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Now a Message From a Sponsor of the Subway?

By MICHAEL LUO | July 27, 2004

Facing what it says could be budget gaps of more than $1 billion in the coming years, the Metropolitan Transportation Authority, the keeper of the region's mass transit system, is exploring selling naming rights to its subway stations, bus lines, bridges and tunnels.

Transportation authority officials quietly issued a formal request for proposals this month from marketing firms that they would charge with landing sponsorship deals that could include anything from renaming historic stations to attaching corporate monikers to building projects like the long-awaited Second Avenue subway. Indeed, the authority's officials said they could easily imagine the Delta Times Square Shuttle or, say, I.B.M.'s adopting the Tarrytown station on Metro-North's Hudson rail line.

That said, some industry experts, noting that subway stations do not quite resonate in the public imagination the way baseball stadiums do, said the authority might have a hard sell on its hands.

"People don't have that same emotional connection with their subway stops," said William Chipps, senior editor of IEG Sponsorship Report, a publication that follows the sponsorship industry. "To be honest with you, most people don't have good thoughts about it at all."

For the moment, the transportation authority is optimistic. And unashamed.

Katherine N. Lapp, the authority's executive director, said that such an idea might offend some New Yorkers, but that the option was being considered as a way to avoid raising fares and tolls.

"It's our job to figure out other ways to add revenue," she said, pointing out that any naming deal would have to be vetted by the authority's board. "Every dollar we get from these types of sources is one dollar more we don't have to take in fares or tolls."

The corporate naming business has exploded over the last decade. As companies have struggled to be heard above the collective advertising din, corporate sponsorships have become a widely embraced, and wildly expensive, alternative approach to marketing. In Boston, the Celtics now play in the FleetCenter, not Boston Garden. The San Francisco Giants have SBC Park (formerly PacBell Park), with Candlestick only a memory. Elsewhere, there are FedEx Field, the Staples Center, Minute Maid Park, the MCI Center, Coors Field, the Delta Center, and on and on.

The phenomenon has even spread to nonprofit institutions like hospitals and museums, as well as more and more financially troubled municipal governments. There is the Hasbro Children's Hospital in Providence, R.I.; the Ford Center for the Performing Arts in Chicago; and the General Motors Hall of Transportation in the venerable Smithsonian.

San Diego even briefly had Chevrolet as its official beach patrol car. And here, Mayor Michael R. Bloomberg has proposed selling naming rights to some of the city's public parks.

How much money there is to be made in the naming of transportation hubs like Times Square - the busiest subway station in the country - or a historic landmark like Grand Central Terminal, is an open question the authority is now ready to examine. Companies might want to sponsor entire routes like the Lexington Avenue line - newly crowned as the city's best in a subway report card. Even the Queens-Midtown Tunnel, cursed every day by commuters, could be up for grabs.

Since 1996, the transportation authority has more than doubled its advertising revenues by taking more creative approaches to using its space, allowing companies to monopolize entire subway cars or stations with their ads, and turning ad spaces above subway stations into blinking displays. Last year, the authority brought in $78 million in such advertising.

"It stands to reason, doing the more creative sponsorship branding approach, hopefully, we would like to double that," Ms. Lapp said.

When it comes to transportation systems, there are few precedents for this approach, and those have produced mixed results. In Las Vegas, Nextel Communications recently agreed to pay a reported $50 million over 12 years to plaster its name on a monorail station at the Las Vegas Convention Center and one of the nine trains for the new monorail system that opened this month. Sponsorships also help pay for the streetcar line in Tampa, Fla. But a few years ago, officials in Boston tried auctioning off naming rights to four historic stations there, only to attract no bidders.

Don Hinchey, vice president of communications for the Bonham Group, a Denver-based sports and entertainment marketing firm that has negotiated eight naming rights agreements for stadiums and arenas around the country, said there could still be cachet in sponsoring a station that has a certain place in the public imagination.

"Times Square, that would be a plum," he said.

In New York, officials with the transportation authority, in an internal presentation on the sponsorship program, argued that the authority's assets compare favorably with stadiums in their attractiveness to sponsors, because of the large number of people who use the authority's transportation network every day.

To put it in perspective, the officials asserted in the presentation, more people ride with the authority in 11 weeks than fly airlines in an entire year, and every three years the authority moves the "equivalent of every man, woman and child on the planet."

And in the request for proposals itself, transportation officials point out: "The demographics of M.T.A.'s customers cover the full range of contemporary U.S.A. This is an audience that has elected to be on board."

But stadiums, Mr. Hinchey said, have the added attraction for companies of having their names on television and in print countless times, increasing exposure exponentially.

"I would be very guarded in my estimate of potential revenue," he said. "I would not describe it as a big money-winner. I would see it as an opportunity to generate incremental income."

Another challenge for governmental institutions seeking sponsorship deals is public acceptance. In Boston, Ralph Nader and an organization he helped found to fight the spread of advertising in America, Commercial Alert, lobbied vigorously against the plan to add corporate sponsors to the names of subway stations.

"This is part of the decline of American values," said Gary Ruskin, the group's executive director. "We used to name things after people who were heroes, people we were proud of. Now we name things after the corporation with the deepest pockets."

"How low will New York sink?" he said.

Although renaming a subway station or bridge or tunnel may seem harmless, there are subtle but important effects, said Siva Vaidhyanathan, an assistant professor of culture and communication at New York University, who has written about the cultural impact of trademarks.

"The moment you slap any sort of private trademark on a public institution, you're reducing the sense of public investment," he said. "I feel less invested in the quality of Verizon Grand Central Station or Eddie Bauer Central Park."

Mayor Michael R. Bloomberg has drawn ire for aggressively pursuing corporate sponsorship deals for the city, including a five-year, $166 million exclusive arrangement with Snapple to sell its drinks in city schools. Mr. Bloomberg has also hired a former New York Yankees executive, Joseph M. Perello, to be the city's chief marketing officer.

Although the transportation authority's request for proposals highlights some of its high-volume stations, like Times Square, Herald Square and Grand Central Terminal, as among its prime assets, Doug Pirnie, senior vice president of sales and marketing for International Management Group, which handles many sponsorship deals, said it might be more effective for advertisers to choose more subtle opportunities to get their names out there to riders.

When it comes to sponsoring public institutions, he said, the best approach is not necessarily starting off by trying to get a company's name on everything.

"They want to do something that contributes to the overall public good and can be perceived by the public as a contribution to their better way of life," he said.

One idea? "I don't know what the M.T.A. spends on maps," he said. "They could have a company pay to print those maps. In return, they could put its logo on the maps, or if they have business outlets around the city, show them on the map."

Gene Russianoff, a staff lawyer for the Straphangers Campaign, a transit advocacy group associated with the New York Public Interest Research Group, was cautious when asked about the possibility.

"We're not dogmatic on the topic," he said. "Having said that, any sort of major naming rights, like a subway station, is something I think they would have to go slowly on. At minimum, they should poll the riding public on its views."

He pointed out that some stations already include names of important institutions located nearby, like 116th Street Columbia University, or 47th-50th Streets Rockefeller Center.

Perhaps the most obvious existing example of a corporate name on a subway station? Times Square, formerly Long Acre Square, renamed in honor of The New York Times a century ago after the company moved its headquarters there.

From The New York Times

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