U.S. Cities Haven't Given Up on Selling Naming Rights for Transit Stations
Back in 2012, we named “selling naming rights to transit stations” an urban trend we hoped would die in 2013. It’s now 2014 and transit authorities across the U.S. are far from abandoning the idea.
A few weeks ago, Boston put out a call for companies interested in purchasing five-year naming rights contracts to nine MBTA stations and three rapid transit lines. Asking prices for most of the stations start at $1 million per year. As for transit lines, the Green Line is the most expensive at $2 million per year. Proposals will be accepted until February 27.
And Boston is not alone in this. Chicago, Philadelphia, New York City, and San Diego have all pursued naming rights programs as a source of non-fare revenue. Yet aside from a very small number of successful deals — notably Barclays Center station in Brooklyn, AT&T station in Philadelphia, and Cleveland’s HealthLine BRT — naming rights programs have ended up as largely wishful thinking for most U.S. cities.
Clockwise from top-right: AT&T Station in Philadelphia (Google Maps), Atlantic Ave./Barclays Center Station in Brooklyn (drpavloff/Flickr), Cleveland Regional Transit Authority's HealthLine BRT (wileypoon/Flickr)
According to Scott Galloway, a marketing professor at the NYU Stern School of Business, naming rights for big city infrastructure is actually not a bad sell. It comes with the guarantee that millions of people will see the brand on a more permanent basis. Galloway says his gut is that a lot of companies might want to purchase naming rights for things like mass transit, they’re just not sure how much they're really worth. It's especially tricky to consider the length of a deal and assess how much costs will go up if the company renews the contract.
So why haven't more cities been successful at selling off the names of transit hubs? One possibility is that brands may be wary of being associated with all the negative experiences that sometimes transpire on public transportation: crime, injuries, delays, and so on.
Still, many cities continue to try. San Diego Metropolitan Transit System, for example, began considering selling naming rights in 2010 and is now negotiating with a major local employer to rename one of its three light rail lines. According to SDMTS spokesman Rob Schupp, the agency plans to pursue naming rights for individual stations after deals for one or more light rail lines are done.
A lighter version of corporate takeovers of transit stations have become much more common in the past decade, thanks to the rise of "station domination" ad packages. This is when one brand occupies all possible ad spaces in a subway or light rail station — i.e. floors, columns, turnstile arms, small vertical spaces between one stair step and the next.
Clockwise from top-right: Tropicana domination at Boston's South Station (screenshot), StubHub domination at NYC's Penn Station (screenshot), NBC domination at San Diego's Gaslamp Quarter station (courtesy of San Diego MTS)
According to New York City Metropolitan Transit Authority spokesman Aaron Donovan, the MTA’s ad revenue has increased year over year for the last 10 to 15 years, largely because of new advertising techniques like station domination. MTA dominations usually involve busy stations like Times Square and Grand Central and last between one and three months.
The willingness on the part of cities and transit agencies to take corporate sponsorship to the next level is obviously still there, so ultimately it'll be up to major companies to decide if the "ad spaces" offered in a public transportation naming rights deal — station signage, labels on maps, overhead announcements — are a good deal.
Top image: Back Bay station in Boston, one of the stations open for a naming rights deal. (stevegarfield/Flickr)