The Anti-Naming Rights Switcheroo: How It Netted A University $85 Million
Posted November 5, 2007 12:00 pm.
This article is more than 5 years old.
We live in a world where everything is corporate and everything’s for sale. You don’t have to look much farther than Toronto to see the evidence that big business is always looking to find a way to gets its name mentioned. And branding has become a huge industry. There’s the Air Canada Centre, The Four Seasons Centre for the Performing Arts, the Sony Centre (which was the Hummingbird Centre and before that, the O’Keefe Centre.) And let’s not forget the CN Tower.
So in a world where an increasing number of baseball stadia now bear the name of a corporation (Safeco Field, Tropicana Field, etc. etc.), what one financially strapped institution has done to raise badly needed revenue is either sheer genius or incredible gall.
The dean of the University of Wisconsin-Madison School of Business tried to raise $50 million back in 2002 by selling the naming rights to his school. But it didn’t seem right to Michael Knetter. So he decided to switch the idea. He’s now raised $85 million from alumni instead, guaranteeing the school won’t give the naming rights to anyone for at least the next 20 years.
The fact that the anti-sales idea worked so well is stunning many observers, who thought just about everything was up for grabs for the right amount of money. “It is an unprecedented act of selfless philanthropy,” agrees Terry Hartle of the American Council on Education. “I don’t know of another case where anything remotely like this has taken place and I hope it is the start of a trend. It’s the most interesting development in philanthropy I’ve seen in the last year.”
Milwaukee magnate Sheldon Lubar – who already paid $10 million to have his name used on another business school in the state – ponied up the final $5 million in this case. “Someone told me ‘You’re the only person in the United States that’s going to have two business schools named after you or not named after you,'” he laughs. “Well, that even makes it better, doesn’t it?”
Knetter plans to use the money to hire more faculty, raise salaries and help students. “This thing has succeeded beyond my wildest dreams,” he admits.
But like any good businessman, his motives aren’t solely altruistic. Knetter has noticed that the price of naming rights has been skyrocketing in recent years. He suspects that by 2027, when the agreement is up, he could reap a major fortune by offering up the rights to the school’s name again, a figure he estimates could be worth an astounding $300 million or more by then.
Which may just be the best lesson future business leaders will learn in his school.
