Introducing . . . the Garden?
Renaming agreement isn't unalloyed victory for owner of arena or TD Banknorth
They rolled out the nostalgic videos with cheering fans and Celtics victories. ''Today the Garden lives," said Richard Krezwick, the FleetCenter's president and chief executive, as he unveiled plans yesterday to rename the arena the TD Banknorth Garden. ''It really is a great day."
The naming-rights deal marked a clear victory for sports fans, or at least those who remember the now-demolished Boston Garden that preceded the FleetCenter. But for the deal's two participants, TD Banknorth and the arena's owner, Delaware North Cos., the agreement's benefits come with some caveats.
TD Banknorth, after spending about $6 million a year to rename the arena, may find that Bostonians will call the arena ''the Garden," dropping any reference to the bank. Meanwhile, Delaware North has signed one of the most lucrative naming-rights deals in hockey and basketball after being locked into one of the cheapest, but the windfall comes at a time when the company is losing millions of dollars because of the cancellation of the National Hockey League season.
Delaware North may make as much as $23 million more over the next five years than it would have if
Delaware North then turned around and sold the naming rights to TD Banknorth in a deal valued at about $6 million a year, or three times Fleet's original price.
The financial terms of the 20-year TD Banknorth deal were not disclosed in a news conference yesterday, but executives briefed on the negotiations have put the deal's value at $6 million per year. A Delaware North executive, Charlie Jacobs, declined to discuss the specific amount that the company will make from the new deal but said Delaware North will invest much of it in improving the building. Delaware North executives said they are planning $8 million in upgrades, though they did not give many specifics.
''I think you'll see some brilliant changes in this building," Jacobs said.
TD Banknorth has agreed to give $5 million to the arena's charitable foundation and the Boston Bruins foundation.
For TD Banknorth, the arena deal also comes at an opportune moment. Banknorth sold a majority stake in its operations this week to Canada's TD Bank Financial Group, which is expected to give the Maine bank the backing to expand rapidly in the Northeast. Banknorth changed its name to TD Banknorth, and it plans to rebrand all its branches -- which operate under names ranging from
TD Banknorth's chief executive, William J. Ryan, said yesterday bringing back the Garden name was a priority for his bank.
''What we really wanted to do was to bring the Garden back," said Ryan, who spent an earlier part of his career working for Bank of New England in Massachusetts. ''I never really liked the word 'center.' It didn't mean much to me . . . It's an absolute thrill to be part of this as we look out over the next 20 years."
The price of the deal is among the highest in naming rights for basketball and hockey arenas, behind the $9.3 million a year paid to name Atlanta's Philips Arena and $6.5 million a year to the American Airlines Center in Dallas.
Still, it is unclear how much name recognition TD Banknorth ultimately will get from the deal. Most Bostonians will drop the ''TD Banknorth" part from casual conversation and call it the Garden instead, said Andrew Zimbalist, an economics professor at Smith College in Northampton who studies sports.
''If you have to call something the TD Banknorth Garden, it doesn't flow off of your tongue very readily," he said. ''It's going to be called the Garden and, thereby, they lose some of the potential value."
But the full TD Banknorth Garden name will appear in arena signs overlooking the highway and exposure on national television broadcasts of games. That could increase the bank's name recognition, even if Bostonians never use its full name in casual conversation, said Ron Lawner, chairman and chief creative officer of advertising agency Arnold Worldwide. Arnold handles the advertising for Citizens Financial Group, a TD Banknorth rival.
''It gets them a lot of exposure, and they become part of the community in a quick way," he said. ''This jump-starts their awareness in the area."
In the last several years, naming-rights deals have moved away from pure brand recognition and into more of a promotions model. In the industry, executives refer to it as ''activating" the sponsorship.
TD Banknorth, following this idea, plans a series of events, advertisements, and promotions around the new name, including a radio and television ad campaign with Delaware North to reintroduce the Garden name.
The bank plans to give away 10,000 tickets to events each year through partnerships with local organizations.
TD Banknorth also will get many of the usual perks of a naming-rights deal, including game tickets and signs around the arena and on the outside. The new name officially takes effect July 1.
Sasha Talcott can be reached at email@example.com.