To support our ever-growing body of expertise in this area, our firm conducted a national survey in February this year to get an overall snapshot of Naming Rights activities and practices among Canadian Municipalities. This and other information collected through the survey will be discussed in greater detail at the 3rd Annual Municipal Forum on Sponsorship on November 7, 2013 at the Grand Hotel and Suites in Toronto. Here are some key findings from the survey:
Survey Respondents Overview
A total of 41 Surveys were completed. Responding municipalities included those from Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island and Saskatchewan. Ontario had the highest representation at 21 responses, with 65% from larger municipalities (over 100,000) and 35% from smaller jurisdictions. The responses were roughly split between larger and smaller municipalities.
- 63.4% are currently actively involved in seeking Naming Rights sponsors
- 66.7% of respondents that are not currently actively seeking Naming Rights sponsors are considering it in the future. 26.7% were “not sure”.
Types of Facilities
Naming Rights are applied to a wide range of facilities including: Arenas, Banquet Halls, Bocce Courts, Ball Diamonds, Childcare Facilities, Community Rooms, Convention Centres, Dressing Rooms, Fitness Centres, Libraries, Meeting Rooms, Pools, Recreation Complexes, Soccer Fields, Skateboard Parks, Skating Rinks, Sports Field and Theatres.
Naming Rights Terms
- The most common term for Naming Rights agreements is “In Perpetuity” (37.7%), with the next highest term at 10 years (24.4%) and the third highest at 5 years (15.5%).
- 66.7% of respondents feel that the ideal term for Naming Rights agreements is 10 years; with 14.3% indicating 5 years and 20 years.
Naming Rights Policies
- 71.4% currently have a Naming Rights Policy.
Use of Internal Staff / External Contractors
- 66.7% of municipalities use Internal Staff to market and sell their Naming Rights opportunities.
Of the 33.3% that use External Contractors:
- 60% use a combination of Retainer and Commission to compensate contractors
- 40% use straight Commission
- the most common Commission Rates are 10% and 20% (both at 40% of respondents)
- 88.2% report that Council Members are involved in the Naming Rights process; either by referring potential Naming Rights prospects, attending meetings with prospects and/or approving Naming Rights agreements.
The money received through Naming Rights is allocated in a number of ways:
- 17.6 allocate the money to a General Revenue Account
- 41.2% use the money to Improve/Enhance the facility
- 41.2% use a combination of Revenue Account and Facility Enhancements
This survey confirmed our ongoing research that sponsorship revenue development is gradually being integrated into municipal operations as municipalities grapple with the challenges of “doing more for less”. The Municipal Forum on Sponsorship will address many of the issues faced by municipalities as they consider their approach and options and will give attendees a chance to speak to other municipalities from across Canada who are facing the same challenges.