Jul
21

An MTA policy – but no deals – for subway station naming rights

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Forest City Ratner pays $200,000 a year to append the Barclays Center name to the Atlantic Ave. subway stop. (Photo by Benjamin Kabak)

The MTA is set to unveil a series of budget documents this week that will set the stage for the next few years’ worth of conversations. They’re unveiling revised estimates for the current capital plan based on the need to spend money to repair the system and mitigate the impact of future storms and surges, and they’re keeping in an eye on the next twenty years of system growth as well. I’ll be taking a closer look at these documents this week, but one theme is a constant: Where will the MTA get the money to do whatever it is it wants to do?

One way the MTA won’t get money is through station naming rights deals. The agency needs billions of dollars, and even the most lucrative naming rights deal in the U.S. is worth only around $1 million annually. The MTA’s one current naming rights deal for a subway station is netting the agency a whopping $200,000 a year. But that’s not stopping the MTA from putting itself out there. This week, as part of the July board meetings, the MTA is formalizing its station naming strategy, and I think it gets everything right. Whether it can make money from the effort remains to be seen.

The new guidelines will be voted on this week, and they are available as a pdf on the MTA’s website. The MTA is consolidating the naming rights process and procedures so that Jeffrey Rosen, the head of the agency’s real estate department, and the new policy will not apply to directional signage, changes to the street grid or advertising campaigns that have no impact on a station name. It will apply to any other situation where an advertiser wants change “the official designation” of any MTA facility. This can include signage, maps and on-board announcements similar to the way Barclays Center has replaced Pacific St. at the Atlantic Ave. subway complex.

By putting forward this proposal, the MTA says it wants to receive “fair value” for the rights to name its stations. At the same time, the agency wants to “respect the historic nature” of its stations — which is less of a concern than the third factor: ensuring that customers can “safely and efficiently navigate the MTA system.” The third qualification I’ve stressed repeatedly, and it’s why SEPTA’s naming rights deal fails. AT&T Station — the replacement name for the Pattison station — tells a rider nothing about the station; it could be anywhere. But for its flaws, Atlantic Ave./Barclays Center carries a major destination in the sponsored station name.

With these policy goals in mind, the MTA set forth its standards. It will require “a compelling nexus between the Facility and the Sponsor” for any naming rights deals. “Requests for renaming,” the policy says, “will only be accepted from Sponsors with a unique or iconic geographic, historic or other connection to such [station] that would be readily apparent to typical MTA customers.” In other words, advertisings just looking to slap their names on a station won’t be able to do so. The Tropicana Station at Bryant Park won’t become a reality, but if Macy’s, for instance, wanted to buy out the Herald Square station, the MTA may listen. This limitation could eliminate many potential advertisers before the MTA even has the chance to discuss money.

If any naming rights venture gets this far then, the next issue concerns value. Considering how naming rights deals are tough to come by, it’s hard to say what “fair value” means in any context, but in addition to pure dollars, the MTA will also consider promised capital upgrades made by the sponsor or capita upgrades taken on by the sponsor in exchange for the naming rights. In essence, the MTA is creating something of an Adopt-a-Station program. How this works in practice rather than theory again remains to be seen.

Matt Flegenheimer of The Times reported on this plan over the weekend, and he had the chance to gain more insight into the process. MTA advisers recognize that transit agencies across the nation are hoping to draw money from naming rights, and one of MTA CEO and Chairman Tom Prendergast’s right-hand men claimed that “from time to time,” advertisers have expressed an interest in making a deal.

The policy, the MTA says, is to protect its customers too. “We don’t want to be confusing people,” Allen Cappelli, an MTA Board member, said. “There are neighborhoods where I would be very hesitant because of the geographic significance.” The MTA also won’t rename stations for people, living or dead. (Sorry, Ed Koch.)

This all sounds well and good. Yet, I can’t help but think it’s all for nothing. I’ve followed this issue for years, and nothing much has come of it. Madrid recently renamed an entire line for just €1 million a year while Boston has unsuccessfully put its station names up for sale. Austin, Toronto, New Jersey, D.C. and Chicago all want someone to pay for their stations, but very few people are biting. It’s too hard to overcome the stigma of being associated with something most people love to hate for these deals to be worthwhile. Maybe the MTA can realize some dollars, and they have a solid policy in place. But it’s a policy more like than not to go untested over the years.



Categories : MTA Economics

12 Responses to “An MTA policy – but no deals – for subway station naming rights”

  1. Dan says:

    As you say, I’m sure the MTA probably doesn’t expect to generate much revenue through adopt-a-station or whatever. Just trying to have a clear policy in case there are some more companies that happen to think this would be a good use of marketing budgets.

    • John-2 says:

      And they really do have to set a policy where the station branding has some direct connection to what businesses are at the station, which likely would also be best for the businesses. Renaming a station for a company that has no connection with the neighborhood but just happens to be in a high-volume passenger location would be more likely just to anger riders at the MTA and the company than to be any sort of positive promotion of the business.

      It probably does limit the to only the highest of high-profile businesses (such as, for example, co-branding Columbus Circle as the Time-Warner Center), but if the idea is to make identification of stations and their locations as easy as possible, to open any station up to renaming simply based on willingness to shell out enough money would be a real Metrocard in the eye to riders by the MTA.

      • aestrivex says:

        Not to say that I expect a lot of money to come from deals of this sort — but I really don’t see what the problem is.

        Names containing no geographical information whatsoever like “AT&T station” are a problem, yes. But if the opportunity came around for a name like “Domino’s Pizza/Union Square” came around, why should the MTA turn down free money?

  2. BoerumHillScott says:

    On a side note, although the MTA updated the neighborhood to include Barclays Center, they also left on multiple places taht no longer exist. Over a decade since they were updated, these maps are becoming more and more inaccurate.

  3. Scott E says:

    Rather than naming rights, I think a more authentic “Adopt-a-Station” program would be more beneficial. It would earn the “Adopter” separate but distinguishable signage at station entrances (like the highway ones), and the adopter would take ownership of the cleanliness of the station. It would help the Adopter’s general brand perception, making them seen more altruistic than greedy, and they could affect that perception by how well they keep up the station. A sparkling, pristine station adopted by Chase might make me subconsciously rank them as more caring and attentive than, say, a competing bank.

    Since the name of the station wouldn’t change, the company adopting it wouldn’t necessarily need geographic ties to the neighborhood (though it helps)- and passengers wouldn’t be at all confused or disoriented.

    If the adopting company chooses to clean (or outsource cleaning of) the station privately, they could really affect their brand perception while relieving the MTA of a duty they don’t particularly do well. Or they could just pay the MTA to clean, and get what they get…

    • Stephen - NYC says:

      As someone who despises naming rights, I like the idea of, as you put it, “a more authentic Adopt-A-Station program.” That way I don’t hear the conductor telling me about a corporate john and I don’t have to see the corporate john’s name on a subway map.
      Also, the signs telling us about the Adopter can’t be all over the place. And they can’t be big and gaudy. And there has to be a monitoring system to ensure that they are not doing the cleaning once a year or so like it appears to be with the Adopt-A-Highway program.
      This way we get something for being marketed to, unlike the corporate john deals.

  4. Mike says:

    Not that I approve of SEPTA’s “AT&T Station”, but the situation there was kind of like Willets Point / Shea Stadium, where the station only exists to serve the stadiums. On maps it has an additional label Sports and Entertainment Complex, and the onboard announcements list the stadiums the end of the line.

    • Stephen - NYC says:

      The big difference is that the stadium in Queens was not a corporate john named location. And Citi didn’t want to pay any money for the naming rights to the station, so we now have Mets-Willets Pt., for which I am eternally grateful since I ride the #7 train. As I mentioned in an early post, I despise naming rights and while I don’t have to see the joint when I am on the train, I’d have to hear the john’s name every time if they did pay for the name. As an exercise in curiosity, I just looked up the ATT location. Not only is the station a corporate john name, but all three of the current sports joints are also johns’ names (2 banks and financial company of some sort).

    • Justin says:

      Feel good that the MTA has a policy. AT&T Station (nee pattison station) primarily serves the stadium, but there are neighborhoods that people live in and links buses to points south. The AT&T name isn’t attached to any of the stadiums, though, so it doesn’t have any connection to a stadium or location. Another station corporate buyout was recently announced as Market East Station becomes Franklin (University) Station which is located several blocks away, but closer to other less prominent stations on other lines. We are fast becoming the capitalist Pyongyang here in Philadelphia where our stations names have nothing to do with the geographic features on the ground.

  5. Syn says:

    I’m not as pessimistic about the potential for naming rights. There’s really only one or two places where the subway is sexy and ubiquitous in the English speaking world, and NYC is one of them. Citigroup pays 20 million dollars a year to be associated with the Mets, 500,000 for a well trafficked subway station doesn’t seem outrageous. I think once a couple companies stick their toes in the water that there could be a big play for subway stations. The proximity limitation for companies absolutely has to go before anyone will bother, but there are lots of different possibilities.

    Why not tie the price of a station to annual ridership? Lock them in for ten years for a dollar per 2012 rider. They’re not going to buy Times Square for 6 million a year (I assume), but maybe they buy a nearby station on the 1 train, 50th (792,000/yr) or 28th (434,000/yr), and get a lot of the same ears. 730,000 dollars a year for 1 Av on the L, all the hipster ears on the planet. Ad agencies have spent a lot more money on a lot of dumber things that get fewer eyeballs and eardrums.

    • Syn says:

      In addition, there’s a huge opportunity for advertising for small and medium sized local businesses. The MTA doesn’t make a whole lot of money on these smaller stations, why not try and subsidize that? And if you’re the business, most of the people getting off or paying attention to that station are probably local. How many people are getting off at Neptune Avenue? For 50,000 dollars a year you can buy neighborhood ubiquity for a decade.

  6. Larry Littlefield says:

    The desperate search for something for nothing. Those revenues won’t make a dent. I was stunned how little the MTA got for Barlcays. There aren’t many stations that come close to that one.

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