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Branch sale prompts arena name speculation; HSBC shows no signs of giving up rights

HSBC Bank USA's ties to the Buffalo Sabres date back more than 15 years, all the way back to the days when the team's home was known as Marine Midland Arena.

Will that be changing now that HSBC is reducing its local presence?

Sports marketing experts say that the change in HSBC's operations doesn't necessarily mean the bank wants out of its naming rights deal at HSBC Arena and that a more likely scenario would be the addition of new corporate sponsors for the arena.

"There's now room for more partners," said E.J. Narcise, a principal in Team Services, the Maryland company that secured M&T Bank's naming rights with the Baltimore Ravens. "And those conversations could be taking place right now."

Others suggest that the benefits HSBC enjoys, most notably national media attention, continue regardless of the bank's presence here. The bank's naming rights contract runs through 2027.

"They're still getting all the exposure they got last year," said Eric Smallwood, senior vice president of Front Row Marketing Services in Philadelphia. "They're still getting the branding they got from NBC, ESPN and newspapers across the country."

Narcise thinks HSBC and the Sabres may look at this as an opportunity to share the naming rights' benefits -- which can extend beyond the name of the arena to advertising inside the building and commercial time on broadcasts -- to other local companies.

He mentioned First Niagara, which is buying 195 HSBC branches, as one possible new partner.

Without mentioning the likelihood of a partnership with HSBC, First Niagara CEO John R. Koelmel made it clear this week the bank is interested in establishing a relationship with the Sabres.

"To the extent that type of opportunity became available or we have the opportunity to further establish a relationship with the Sabres, we'd certainly be happy and willing to have that discussion," Koelmel said Monday.

HSBC is showing no signs of wanting to give up its naming rights at the downtown arena and went out of its way to suggest otherwise.

"These things always have value," bank spokesman Neil Brazil said Tuesday, "and we do have a good relationship with the Sabres."

When asked if the bank might seek changes in its deal with the team, Brazil declined to comment, except to suggest that the two sides talk often about their relationship. "We have a regular dialogue with the Sabres," Brazil said, "but the nature of those conversations is proprietary."

Sabres officials could not be reached to comment.

In terms of dollars and cents, HSBC's contract with the Sabres would seem to make less economic sense now than it did before the bank sold its retail branches in upstate New York.

Experts say the primary benefit behind most naming rights agreements is the high-profile image it provides the company among local sports fans, many of them current or future customers.

"If they're leaving the retail market, the exposure they get from naming rights is clearly diminished," said Andrew Zimbalist, an economics professor at Smith College and an expert on sports finances. "It's going to reduce the value, no question about it."

Zimbalist said it's possible HSBC, given its continued corporate and commercial presence here, might consider the naming rights valuable enough to retain, especially if the price is right.

He also thinks it's possible the bank might use this opportunity to renegotiate its contract with the Sabres.

Michael Hurley, a sports marketing consultant and former head of broadcasting and corporate sales for the NHL's Carolina Hurricanes, thinks it's likely HSBC will continue its relationship with the Sabres.

"I think there's still considerable value because of the interest in the team and connection to the community," said Hurley, president of Intangibles, a North Carolina-based marketing firm.

Like Narcise, Hurley thinks a more likely scenario is HSBC and the Sabres seeking new partners as part of its naming rights agreement. He said one possibility is new sponsors securing naming rights to specific sections of the arena's interior.

"That is something," he said, "that is becoming more and more prevalent."

Narcise, who has negotiated several naming rights deals, said he's familiar with HSBC's agreement in Buffalo and doesn't expect the bank to pull the plug.

He said that most naming rights deals have an "out" clause but that HSBC's commitment to the Sabres is about more than the bottom line.

"I think there's more of a civic question here," he said, referring to the bank's role, along with other companies, in keeping the team afloat when times were tough.

Of course, that wasn't always the case, and HSBC's naming rights became the root cause of a significant dispute.

In 1999, HSBC filed a breach-of-contract lawsuit against the Sabres, claiming the team refused to change the name of Marine Midland Arena to HSBC Arena. The Sabres countered by claiming its contract with the bank did not include the right to change the name.

The dispute arose as HSBC was changing the name of Marine Midland and its other groups and trying to increase its U.S. presence.

HSBC bought the naming rights to the arena for $15 million as part of a 20-year deal in 1995 and reportedly paid another $9 million five years later to settle the lawsuit and put its new name on the arena.

e-mail: pfairbanks@buffnews.com

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