Name game

Toronto is spawning a seemingly endless supply of bad new ideas these days. The most recent is the selling of naming rights to generate a little bit of money for a city that cut taxes and now finds it can’t fund basic programs.

We’re all used to corporate names permeating public space: Rogers Centre, Air Canada Centre. So some ask, what’s the difference if we put a few more brand names on a few more public buildings or public spaces?

Is it just a matter of degree? All but the strongest critics of corporate involvement in the public realm would likely accept a plaque on the wall if a company paid for an entire new subway or LRT line.

But the sums involved in the type of sponsorship we’re talking about don’t even come close to the totals needed for a new line or a subway station renovation. Corporate payment would be in the low millions at best, while station renos cost tens of millions, and subway lines billions.

From 90 to 98 per cent of the cost  (depending on the project) would still be carried by the taxpayer. So the debate is really about whether you’d sell naming rights on major public infrastructure for the equivalent of a few hundred thousand dollars a year on a multi-million-dollar, 10- to 30-year deal, because that’s the best of what’s on offer.

Only a few North America transit systems have sold naming rights. (Examples from outside North America aren’t very useful; the context is quite different.)

In Cleveland, the transit authority got $6.25 million for a new line in a 25-year naming deal. This works out to $250,000 a year – minus $50,000 to $100,000 in likely lost revenues, since other companies were excluded from advertising as a result of the contract.

Then there’s Chicago, where Apple has offered $3.9 million to renovate one station in exchange for naming rights and exclusive advertising. In New York, the private sector paid $4 million for one station – again, a few hundred thousand annually in a multi-year deal involving loss of existing ad revenue.

It should also be noted that so far, only one station in each city has been sold, despite the fact that both transit agencies have indicated they would accept more. But the market is likely limited because the novelty is limited, and therefore the appetite of the corporate sector.

Closer to home, the Toronto Community Foundation’s station renovation project, which brought us the Museum station revamp, had to put future station renos on hold because of insufficient corporate interest.

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Source: NOW magazine