TORONTO – When Dave Hopkinson and John Doig signed off on the biggest naming rights deal in sports history at 1:46 a.m. in a Bay Street lawyer’s office this fall, their 20-year, $800-million contract was not perfect, quick or easy.
But it was one thing, both parties agree.
"It’s a hell of a lot of money," Doig, Scotiabank’s chief marketing officer, said Tuesday at the PrimeTime Sports Management Conference. "If you have a hockey portfolio in this country, you need the lease."
That lease means stamping the bank’s name on 40 Bay St.—home of the Toronto Maple Leafs, Toronto Raptors and host of the city’s large-scale concerts and special events—for two decades.
The venue now known as Air Canada Centre, whose own naming rights to the 1999-established building cost the airline $4 million a year at that time, will be rechristened Scotiabank Arena on July 1.
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"I think that name’s perfect," said Hopkinson, the chief commercial officer of Maple Leaf Sports & Entertainment.
MLSE and Scotiabank considered a handful of new names, including Scotiabank Gardens, which would’ve been a nod to downtown’s historic Maple Leaf Gardens, now part Loblaws grocery store, part Ryerson University athletic facility.
"In Toronto, the Gardens is a bit of hallowed ground," said Doig, who reminded that MLG never had corporate sponsorship. "Part of the city would’ve said, ‘You dirty bastards.’ "
The parties were also concerned that "Scotiabank Gardens" would get abbreviated in conversation to "The Gardens," the way Boston’s TD Garden is "The Garden."
Invoking the spirit of epic boxing matches and historic bullfights, Doig says, "Big things happen in arenas."
Hopkinson likes how uninteresting "Scotiabank Arena" sounds. That’s intentional, to make the sponsor the default slang.
"A year from now, we’ll be going to Scotia to go to the hockey game or the concert," Hopkinson said.
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The seeds of Scotiabank’s naming-rights takeover were planted six years ago, when it became the official bank of the Maple Leafs. The company knew Air Canada’s rights were up in 2019 and wanted to start building a relationship with MLSE with that in mind. Scotiabank then secured an exclusive naming-rights negotiating window.
The executives at MLSE never believed they were getting full market value from Air Canada for a dual NBA-NHL venue. Over the course of the previous 20-year deal, they watched the airline industry change and saw Air Canada dip into bankruptcy protection.
"There was always friction between us and Air Canada" regarding price, Hopkinson explained.
Over the past decade at least 20 different Canadian brands, Hopkinson said, approached MLSE interested in plastering their name on the arena.
"Well, who’s interested and who’s serious?" Hopkinson wondered.
Scotiabank—which already paid to have its name on the Calgary Flames’ Saddledome and had been pouring brand dollars into youth hockey—was the only one.
"This came down to fit and fee, but fee was before fit," said Brian Cooper, CEO of MKTG Canada, who helped broker this deal and others on behalf of Scotiabank. "Any one of John’s competitors would have paid as much or more to have that property.
"To not have the Leafs at this point in time would’ve been a huge hole in the hull of the ship."
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Cooper cites Rogers’ landmark 12-year, $5.23-billion NHL rights deal of 2013 as an example of the competitive, accelerated and expensive sports business landscape. Scotiabank views hockey as a major brand-driver.
The bank crunched the numbers and figured it would need to spend $800 million through a cobbled-together collection of other sponsorships in order to match the brand equity from naming 40 Bay.
"We were aggressive from Day 1," Cooper said. "I wasn’t happy that the price was $40 million [per year], but at the same time we were able to justify that."
Scotiabank is the only bank that will be able to talk Leafs. Plans to intertwine its Scene program, which holds a membership of 8.7 million, with the hockey and basketball teams are underway.
"Exclusivity is grotesquely undervalued in the current marketplace," said Hopkinson, who must feel more secure now that MLSE is partnering with one of Canada’s cash-flush banks. "The crappy one makes $2 billion a quarter."
The Scotiabank deal includes a $20-million philanthropic donation to MLSE’s charity branch, which makes sense since both corporate cultures are aligned in their support of youth sports.
Now that a deal six years in the making is complete, the rebranding of the Leafs and Raptors home begins.
Hopkinson describes the project transformation from ACC to Scotia as a nightmare.
"It’s not an erase-and-replace situation," Hopkinson said. "It’s a shocking amount of work."
Still, the sides agree, worth every penny.
