Araneta Coliseum, now Smart Araneta

It’s not been officially announced but it’s all over the papers, television and all forms of media: the fabled Araneta Coliseum will be known as the SMART Araneta Coliseum at least for five years starting, this Saturday, July 23 when the biggest professional basketball extravaganza, the Ultimate All-Star Weekend, kicks off at the Big Dome.

The renaming of Araneta Coliseum into the SMART Araneta Coliseum is known in sports business parlance as a “naming rights deal”.

Naming rights are essentially financial deals that allow a corporation (in this case, SMART) or for-profit entities to attach its name to a public assembly facility, usually a sports stadium, for a period of time ranging from three to 20 years. By entering into a naming rights deal, SMART gets a property to promote its products and services, strengthen brand reputation and goodwill, enhance name recall and several other benefits (without the headache of running the stadium) that ultimately should lead to increased market share and profits.

For Araneta Coliseum, the naming rights transaction will increase its capacity to make available the Big Dome to as many activities as possible thus rendering public service to the community. It is also a response to the competition offered by other property developers who have chosen to invade the public assembly facility business.

Reliable sources within Araneta state that the partnership with SMART will provide the Big Dome with resources over the next five years (the term of the naming rights deal which is renewable for a similar period at the option of the two parties) to upgrade the venue that hosted the Flash Elorde-Harold Gomes world junior lightweight title fight in March 1960, among many other historic events. The last time the Coliseum underwent major renovation was in 1998-1999.

The first priority of the Araneta management is to improve access to the upper box and general admission by installing the most modern and efficient escalators. A 2000-car parking lot will also be constructed as an added convenience to spectators.

To be sure, this is not the first time that the Araneta Group of Companies has entertained the idea of entering into a naming rights deal with commercial enterprises. Late in 1998, the Group came very close to completing a naming rights transaction with Shell Philippines.

During our discussions with Shell around the third quarter of 1998, when we were associated with the Araneta Group of Companies, the oil company had already agreed to the terms and conditions of a 10-year naming rights deal. We spent many hours with then Shell executives Oscar Reyes and Rey Gamboa to craft a mutually beneficial agreement. Shell had even sent structural engineers to the Coliseum to certify to the structural integrity of the edifice. Shell Philippines had already secured the approval of head office to enter into a deal which was the first ever naming rights transaction in the long history of the oil multinational.

What however turned out to be the deal breaker was the name to be given to the Coliseum. Under the agreement with Shell, the Araneta Coliseum would have been named “Shell Coliseum at the Araneta Center”. The removal of the family name “Araneta” from Araneta Coliseum did not meet with favor from some parties. It was felt that to remove Araneta from Araneta Coliseum was a disservice to the grand patriarch of the Araneta clan, the late Amado Araneta. He had labored hard over the years to develop the Araneta Center, with the Coliseum as the anchor project. In addition, it was believed that Araneta Coliseum had achieved its own brand equity and had the goodwill of the market.

To salvage the deal, both parties agreed to a simple signage contract that had Shell having its logo and the word “Shell” on both sides of the hard court near the centerline. For a while, even this agreement was up in the air as it was greeted by objections from Shell’s rival teams in the PBA who had felt that Shell gained an undue advantage in terms of exposure over the other teams.

According to Peter J. Nash in “Boston’s Royal Rooters”, stadium naming rights in North America may have begun in 1912 with the opening of the Fenway Park in Boston. The stadium’s owner had owned a realty company called “Fenway Realty” and it was clear that the owner wanted to maximize promotional value.  

 Wolf D. Barnet says the record for the highest amount paid for naming rights belongs to Citi Field (opened in 2009) and Barclays Center, both located in New York City. Barnet states that each of the two deals amounted to US$20 million per year for at least 20 years, totaling $400 million (about P16.8 billion).

This deal between SMART and the Araneta Group will certainly redound to the benefit of the public.