Record price for stadium naming rights is $100 million
By Tom Barnes, Post-Gazette Staff Writer
This is the third in a series of articles taking a closer look at ''Plan B,'' the financing mechanism proposed by Pittsburgh and Allegheny County officials to pay for new baseball and football stadiums and the expansion of the David L. Lawrence Convention Center.
Today's installment is about the sale of naming rights to the stadiums.
Q: What's in a name?
A: Money, obviously. It usually goes to whoever owns the stadium, which can be the owner of the team that plays there, or a city or county or other governmental entity.
For the company that shells out big bucks to plaster its name on a building, there's prestige and a quick route to name recognition around town, since the stadium name is frequently mentioned in news stories and in places where fans gather.
That's a major reason why Allegheny Energy wants to put its name on the Civic Arena, changing it to the Allegheny Energy Dome. That six-year, $5 million deal is still being negotiated with city and county officials. If state regulators approve, Maryland-based Allegheny Energy would merge with DQE Inc., parent firm of Duquesne Light Co. Allegheny Energy wants to heighten its name recognition in the Pittsburgh area and figures a high-profile building like the Igloo is one way to do it.
In Philadelphia, one of the first things North Carolina's First Union Bank did after buying CoreStates Financial was to change the name of the CoreStates Center, where the city's hockey and basketball teams play, to First Union National Center -- FUN Center, get it? -- to increase its name recognition.
Q: How much has been paid in other cities for naming rights to stadiums and arenas and how long are the deals for?
A: Amounts of money and lengths of deals vary widely, as do the number, size and locations of signs the buyer gets, so it's difficult to make accurate comparisons.
In a deal that is the current record holder, Staples office products company is paying $100 million over 20 years -- a hefty $5 million per year -- to put its name on a planned arena that will house two Los Angeles teams, the basketball Lakers and hockey Kings.
In Milwaukee, Miller Brewing Co. will pay $41.2 million over 20 years to name the city's new baseball stadium Miller Park. In Phoenix, Bank One is paying $86 million over 30 years to put its name on the Arizona Diamondbacks new baseball park. Many other naming-rights deals are not so lucrative, however. See accompanying chart for other examples.
Q: Are naming rights generally sold to the highest bidder?
A: Yes, since money has become such a pivotal factor in the operation of sports teams. But there can be exceptions, such as when emotional factors are considered. For example, in Cincinnati the new Bengals facility is to be called Paul Brown Stadium, after the team's founder. Similarly, the Steelers want to name their new stadium for team founder Arthur J. Rooney (see following question.)
Q: Who gets the money paid by a corporation to put its name on a stadium?
A: It's usually whoever owns the stadium, meaning whoever is paying off the construction bonds sold to build it. That can be a team owner or a unit of government.
No one so far has yet said what will happen in Pittsburgh. The Pirates may get much, if not all, of the money paid for the name of the new baseball stadium, which now carries the generic moniker of ''Pirates Park.''
Whatever amount is paid for naming rights could be used to help Pirates Managing General Partner Kevin McClatchy put together his $35 million private commitment toward the expected $228 cost of the new ballfield.
But whether the fee goes to McClatchy or to the city, the money is ultimately expected to be used to help pay off the bonds sold to build the stadium.
The situation could be different with the Steelers. Team owner Dan Rooney wants to name the new football facility the Arthur J. Rooney Stadium, in honor of his late father, who founded the team in 1933. County Commissioner Bob Cranmer has said Dan Rooney should pay for the privilege of putting his father's name on the $233 million stadium.
Cranmer said the naming-rights fee paid by Rooney should be over and above his previously promised commitment of $50 million. Exactly what happens depends on negotiations between the city, county and teams.
Q: Who might buy the name of the Pirates ballpark?
A: The Pirates have had discussions with PNC Bank and other companies regarding the naming rights. If PNC is the winner, it may call it PNC Park. Neither bank officials nor the Murphy administration will comment or give a potential price for the naming rights.
The types of companies usually interested in naming rights include banks, airlines, utilities and firms involved with technology and telecommunications, said Marc Ganis, a Chicago sports consultant working with Allegheny County on the stadium deals here.
Q: Are there brokers specifically in the business of naming rights?
A: Sometimes, on a case-by-case basis. Ganis was retained for negotiations regarding the naming of the St. Louis stadium where the Rams play, called TransWorld Dome. Also, there is a New Jersey company called Integrated Sports International that works on stadium naming-rights deals, as does the Wilkinson Group of San Francisco, which brokered the deal to name that city's new baseball field Pacific Bell Park.
Q: Is there any downside to a company putting its name on a stadium?
A: Not as long as nothing goes wrong at a stadium and the public relations value remains strong.
A stadium name that could be perceived as ''anti-family entertainment,'' such as a cigarette or liquor maker, might boomerang, said Sean Brenner, who edits Team Marketing Report, a sports industry newsletter in Chicago.
Also, he said, there might be some backlash from fans over the changing of a longtime name, such as Candlestick Park in San Francisco, to 3Com Park.
''But every company we talk to reports that (backlash) diminishes over time and is overshadowed by the tremendous exposure these deals get,'' Brenner said.
A corporation could have concerns if a stadium has physical problems -- as when ceiling tiles fell at the Seattle Kingdome or there were concrete problems at the Montreal Expos baseball stadium -- or embarrassing things happen, as when a couple was seen making love in a glassed-in hotel suite on the top level of the Toronto Skydome.
''If there were a shooting or a riot in a stadium, you don't want to have your (company's) name associated with it,'' consultant Ganis said.
Do you have questions about the components of Plan B? If so, send them to Dissecting Plan B, c/o Local News, Pittsburgh Post-Gazette, 34 Blvd. of the Allies, Pittsburgh, PA 15222.