Tuesday, December 4, 2012

OCBC could pay up to S$100m to name Sports Hub

SINGAPORE: If the deal passes muster, OCBC Bank could pay the Sports Hub between S$80 million and $100 million over a period of 15 years for the right to have their brand attached to the name of Singapore's biggest sports complex when it opens in April 2014.

TODAY understands that these are the key terms of the bank's offer that the Singapore Sports Council and authorities are considering.

TODAY reported on Monday on OCBC's bid to clinch naming rights to the Hub and all its facilities save the National Stadium, which will be free from commercial branding.

If successful, it could be a coup for the bank as there would have been keen competition to bag the rights. This is because the market for sports here and around the region is growing rapidly, international and local experts said.

Mr Patrick Nally, a sports marketing expert who transformed the Olympics and FIFA World Cup into multi-billion-dollar properties, said the amount OCBC has to pay each year - at under S$6 million a year - cannot be quantified from the exposure it stands to get.

"Singapore is turning into a regional sports centre and the international publicity its name gets, especially from big events at the Hub, will be invaluable," said the London-based Briton.

"But what OCBC ultimately gets out of what it pays for the rights depends on their relationship with the Sports Hub. They must have had this feel-good thing to want to do this long term."

It is this tie that will be key if OCBC is to benefit from its investment, according to Mr Graham Hitchmough, the Regional Director of Asean at global brand agency Brand Union.

He does not believe there will be any direct impact of the bank's stock in the short term. However, he reckons it will have a positive effect over time, if both sides manage their relationship well.

Said Mr Hitchmough: "There must be value for both OCBC and the consortium in this deal. The bank must also continuously work on their investment to get more value for their brand."

The move to get ahead of the competition to snag the naming rights for the Hub is also a show of strength by the bank, said Mr Justin Harper of IG Markets.

The market strategist believes other local banks and international financial giants, who invest heavily in sports, were also on the scent to buy the naming rights to the Hub.

Said Mr Harper: "The complex is being built and is not yet established like those in Europe or the United States and we don't know if the events at the Hub will be successful.

"But this is a show of strength from OCBC that they are a big local institution betting on a local project to help make events happen there. It's a smart move and will give their stockholders a certain measure of pride, but I am sure they will ask if this is money well spent."

Apart from the National Stadium, the Hub will, when completed, also consist of a 6,000-capacity indoor aquatic centre, a 3,000-seat multi-purpose arena, 41,000 square metres of business, commercial and retail floor space, a water sports centre and the existing 12,000-seat Singapore Indoor Stadium.

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