Markets in everything

by on January 21, 2011 at 3:37 pm in Economics, Political Science | Permalink

Bosses at Washington's cash-strapped public transportation service are mulling selling "naming rights" for Metro stations as a way of filling a budget gap, a spokesman said Friday.

"We're looking at a possible $72 million dollar shortfall in our budget for the upcoming year, and so we're looking for creative ways to try to close that deficit," Metro spokesman Steven Taubenkibel told AFP.

"One idea would be station naming rights," where corporate entities buy the right to have their brand associated with one of Metro's 86 stations.

There are precedents:

Philadelphia has sold telecoms giant AT&T the rights to a station for $3 million, and Barclays can append its name to a station in Brooklyn, New York after buying the naming rights reportedly for $4 million for 20 years.

In Washington, Metro thinks selling station naming rights will help to raise around two million dollars.

For 86 stations, that doesn't seem very good to me.  The full story is here and for the pointer I thank Daniel Lippman.  There are now jokes like "Big-Macpherson Square" stop and the like.

jimi January 21, 2011 at 11:43 am

$4 million for 20 years to cover ~5% of an annual deficit? What are they going to do next year?

jh January 21, 2011 at 11:59 am

A popular idea used to be renting out space to newsstands. I guess newsstands might become a thing of the past , but I'm sure some other kiosks would be willing to pay rent to be on metro property.

On the downside of naming rights, how would a company like it if most of the time their name is mentioned is because of escalator outages at their station?

agnostic January 21, 2011 at 12:11 pm

Jesus, the DC metro stops already bloated their names… 5 to 10 years ago, I don't know when exactly. I would guess it was during the housing bubble when realtors bribed the government to put their silly neighborhood's name on the map.

Now there are quite a few that have three long names each separated by a slash or hyphen. Look at this mess:
http://commons.wikimedia.org/wiki/File:Washington

Since they're so in love with the hub-and-spoke look, they shouldn't stop at three. Take 7 nearby landmarks and place each name fanning out from the metro stop like spokes. Then you could look at spokes within spokes.

Alex Tabarrok January 21, 2011 at 12:46 pm

Glad to see Metro is minding the gap.

dearieme January 21, 2011 at 1:28 pm

In Edinburgh the principal station is named after a series of novels. Naturally the railway company recently tried to change it to something mundane. A popular revolt ensued.
http://en.wikipedia.org/wiki/Edinburgh_Waverley_r

libert January 21, 2011 at 2:01 pm

If they named a station after a business, many people would probably think that the business was located there. I mean, the Smithsonian stop is by the Smithsonian, so it seems logical that the Walmart stop would be at a Walmart. That's all good if it's true, but if not it would just be confusing.

Dan Weber January 21, 2011 at 2:20 pm

Currently, a corporation may "sponsor" just a small portion of a very expensive R&D project that they would otherwise have to perform internally; by contributing a small contribution, they often get exclusive rights back to develop any inventions

This is pretty ill-informed. Universities are owners of boatloads of IP. I'm sure the individual schools (with huge budgets and legal departments of their own) are quite capable of negotiating for their own self-interest.

darren January 21, 2011 at 3:51 pm

Dupont Chemical Circle

Bill January 21, 2011 at 4:41 pm

Oh, and while you're at it, let's end government subsidies to airports, and let them charge the carriers for landing rights. The minimum wage hamburger flipper at McDonalds subsidizes airports, stadiums, university/corporate R&D, etc. Markets can work for airports, stadiums, and R&D programs.

liberalarts January 22, 2011 at 5:20 am

@Bill, it is a stretch to say that the minimum wage burger flipper is subsidizing airports,etc., since the bottom 50% or so of the income distribution currently has essentially zero federal income tax liability.

Bernard Yomtov January 22, 2011 at 7:18 am

libert,

If they named a station after a business, many people would probably think that the business was located there. I mean, the Smithsonian stop is by the Smithsonian, so it seems logical that the Walmart stop would be at a Walmart. That's all good if it's true, but if not it would just be confusing.

Good point. Also, lengthening the name would lose some of the value of a stop being named for a popular nearby destination, like the Smithsonian, Yankee Stadium, etc.

Besides, I'm tired of everything being for sale. What next, "The Google White House?"

zbicyclist January 22, 2011 at 11:16 am

Is it always good to have something named after you?

Say "Cabrini" around Chicago, and people think of the failed housing project, not the first American saint and founder of orphanages. http://en.wikipedia.org/wiki/Frances_Xavier_Cabri

Is there econometric evidence on stadium naming? A lot of companies who got naming rights don't seem to be around much any more. Did having one of the most prominent landmarks in America, the Sears Tower, help Sears? and that was a bright shiny new building, not a dreary subway stop.

JCL January 24, 2011 at 9:58 am

Chicago proposed this first-
http://consumerist.com/2010/11/chicago-to-sell-na

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