Nonprofit Hospitals Invest Millions in Stadium Naming Rights Prompting Public Debate

Across the United States, various nonprofit hospital systems are allocating millions of dollars to secure naming rights for sports stadiums and arenas, a trend that has raised questions about the priorities of these healthcare organizations. While these deals are often seen as a way to boost community presence and enhance institutional recognition, critics argue that the funds spent could be better directed toward improving access to medical care, especially given the financial challenges faced by many hospitals.

Hospitals in states including California, Florida, Georgia, Indiana, New York, North Carolina, Pennsylvania, and Tennessee have purchased naming rights at prominent sports venues. The evolving interest of healthcare providers in entering the sponsorship space reflects a broader marketing strategy, according to Angeline Close Scheinbaum, a sports marketing professor at Clemson University. She and her colleague, Russell Lacey of Xavier University, are studying how sponsorship investments in stadiums are increasingly infiltrating the healthcare sector.

However, these sponsorships, particularly involving nonprofit hospitals, have sparked controversy. Unlike for-profit entities, nonprofit hospitals benefit from tax exemptions but are mandated to give back to their communities through free or discounted care and working in underserved areas. Critics argue that spending large sums on stadium branding contradicts their community-oriented mission. Some local officials contend that such expenditures divert funds from core healthcare services, especially when hospitals depend heavily on government funding and public donations.

A case in point is Erlanger Health System in Chattanooga, Tennessee. The hospital signed a deal to name a new minor league baseball stadium 'Erlanger Park,' with reports indicating that Erlanger would cover the stadium's annual lease of approximately $1 million. Chattanooga Mayor Weston Wamp expressed disappointment, emphasizing that the hospital’s priorities should focus on addressing severe nursing shortages and maintaining quality care. Despite the criticism, Erlanger’s leadership defended the sponsorship, asserting that it offers valuable community engagement opportunities and enhances their brand recognition.

Supporters argue that stadium naming rights can foster a sense of community and connect healthcare providers more deeply with local populations. Scheinbaum compares this strategy to a local doctor sponsoring Little League teams, highlighting how such visibility can serve as an economic and social signal of strength.

Nevertheless, skeptics question whether this approach is appropriate, especially when hospitals are reliant on public resources. For example, Valley Children's Healthcare in California faced backlash after securing a decade-long, $10 million deal with Fresno State University for stadium naming rights. Critics argued the funds could be better used for patient care, while hospital officials maintained that the expenditure was part of their marketing budget and aimed at increasing organizational recognition.

The debate extends beyond individual cases. Ohio-based Bon Secours Mercy Health paid over $4 million for sports arena sponsorship in South Carolina, drawing congressional scrutiny over its use of federal funds and reimbursement practices. Similarly, Parkview Health in Indiana has faced criticism for its high hospital costs while actively sponsoring a local minor league team. In Louisiana, discussions are underway for Our Lady of the Lake Regional Medical Center to pay up to $50 million over ten years to acquire the rights to name a new arena at Louisiana State University.

Experts like Scheinbaum suggest that, when executed thoughtfully, sports sponsorship can be a valuable marketing tool for healthcare systems. Effective programs might include health-related educational events during games or community outreach initiatives. Such partnerships can merge marketing with community service, promoting health and wellness in engaging and meaningful ways.

The relationship between sports and healthcare isn't new; many hospitals have long partnered with athletic teams as official health providers for athletes at various levels. Scheinbaum notes that this synergy stems from a natural connection—sports serve as a powerful cultural phenomenon, making them an ideal platform for health promotion and community engagement.

Ultimately, the decision for hospitals to invest heavily in stadium sponsorships involves balancing marketing benefits with responsible stewardship of community resources. When used strategically and with genuine community impact in mind, sponsorships can reinforce a hospital’s presence and commitment within its local area.