Mellon Financial Corp. is expected to sign a 10-year, $18 million deal to put its name on a Pittsburgh sports arena.
The $46.8 billion-asset company this week said it is negotiating with the Pittsburgh Penguins professional hockey team to rechristen Civic Arena as Mellon Arena. The deal won approval Tuesday from the city's Sports and Exhibition Authority, and a final agreement is expected to be signed by March, the company said.
"This sponsorship is an excellent fit for us as we continue to expand our presence in the city of Pittsburgh, our capabilities, and our brand recognition," said Martin G. McGuinn, Mellon's chairman and chief executive.
The agreement would allow Mellon to place its logo throughout the arena, including the center of the ice rink and the building marquee; highway and directional signs also would be changed to display the banking company's name. Mellon also would have exclusive rights to offer financial services, such as the placement of automated teller machines, at the venue.
With the deal, Mellon joins a growing number of major banking companies that are pairing up with sports franchises and arenas. Firstar Corp. of Milwaukee in February agreed to put its name on a minor league hockey arena in Cincinnati. Chicago-based Bank One Corp. signed a 30-year, $66 million deal for the naming rights to Bank One Ballpark in Phoenix, where the Arizona Diamondbacks play baseball.
"It gets their name out there in a way that is associated with an established figure in the community," said Brannon M. Cashion, vice president of Addison Whitney Inc., a Charlotte, N.C., corporate identity consulting firm.
However, the strategy does involved certain risks, he added.
"Sponsoring sports teams can be a good thing and a bad thing for your brand," Mr. Cashion said. "If the team is winning, the bank is perceived as a winner; but if the team has been losing, it generally doesn't reflect very well."
In addition, banking companies should consider that sports arenas are sometimes referred to by their acronyms. For example, the Bank One Ballpark is sometimes referred to as "the BOB."