On Monday, December 8, 2014 at the Committee of Whole meeting Nanaimo council will vote to proceed with a Sponsorship Program. What is ‘Sponsorship’? How does it work?
The City of Nanaimo would like to make some money. How does it plan to do this? By selling ‘naming rights’ or get corporations to sign a ‘sponsorship agreement’.
Sponsorship differs from gifting. In the past when companies gave donations or provided grants and gifts typically it was understood that no compensation was expected.
In a sponsorship agreement the corporate sponsor expects a return on investment.
At the November 5, 2014 Culture and Heritage Commission meeting, the C&H commission passed a motion recommending that Council approve the Corporate Sponsorship Policy for the City and have staff develop a separate Naming Rights and Advertising Policy.
The Draft document so far suggests that council approve sponsorships over $75,000 and anything under would be approved by the City.
Questions that arise about a Sponsorship Program:
- what facilities would be considered for renaming?
- would the City be seen as endorsing the products, services or ideas of the sponsor corporation?
- would this require a new position such as a Sponsorship Coordinator?
- would the City have to hire an outside ‘sponsorship company’?
- what about public consultation on naming rights?
NEDCOR (Nanaimo Economic Development Corporation)
Is the City going to task NEDCOR to look into a Sponsorship Program? They are out and about marketing Nanaimo. Taxpayers already pay approximately $1.5 million a year for NEDCOR. Would this be something NEDCOR could handle?
Lessons from Ottawa
It has been about two years since the City of Ottawa decided to get into Naming Rights or the ‘sponsorship game’. Ottawa awarded the Sponsorship Program contract to a company that specialized in public sector marketing. The company receives a percentage—between 10% to 20%—of all the deals.
So far after two years the company has helped the City of Ottawa earn just under $200,000 per year. The City had been expecting millions of dollars in return.
After 11 years of investigation, the RCMP have charged Jacques Corriveau for setting up a kickback system on contracts awarded during the sponsorship program in Quebec. Which brings a cynical question. Are Sponsorship Programs a convenient yet convoluted way of getting away with forgery and laundering dirty money?
Rather than hiring a sponsorship coordinator it would be prudent for the city to first hire an in-house lawyer. It seems ludicrous that the City has no legal council on staff when everything has to do with the law. In the meantime, Nanaimo taxpayers have paid millions of dollars in lawsuits that could have been avoided in the first place.