative nature of the deal:
"Coming from Miami, you got that chip on your shoulder where you're just the underdog of all underdogs, and you're constantly trying to figure out ways on how to do things that nobody's thought of or they thought that it was unbelievable and impossible." [07:03]

---

Economic Shifts in College Sports

The episode sheds light on the evolving financial dynamics within college sports, influenced by recent policy changes:

1. NCAA Rule Changes on Athlete Compensation:
   The NCAA's decision to allow athletes to profit from their name, image, and likeness (NIL) has redirected potential funding away from universities. Donors and sponsors now have the option to support individual athletes directly, diminishing traditional revenue streams for schools.

2. Proposed NCAA Settlement:
   Anticipated changes could require schools to share revenues from ticket sales and sponsorships with student-athletes. This would further strain university budgets, especially for institutions lacking substantial financial reserves.

[05:35] Waylon Wong explains the impact:
"For one thing, a couple of years ago, the main governing body of college sports, the NCAA, got rid of an old rule that prohibited athletes from earning money off their name, image, and likeness. As a result of this change, donors and corporate sponsors, who in the past would have given money directly to a school, can now give money directly to athletes." [05:35]

---

Adapting to Financial Challenges: The Shift to Naming Rights

Faced with declining traditional revenue sources, universities like FIU are turning to innovative solutions to bolster their finances. Leasing naming rights has emerged as a lucrative alternative, providing immediate capital and long-term financial stability.

[10:04] A sports marketing firm, Elevate, estimates that approximately 25% of universities currently have corporate sponsors for their stadiums, with numbers expected to rise due to the increasing financial pressures and the high advertising value of sports venues.

Benefits of Naming Rights Deals:

• Immediate Financial Influx: Significant upfront payments help offset budget shortfalls.
• Enhanced Visibility: Corporate names can attract further sponsorships and partnerships.
• Flexibility and Creativity: Unique partnerships, like that with Pitbull, can create memorable branding opportunities.

---

Broader Implications and Future Trends

The FIU-Pitbull partnership serves as a case study for the potential diversification of naming rights sponsors beyond traditional corporations. This trend could lead to more entertaining and culturally relevant partnerships, enhancing the fan experience and broadening the appeal of college sports venues.

[10:35] Adrian Ma muses on future possibilities, suggesting a continuation of creative sponsorships:
"Who knows if more celebrities will follow in Pitbull's footsteps or foot or paw prints." [10:35]

Host Reflection:
Adrian and Waylon reflect humorously on the challenges of supporting underperforming teams, tying back to the financial motivations behind securing stable and innovative funding sources.

---

Conclusion

This episode illuminates the intricate balance universities must maintain between maintaining competitive athletic programs and navigating the complex financial landscape of modern college sports. FIU's bold move to partner with Pitbull exemplifies how creative sponsorships can provide essential funding while simultaneously elevating a university's brand on a national stage.

---

Notable Quotes Summary

• Scott Carr, FIU's Director of Athletics:
  "We made history because there's not another college stadium that's named after a musician." [07:48]

• Pitbull:
  "Coming from Miami, you got that chip on your shoulder where you're just the underdog of all underdogs..." [07:03]

• Waylon Wong:
  "For one thing, a couple of years ago, the main governing body of college sports, the NCAA, got rid of an old rule..." [05:35]

---

Key Takeaways

• Innovation in Sponsorship: Universities are exploring unconventional partnerships to secure funding amidst changing NCAA regulations.
• Brand Enhancement: Creative naming deals can significantly boost a university's visibility and appeal.
• Economic Pressures: Shifts in athlete compensation and revenue sharing necessitate new financial strategies for collegiate athletic programs.

---

Produced by Angel Carreras, Engineered by Patrick Murray, Fact-Checked by Sierra Juarez. Edited by Cake and Cannon.

Transcript

[US Bank Representative]

At U.S. bank, when we say we're in it with you, we mean it. Not just for the good stuff, the grand openings and celebrations, although those are pretty great. But for all the hard work it took to get there, the fine tuning of goals, the managing of cash and workflows, and decision making, we're in to help you through all of it. Because together we're proving day in and day out that there is nothing as powerful as the power of us. Visit usbank.com to get started today. Equal Housing Lender Member FDIC Copyright 2024 US Bank it's better over here now.

[Adrian Ma]

At T Mobile get four 5G phones.

[Waylon Wong]

On us and four lines for $25.

[Adrian Ma]

A line per month when you switch with eligible trade ins, all on America's largest 5G network.

[Waylon Wong]

Minimum of 4 lines for $25 per line per month with auto pay discount using debit or bank account, $5 more per line without auto pay plus taxes and fees and $10 device connection charge phones via 24 monthly bill credits for well qualified customers. Contact us before canceling entire account to continue bill credits or credit stop and balance on a required finance Agree bill credits end if you pay off devices early. CT mobile.com.

[Zachary]

Hey, it's Zachary. Today we're bringing you an episode of a terrific podcast called the Indicator from Planet Money. It's from npr. Each episode takes a look at one facet of the business or economic world, and it does it in under 10 minutes. Sometimes they give the story behind the news, like how much impact the president really has on the economy. They cover trends too, like which jobs are growing fastest or how weather prediction is getting privatized. And like us, they try to have fun. In this episode of the Indicator, hosts Adrian Ma and Wei Lin Wong explore the economics of college sports stadium naming rights. We hope you enjoy it.

[Scott Carr]

NPR.

[Adrian Ma]

This is the Indicator from Planet Money. I'm Adrienne Ma.

[Waylon Wong]

And I'm Waylon Wong. If you drive by any major sports venue, professional or collegiate, in almost any city, there's a good chance you'll see the name of a bank or a tech company or some other brand that has paid millions of dollars for the right to name that stadium or arena after themselves.

[Adrian Ma]

Yeah, and some of these sponsored stadium names can be more than a little clunky. For example, the Baltimore Ravens play in MT Bank Stadium. I also look this up in Pittsburgh. The Penguins play at PPG Paints Arena.

[Waylon Wong]

I mean, well, in Chicago we have Guaranteed Rate Field. That's where the White Sox play. That's.

[Adrian Ma]

That's bad.

[Waylon Wong]

And people in Chicago had a lot of feelings about it when it was revealed.

[Adrian Ma]

I can imagine. But you know, in the normally bland corporate sounding universe of venue name mashups, here's a venue sponsor that stands out. If you are a practitioner of the krunk or clubbing arts, you might recognize this song as Don't Stop the Party from the rapper and singer Pitbull.

[US Bank Representative]

Don't Stop the Party.

[Adrian Ma]

Recently, Pitbull agreed to pay $6 million to Florida International University for the naming rights to its football stadium. And so this weekend, its football team will play the first game in the newly dubbed Pit Bull Stadium, which appears to be the only one of its kind in America named after a musician.

[Waylon Wong]

Today on the show why FIU struck this unusual name deal and what it tells us about the fast changing economics of college sp.

[Adrian Ma]

Scott Carr is director of athletics at Florida International University, which basically means he's in charge of overseeing the sports teams. But beyond that, Scott sort of sees his job as promoting the university itself.

[Scott Carr]

What we always say in our athletics departments, whether it's at FIU or another one, we're the front porch to the university. We are one of, if not the strongest marketing arm for an institution right now.

[Waylon Wong]

Universities can try and build their reputations through their academic programs. They can buy ads and commercials. But Scott says nothing quite builds a school's brand like sports. And one sport in particular.

[Scott Carr]

If you really want people to know who you are, be great in football.

[Adrian Ma]

Yeah. The only problem with that is that FIU is. How do I put this? Not great at football.

[Waylon Wong]

Oh, no. Really?

[Adrian Ma]

It's extremely not great at football. Yeah. Historically they have lost way more games than they have won.

[Waylon Wong]

And to be fair to fiu, its football program hasn't been around for that long.

[Scott Carr]

For comparison, I've worked at Auburn University and I think they're probably around 130, 140 years of football, something like that. Right. By now we've only been playing football for 22 years, which means that we haven't had some of the success that some of these other schools have had.

[Adrian Ma]

So how does a school football team get better then? Well, of course it has to attract better players. And how does it do that? Well, the simple answer is money. A school with more money can hire better coaches and give out more scholarships. It can build a bigger stadium and nicer training facilities. But that money has got to come from somewhere. And finding it has become more complicated in recent months as schools deal with some radical shifts in the economics of college sports.

[Waylon Wong]

For one thing, a couple of years ago, the main governing body of college sports, the ncaa, got rid of an old rule that prohibited athletes from earning money off their name, image and likeness. As a result of this change, donors and corporate sponsors, who in the past would have given money directly to a school, can now give money directly to athletes. So schools that are losing that revenue have to make it up elsewhere.

[Adrian Ma]

Compounding this issue is a second major shift expected to happen next year in a proposed settlement in a lawsuit involving the ncaa. Schools may soon be able to start sharing revenue from things like ticket sales and sponsorships with student athletes, and they may have to if they want to attract the best.

[Scott Carr]

We do want to be able to participate at whatever level that we can. So you think about that and you say, okay, well, you know, we need to increase the revenues that we have because that's a new expense, if you will. Right. That's a new expense that wasn't there five years ago.

[Waylon Wong]

The hunt for new revenue led Scott and his colleagues to do what more and more schools have done in recent years, which is lease out the naming rights to their sports facilities. And If I use case, this is a 20,000 seat football stadium. And that is when they approached a man named armando Christian Perez, aka Mr. Worldwide, aka Pitbull. And Pitbull agreed to pay FIU $6 million to have his name on the stadium for five years.

[Pitbull]

Well, first of all, you know, we got to get it going.

[Waylon Wong]

Yeah. Here he is talking about the deal on espn.

[Pitbull]

You know, coming from Miami, you got that chip on your shoulder where you're just the underdog of all underdogs, and you're constantly trying to figure out ways on how to do things that nobody's thought of or they thought that it was unbelievable and impossible. So to be able to pull something like this off, I want to say thank you to fiu.

[Adrian Ma]

Yeet. Do you think I'm doing that right?

[Waylon Wong]

Pitbull, is that you?

[Adrian Ma]

No, it's me.

[Waylon Wong]

I thought he was in the booth with us.

[Adrian Ma]

No, well, it's me. I was just doing an impression of Pitbull.

[Waylon Wong]

Yeah, I can't tell you two apart. Yeah. Now, Pitbull is obviously a celebrity and a successful musician. I'm not saying you're not, Adrian, but why didn't FIU do a name deal with, let's say, a bank or a tech company or a Fortune 500 company with super duper deep pockets? Scott says it was about generating buzz.

[Scott Carr]

We made history because there's not another college stadium that's Named after a musician. If we had named our stadium after that Fortune 500 company, you and I had never met each other and we're probably not doing this interview.

[Waylon Wong]

Scott says he got a company to estimate the amount of media exposure the school has gotten in the two weeks after they announced this pit bull stadium deal. And he says it was estimated to be worth around 86 million dol. So I guess we're kind of a part of this too.

[Adrian Ma]

Yes, I think bait, set and hook. That is us.

[Waylon Wong]

Well, you know, it's like this Pitbull angle is catnip for us. How can we resist? It really works.

[Adrian Ma]

We got suckered.

[Waylon Wong]

So forming this partnership with Pitbull appears to be already paying off for fiu. And there's more to it. As part of the deal, Pitbull will help the school with fundraising, promote the school on social media, and even write a special Pitbull stadium song.

[Adrian Ma]

I think this is sounding like a pretty good deal for FIU so far. But even so, you know, there are so many entertainers in Miami that we just had to ask Scott, what other celebrities did you consider?

[Scott Carr]

Sure, I'm going to plead the fifth on that. Right on. Who was on our list. Right. But Armando pit bull was at the top.

[Waylon Wong]

I love how he says Armando Pitbull. That's so cute. We should say, lest we give the impression this is a philanthropic endeavor for Pitbull, that it is also a multidimensional money making opportunity for him. On top of having his name on the stadium, he has the right to sell on field advertising space. Pitbull also owns a vodka brand which will be sold in the stadium. And maybe the biggest deal of all, 10 days a year he gets to use the stadium rent free. So he could throw a concert. He could lease it out. He could like throw a children's birthday party and offer pony rides.

[Adrian Ma]

That would be an epic, epic kid's birthday party.

[Waylon Wong]

Can you imagine? You could have like a ferris wheel in there. You could have sword swallows. I guess I'm just describing a circus. I'm describing a circus.

[Adrian Ma]

This sounds like you're pitching Pitbull right now.

[Waylon Wong]

Yeah. Can you get Scott to give me his number after this?

[Adrian Ma]

You know, looking forward, who knows if more celebrities will follow in Pitbull's footsteps or foot or paw prints. What does seem likely is more schools will be looking for naming rights deal like FIU did. For this story, we spoke to a sports marketing firm called Elevate and They estimate about 25% of universities have a corporate sponsor on their stadium, and they think it's likely to increase thanks to the changing economics of college sports and the fact that these venues are just prime advertising real estate.

[Waylon Wong]

Even when a team is only so.

[Adrian Ma]

So, Waylon, you haven't lived until you have cheered for a losing football team.

[Waylon Wong]

All I'm saying I went to Northwestern, the doormat of the Big Ten.

[Adrian Ma]

This episode was produced by Angel Carreras and engineered by Patrick Murray. It was fact checked by Sierra Juarez. Cake and Cannon edits the show and the Indicator is a production of N.

[Zachary]

Thanks again to NPR for sharing an episode of the Indicator from Planet Money. You can find more episodes of the Indicator wherever you get your podcasts. Five days a week, always less than 10 minutes. We'll be back in a few days with a new episode of the Economics of Everyday Things.

[Waylon Wong]

The Freakonomics Radio Network the Hidden side of Everything Stitcher.

[Pitbull]

A.

[Waylon Wong]

Touch of formaldehyde, a pinch of acetaldehyde, a splash of acrolein makes the perfectly evil vape cloud.

Vaping can expose you to a toxic mix of chemicals. Know the real cost of vapes brought to you by the fda, Stripe helps.

[NPR Representative]

Many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn [e-mail] what's your go to drink before a flight? A West Coast IPA or Manhattan? Find the detail that moves you with local beer and craft cocktails at the.

[Adrian Ma]

Chase Sapphire Lounge by the Club. Learn [e-mail] Sapphire Reserve cards issued by JP Morgan Chase Bank NA Member FDSE Subject to credit approval.