"Snapdragon Stadium" Was Illegal, City Attorney Memo Says
It was an unprecedented marketing coup, according to advertising experts.
Ten days of free advertising for Qualcomm's new Snapdragon wireless chip, broadcast to the world by TV coverage of major pro and college football games played here last month.
Qualcomm Stadium was transformed into "Snapdragon Stadium", thanks to the administration of Mayor Jerry Sanders, a major beneficiary of campaign contributions from Qualcomm employees.
“Any where you have the big Qualcomm signage – in and around the parking lot, on the stadium, in the seating bowl -- we will replace the Qualcomm signage with new signage that says Snapdragon Stadium by Qualcomm with the Snapdragon logo,” Qualcomm spokesman Dan Novak told the Union-Tribune on December 9.
Added the paper:
"Sunday Night Football is one of the highest rated programs during any given week of the NFL season, said George Belch, chairman of the marketing department at San Diego State University. The college bowl games also draw significant TV viewers.
"The company won’t release specific costs, but Novak said the renaming effort will be less than the price of a 30-second commercial in the Chargers-Ravens game.
“I think it‘s clever,” Belch was quoted as saying. “They’ve sat on that stadium sponsorship all these years and really haven’t leveraged it that much. If you go back, it’s almost a philanthropic move they made.”
But just two days before that story appeared, the office of San Diego City Attorney Jan Goldsmith voiced a distinctly different opinion:
Qualcomm's name change gambit was not legal, and by implication could cost city taxpayers a substantial amount of money in the form of lost advertising revenue.
According to a December 7 memo from San Diego deputy city attorney Carrie L. Gleeson to Qualcomm Stadium marketing manager Mike McSweeney, "You have asked us to determine whether this proposal is legally permissible.
"Based upon the contract provisions governing Qualcomm's naming rights at the Stadium, and the City's Sign Ordinance, we conclude that it is not."
The memo went on to recount the history of the 1997 deal by which Qualcomm agreed to pay the city $18 million for twenty years of stadium naming rights.
"Under the Agreement, the City granted Qualcomm the exclusive right to name the Stadium, agreed to change all identifying and directional signage at the Stadium and within the City limits to 'Qualcomm Stadium,' along with maps, brochures, advertising, and other promotional or informational documents, and to rename 'Stadium Way' to 'Qualcomm Way.'"
"Qualcomm's proposal seeks to use the identifying signage to promote its new product without paying any additional consideration to which the City would otherwise be entitled.
"Qualcomm does not have that right under the Agreement.
"Per the Agreement, the content of the identifying signs is clearly limited to the name of the Stadium as "Qualcomm Stadium," and not subject to use for advertising."
"Putting aside the issue of whether such a change is really a change of name as opposed to advertising, any name change requires the prior written consent of the City authorized by a resolution of the City Council."
Added the memo:
"If Qualcomm desires to rename the Stadium to "Snapdragon by Qualcomm," even on a temporary basis, Qualcomm must first obtain the City's written consent authorized by Council resolution."
Gleeson said the plan also violated the city's long-standing ban on so-called off premise signs.
"By adding 'Snapdragon' to the exterior name signs at the Stadium, Qualcomm's proposal would convert signs that currently identify the Stadium and are consistent with the City's Sign Ordinance into signs that advertise a Qualcomm product and appear to be at odds with the City's Sign Ordinance.
"There is no dispute that the purpose of adding "Snapdragon" to the name signs is to advertise a new Qualcomm product."
"Aside from the fact that this conversion of use is not provided for in the Agreement, the addition of a product promotion appears to violate the restriction against offsite advertising."
"It has been suggested that because Snapdragon can be purchased using a mobile internet device while at the Stadium, that Snapdragon is available 'on-premises.'
"This rationale is based on a false premise: if Snapdragon is available for sale over the internet, then the internet is the location at which it is available, not the Stadium.
"To conclude otherwise would mean that advertising signs could be placed anywhere there is adequate internet reception for any product or service offered on the internet."
In conclusion, Gleeson wrote, "Qualcomm or its assignee may seek to change the name of the Stadium, but cannot effectuate such a change without the prior approval of the City Council.
"Qualcomm may, under the terms of the Agreement, purchase advertising at the Stadium, but it has no right to use the signage identifying the name of the Stadium for advertising.
"The purpose of the Agreement is to name the Stadium, not to sell advertising space.
"Even if under the terms of the Agreement and Signage Plan the parties could change the text of the name signs, the new text must comply with the City's Sign Ordinance, and may not include offsite advertising."
The city attorney opinion was made available pursuant to a request made under the California public records act. The city attorney's office said all other related documentation was exempt from disclosure under "the attorney-client communication and work product privileges" of the law.
More like this:
- How Qualcomm got a UCSD institute named after itself — Nov. 14, 2013
- Emails Show Snapdragon Deal Left Key Financial Official in the Dark — Feb. 1, 2012
- City Attorney Says Snapdragon Deal Void — Jan. 17, 2012
- Sanders Responds to Snapdragon Records Request — Jan. 6, 2012
- San Diego City Council's secret meetings about the Padres — Aug. 31, 2000