Title : How the Optus naming rights deal for Perth Stadium stacks up
link : How the Optus naming rights deal for Perth Stadium stacks up
How the Optus naming rights deal for Perth Stadium stacks up
With telecommunications giant Optus securing the naming rights for the soon-to-be-completed Perth Stadium, the WA Government has guaranteed itself an estimated $50 million in revenue over the next 10 years.
The return for the Optus Stadium moniker seems like a drop in the ocean, considering the $1.6 billion cost of building the stadium.
In fact, it is about 3.25 per cent of the total cost of the ground.
Public backlash has been swift on social media and from the Opposition, with calls for the 'Perth' aspect of the name to be retained in line with the likes of the Melbourne Cricket Ground, Sydney Cricket Ground and Adelaide Oval — venues synonymous with their home cities.
"Yes, there will be some money in the short term, but it is this small-minded pedestrian thinking," former premier Colin Barnett said.
"Anyone who travels knows that you don't go to England, you go to London. You don't go to the United States, you go to LA or New York, or in Europe, Paris.
"Perth is the brand that we need to promote and this is giving up that brand and the value it needs."
But the Government is standing its ground, saying selling the naming rights in a deal which did not stipulate that the word Perth needed be included was necessary to increase the value of the agreement.
"There's a lot of things in the world we'd like, but unfortunately we have to sell the naming rights to be able to balance some of the budget," Sports Minister Mick Murray said.
"That'll go back into hospitals, that'll go back into sport even."
A drop in the ocean of state debt
Western Australia's debt is forecast to hit $42 billion by 2020, so the argument could be made that every dollar helps in stopping that figure spiralling out of control.
But while $50 million is a lot of money, it will barely make a dent in the state's debt — it's about 0.125 per cent of the total.
And where that money will be spent is unclear.
"The Treasurer said it's going straight into his coffers, so the Treasurer is very adamant that it should go to general revenue," Mr Murray said.
So now that the deal is done, just how does it compare to other naming rights deals around the country?
Comparing Australian stadiums
The most expensive naming rights in the country belong to the Docklands ground, where Etihad Airways pays between $5 and $8 million a year. That is roughly on par with what Optus are reportedly paying for the naming rights to Perth Stadium.
| Stadium | Annual cost of naming rights deal |
|---|---|
| Subiaco Oval (Patersons) | $875,000 |
| Melbourne Rectangular Stadium (AAMI) | $1,250,000 |
| Sydney Football Stadium (Allianz) | $3,000,000 |
| Stadium Australia (ANZ) | $4,500,000 |
| Perth Stadium (Optus) | $5,000,000 |
| Docklands (Etihad) | $5,000,000 |
Stadium Australia becomes the third most expensive ground for naming rights — ANZ secured its deal in 2008 for about $31.5 million over seven years.
That equates to $4.5 million per year, and was extended in 2014 until the end of this year.
Another insurance giant, AAMI, took naming ownership of the Melbourne Rectangular Stadium — home of the Melbourne Storm, Melbourne Victory and Melbourne Rebels — in 2010, paying an estimated $10 million over eight years, or about $1.25 million per year.
Perth's previous home of football, Subiaco Oval, has had two names in recent years.
Patersons Securities secured the initial naming rights when it paid $3.5 million over four years, or $875,000 per year, before the Fairfax-owned Domain real estate service took over in 2015.
A good deal locally, but not quite big league
So in comparison with other grounds in Australia, the deal for Perth Stadium appears to be a good one for the State Government, returning a substantial amount of money to the cash-strapped state at a rate equivalent to other venues.
But it pales in comparison to grounds in the United States, which often service just one team from one sporting code, albeit to a worldwide audience.
According to Forbes, insurer Metlife is paying $US450 million over 25 years for the naming rights at the home ground of the NFL's New York Giants and New York Jets.
That is a staggering $US18 million ($23.5 million) per year, dwarfing even the combined revenues for the five above listed grounds.
The 18,000-seat Phillips Arena — home of the Atlanta Hawks in the NBA — has the 13th largest naming rights deal in the US.
At $US185 million over 20 years, it equates to $9.25 million per year, substantially larger than any ground in Australia.
But even those staggering amounts of money are dwarfed by the monstrous deal signed by Manchester City Football Club in 2011, with airline Etihad again splashing out.
It was reported in The Guardian in 2011 that the airline would pay $600 million over 10 years — a mind-blowing $68 million per year.
Back home, for purists who believe Perth should be in the name, there is a small silver lining.
All international cricket matches at the venue will use the Perth Stadium moniker because of Cricket Australia's contractual obligations, which prevent stadium names being used.
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