At the end of August, it was announced that Toronto’s Air Canada Centre will be renamed Scotiabank Arena. In simple terms, it is out with an airlines company and in with a bank.
That change is not exactly breaking news. What is newsworthy is the price tag.
Scotiabank will pay $800 million over 20 years for the right to have their name on one of the most significant sports complexes in Canada. $800 million is a hefty price.
That amounts to $40 million per year, or $3.3 million every month for 20 years.
The logic of this mammoth contract is that the bank wants to position itself front and center to the consumers and institutional clients they currently service or hope to do business with in the future.
While Canadians try to deflect the bombardment of advertising they receive from traditional and digital media, those same Canadians will seek out the best in sports and entertainment.
The Raptors, Canada’s only NBA franchise, has more than quadrupled in value since 2003. And as of now, the Toronto Maple Leafs, having made the NHL playoffs last year, and who came close to beating the Washington Capitals in the first round, are the talk of the town. (Thanks in part to three youngsters joining the team: Auston Matthews, Mitch Marner and William Nylander.)
When considering the $800 million price tag, it helps that the current enthusiasm for the Toronto Maple Leafs and Raptors is growing.
But that’s just the tip of the iceberg.
With the naming rights, Scotiabank will not only position itself in front of consumers who attend games and entertainment events.
Their brand will also be front and centre across Canada and the U.S. by way of the media with their cameras who report the events, and the sportscasters who call the games and mention the venue. Scotiabank is also counting on boosting the emotional connection their brand has built as ‘Canada’s Hockey Bank’.
An excellent strategy.
However, this also highlights that banking and all related services are large and lucrative. Business logic suggests this kind of expenditure was only made with the expectation of increased revenue and profits.
Perhaps the Scotiabank strategy is in part to prepare itself from the next wave of competition which will come from Internet savvy firms like Apple, Google, Microsoft, and Amazon.
So how does this influence the financial activity of individual financial services consumers?
Scotiabank, plus the other large banks that are often referred to as the big banks, want your business. They are extremely competitive.
Scotiabank has used the power of promotion to try and further build their brand and gain new customers.
Individuals should take advantage of this competitiveness to ensure they are receiving the best financial services at the best price.