Dérbi das arenas: Compare values ​​and contracts for the naming rights of Corinthians and Palmeiras | soccer

At a time when fans are increasingly concerned about the management of their clubs, and not just about what happens on the field, the issue generates debate. One of them has to do with Corinthians’ biggest rival, Palms. After all, who made the best deal with the name of their arena??

The question is difficult to answer, but a week before the derby between the two teams for Brasileirão, the give provides explanations and comparisons between the agreements made by the clubs with the holders of the respective naming rights. In São Paulo, they are the only two venues sponsored by a company.

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Although designed at the same time, the Palmeiras and Corinthians houses followed very different models.

The Alviverde Arena was built after the remodeling of the Palestra Itália, the former stadium of the club. In 2010, Verdão signed a contract with the construction company WTorre, which assumed the total cost of the work in exchange for managing the space until 2044, the club participates in the profits of the entire operation.

It was the construction company that, in April 2013, sold the naming rights to Allianz, a German company that owns the name of other arenas around the world. Even before its opening in 2014, the stadium was called Allianz Parque.

Timão announced the project for the construction of his long-awaited stadium in 2010. The dream came true in 2014, when the Arena hosted the opening of the World Cup.

Although the sale of the naming rights was considered fundamental by the Corinthians from the beginning, it was slow. After a series of unsuccessful promises and negotiations, the club managed to close the deal when least expected, amid the economic crisis caused by the coronavirus pandemic. The agreement was celebrated with pomp, on the occasion of Corinthians’ 110th anniversary.

Signed six years apart, the two contracts have the same value and duration. Allianz and Hypera Pharma seek to invest in the Palmeiras and Corinthians arenas R $ 300 million each, for a period of 20 years.

The two clubs will receive (Verdão already receives) R $ 15 million per year, an amount adjusted every 12 months by the inflation index.

With equal numbers, there isn’t even room for discussion, right? Incorrect!

Palmeirenses can argue that they closed the deal much longer. In 2013, R $ 300 million represented a greater purchasing power than today.

Corinthians fans recall that at that time the Brazilian economy was experiencing a boom and the sports marketing market was on the rise, quite different from today. So much so that at that time President Andrés Sánchez said that the name of the Itaquera arena was worth R $ 400 million.

Interestingly, the Palmeirense sand helped Corinthians assess the price of their naming rights.

Before closing with Hypera, the club hired IBOPE Repucom, a specialist in sports marketing research and return of brand exposure in the media. The company based its analysis on three fronts:

• How much did Corinthians generate from media exposure in the last two years? If there had been a name for the stadium since 2018, what would the comeback have been?
• How many media will be generated for the owner of the naming rights in the next ten years? This is the most difficult variable, as it involves projecting results (which generate reports, game broadcasts, and other exhibits).
• Conference and banner: Palmeiras as an example.

On the last point, the executive director of IBOPE Repucom, José Colagrossi, explains:

– Why do we use Palmeiras as a reference? Because we’ve done projects for them in the past, Palmeiras is a client of ours, and we took the projected figures from Corinthians and saw how they compare to the actual figures from Palmeiras. They are stadiums for big clubs in São Paulo, new, that also have a show (as there will be at Corinthians). We place a rating for football, but also for other events, something in which Palmeiras is very strong. In this third phase, we compared our past and future results with the Palmeiras numbers to see if it made sense or not.

According to José Colagrossi, the value of the naming rights suggested to Corinthians by IBOPE Repucom was 5% lower than that closed with Hypera Pharma.

– I can safely say that it is a good deal for Corinthians, because we did a very detailed, slow and complete study of the market value, and what we projected was a little below the sold. I have data, information and analysis, I can say that the value is correct. As the president (Andrés Sánchez) said, back there there was talk of selling for R $ 400 million because it was the amount of the debt with Caixa. It was not a scientific or data-based analysis – says the executive.

When asked if Corinthians should not receive more than Palmeiras for having closed the contract seven years later, Colagrossi argues:

– The economy in 2013, before the World Cup, was euphoric. Brazil was still going through a phase of economic growth. It was another economic, social and football moment. We compared club sponsorship sales between 2013/14 and 2019/20, and what we saw was a 20% drop. Brazilian football is still recovering from the loss of two World Cups, it is experiencing a time of great competition from foreign sports and, even so, the value of R $ 300 million is fair on the market. In 2013 it was another moment, maybe it was worth more.

Does this mean that Palmeiras received little? Colagrossi explains:

– It wasn’t a bad deal. Because at that time, even because it was a new stadium, there were many doubts that today no longer exist. If this contract was renewed now or in the next few years, I think the value would be discussed with the sponsor. But, at the time, it was the value that seemed fair for a new stadium, under construction, with all the uncertainties it had, Brazil had no tradition of naming rights. I had, if I’m not mistaken, an example, of that Kyocera Stadium, in Curitiba, a smaller stadium. All the uncertainties that existed made this the fair market price between the parties. Six years later, looking at the numbers, people see that it was a great deal between the two, which made it possible for Palmeiras to have their stadium, but also for the insurer, because the profitability it has from that sponsorship is exceptionally good -he added.

He approached Palmeiras and WTorre to discuss the contract, but they preferred not to speak.

Both Corinthians and Palmeiras have a lot to offer their partners commercially. For starters, they both offer the best cabins in their sands to name the rights owners.

In the case of Timão, Neo Química will name sectors of the stadium with the names of its products and, with the help of a partner, will open a large pharmacy in the Arena.

Allianz, in turn, prefers WTorre to take out insurance for its works.

In addition, the Palmeirense stadium is already consolidated as one of the great stages for events and shows in São Paulo, which offers visibility to the sponsor.

– Let’s start with the similarities: two giant clubs in the city of São Paulo, with a huge tradition, with great fans and a large space occupied in the media. The differences are: the location of Palmeiras is more central than that of Corinthians, which gives it an advantage, due to the volume of people who pass through the door, traffic, shops, bars and restaurants. On the other hand, Corinthians has two solid advantages: it is a larger stadium, with more spaces, more possibilities for activations, shops, events and parties than Palmeiras, which is a little smaller, tighter – analyzes Colagrossi.

A high-impact deal like naming rights goes way beyond just naming the stadium, but the fact that the name is in favor of the crowd is important in delivering the expected return on investment brands. In the case of Palmeiras, as its name was created together with its inauguration, the assimilation by the people of Palmeira occurred in a more natural way.

In the case of Corinthians, this process is usually a bit more complex and will require more efforts from the club and the fans themselves.

– We are not used to naming rights in Brazil. I personally believe in what I have been studying, and we did a job for the Arena for three years, we identified that the fans were interested in supporting Corinthians as long as the club worked on identification. If they work through this process, fans tend to buy into the idea. Rival fans will, of course, buy into the idea of ​​creating pejorative nicknames. The process will also have to come from Neo Química itself – explained Fernando Fleury, CEO of Armatore Market + Science, and author of the article “What is the real value of the naming rights?”.

– When you say that there will be a pharmacy inside the Arena, you are giving a lot of ammunition to rival fans. What is expected of the Arena? Bar, cafes, shops … You may even have a pharmacy, but being the main sponsor you have a pharmacy, it may sound strange. Let the pharmacy be the beginning of something much bigger than what is to come. Let this be the motto of the action. The association has to be very strong in this regard. It is important to understand that it is a partnership process. It is not simply a matter of playing into the hand of one or the other. It will not be easy. But it is possible, yes, to leave something very structured. The challenge will be to name the name, which we are not used to, and we are in the cultural process of activation – he added.

Based in Munich, the Allianz insurer has several christened stadiums around the world. Bayern Munich, Nice, France and Juventus, Italy, are the best-known teams, besides Palmeiras, with their company-named stadiums. Verdão, therefore, was not the brand’s first major investment. The risks, pros and cons of the business were already known.

In the case of Hypera Pharma, it is a company that is strongly committed to advertising and uses part of its annual income (estimated at R $ 4 billion net) to enter the Brazilian sport. It is the first naming rights agreement signed by the pharmaceutical company. For Fleury, the support is for the company to sustain the long-term commitment, which, according to him, would reinforce Brazilian football itself.

– I don’t think it’s a risk, but I could have paid less if I wanted to. He paid a good amount because he earns a lot. Invests R $ 800 million in marketing in the year. Aggressive courage. The R $ 15 million per year is equivalent to 2% of the income. Low value. The fact is that I believe that the R $ 300 million could have pushed Corinthians to have no competition. No one would offer other values. I think the company understands that the risk will be worth it, that the action will pay off. I hope you complete the 20-year process. When you take on the naming rights, you tell the market something important: that you believe in Brazilian sport and I am making a long-term commitment. If it comes out in three years, it will happen to the market that Brazilian sport is not serious and that would be bad. We need long-term commitments in the sport, Fleury added.

President Andrés Sánchez even said that the sponsorship will change the structure of football.

WTorre operates additional sponsorships at the Palmeiras stadium, called “Sector Name Rights”. Banco Pine and Prevent Senior have sectors with the respective brands.