49ers closing in on naming rights partner for Santa Clara stadium

49ers closing in on naming rights partner for Santa Clara stadium
April 9, 2013, 4:45 pm
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With the construction efforts in Santa Clara in full stride, the 49ers are in the midst of finding a naming rights partner.

Word on the sponsorship street is that the San Francisco 49ers are closing in on a naming rights partner for their new stadium in Santa Clara. I am hearing that three companies are in the hunt for a long term deal in the neighborhood of $12-14 million a year.The rights are being sold by the 49ers with assistance from Creative Artists Agency (CAA). The Santa Clara Stadium Authority is working with the team and its partners in overseeing the revenue generating process.

A naming rights deal of this magnitude is targeted as one of four major income streams to repay the loan of $850 million dollars negotiated to help cover the $1.2 billion dollar cost of the 68,500-seat stadium due to open in 2014.

Key income streams for financing the stadium are coming from:

1.) Premium Seating- the sale of premium seating composed of suites, club seats and lower bowl seats on either side of the 50 yard line.

2.) Stadium Builder Licenses (SBLs) -seat licenses, which give fans the right to own their seat locations and buy season tickets over a certain number of years.

3.) Naming Rights- should be the second largest revenue stream after SBLs.

4.) Founding Partners- The 49ers will generate tens of millions of dollars from the sale of “Founding Partner” stadium sponsorships. Seven founding partners have signed up in deals that include both cash, hardware, services and new technologies. Calculating exactly how much they are worth to the 49ers bottom line is difficult to define without seeing the actual contracts.

The current line up includes solar technology provider NRG Energy, networking solutions company Brocade, business management software giant SAP, Sony, data storage provider Violin Memory, Budweiser’s Bud-Lite brand and solar panel maker SunPower.

Up to this point there are no “Founding Partners” from the banking, insurance or automotive sectors, which have proven the most reliable sectors for stadium naming rights.

Other sources of funding for the stadium development included a $200 million dollar loan from the NFL and $80 million dollars in infrastructure and the relocation of public utilities from the City of Santa Clara.

SILICON VALLEY IS THE GLOBAL HQ FOR INNOVATION

The Silicon Valley is a complex place when it comes to  prospecting for major sports sponsorships. Just because companies are sitting on mountains of cash doesn’t mean they are interested in their local pro team. Tech giants don’t  have a history of spending big money on sport. Global Silicon Valley brands are more concerned with growth markets in China, Europe, South America and India.

Silicon Valley has shown support for venue naming rights in the Bay Area with HP Pavilion and Oracle Arena. Cisco Systems signed a 30-year contract at $4 million a year for the naming rights to Cisco Field, the proposed ballpark in Fremont for the Oakland As.

THE VENUE MONOPOLY GAME IN NORTHERN CALIFORNIA

Naming rights opportunities for major venues in California may provide the corporate sector a tasty buffet of selections in order to satisfy their financial and branding appetites in the coming years. Public-sector funding for sports facility builds in the state has decreased or ceased altogether, putting an increased onus on corporate support.

1.) Santa Clara Stadium is under construction and set to open in 2014 and will be awarded the Super Bowl in 2016 or 2017. The naming rights have yet to be sold.

2.) The San Jose Earthquakes have broken ground on a new $70 million dollar soccer specific stadium in San Jose. The naming rights have yet to be sold.

3.) The owners of the three Oakland based pro teams are all looking for new homes.

The Warriors are planning to build a new $800 million waterfront arena in San Francisco’s Embarcadero by the beginning of the 2017-18 NBA season. The A’s continue to voice their desire to move to San Jose and build a new downtown baseball park.

The Raiders have passed on becoming co-tenants of the new 49ers stadium and speak in non-specific terms of finding a new location for a proposed new stadium.

4.) The Sacramento Kings are caught in a tug of war between Seattle and Sacramento where two ownership groups are vying for the NBA’s approval to purchase the franchise from the Maloof family. Both groups have agreements with city leaders to build new arenas.

5.) The San Diego Chargers have been searching for a funding solution for their planned downtown stadium for the past several years without any major movement.

Success on the field is all about timing and the 49ers' magnificent turnaround over the past two seasons is boosting the revenue generating engine represented by the new stadium. As Candlestick Park memories fade after the end of the 2013 season, who will remember the corporate names that were attached to the Wind Machine. Do you remember Monster Park or 3Com?

As the Niners continue their quest to add a sixth Super Bowl, the corporate name of the new stadium will be branded into our sports consciousness.

CURRENT STADIUM NAMING RIGHTS DEALS

Stadium Name

Market

Brand

Total value

Duration (years)

Value Per year

Term

Sector

Farmers Field

Los Angeles

Farmers Insurance

$600m

30

$20.0m

TBD

Insurance

MetLife Stadium

East Rutherford, N.J.

Metropolitan Life Insurance

$400m

25

$17.5m

2011-2036

Insurance

Citi Field

Queens, N.Y.

Citigroup

$400m

20

$20.0m

2028

Banking

Reliant Stadium

Houston

Reliant Energy

$310m

31

$10.0m

2032

Energy

Gillette Stadium

Foxboro, Mass.

Gillette

$240m

15

$8.0m

2031

Personal care

FedEx Field

Landover, Md.

FedEx

$205m

27

$7.59m

2025

Logistics

University of Phoenix Stadium

Glendale, Ariz.

Apollo Group

$154.5m

20

$7.72m

2006-2026

Education

Bank of America Stadium

Charlotte

Bank of America

$140m

20

$7.0m

2003-2023

Banking

Lincoln Financial Field

Philadelphia

Lincoln National

$139.6m

20

$6.98m

2002- 2022

Insurance

Lucas Oil Stadium

Indianapolis

Lucas Oil Products

$121.5m

20

$6.07m

2007-2027

Petroleum

First Energy

Cleveland

FirstEnergy

$102m

17

$6m

2013-2030

Energy

M&T Bank Field

Baltimore

M&T Bank

$79m

15

$5.0 m

2002-2017

Banking

CenturyLink Field

Seattle

CenturyLink

$75m

15

$5.0 m

2019-2024

Telecoms

Sports Authority Field at Mile High

Denver

Sports Authority

$60m

10

$6.0 m

2035

Retail

Heinz Filed

Pittsburgh

Heinz

$57m

20

$2.85

2001-2021

Food

Mercedes Benz Superdome

New Orleans

Mercedes Benz

$50m-$60m

10

$5.0m-$6.0m

2011-2021

Automotive

Raymond James Stadium

Tampa

Raymond James

$54.9m

18

$3.05m

1998-2016

Financial Services

Ford Field

Detroit

Ford

$50m

20

$2.5m

2002- 2022

Automotive

Edward Jones Dome

St Louis

Edward Jones

$42.3m

11

$3.85m

2014-2025

Financial Services

Sun Life

Miami

Sun Life

$37.5m

5

$7.5

2010-2015

Insurance

LP Field

Nashville

Louisiana-Pacific Corporation (LP)

$30m

10

$3.0m

2006-2016

Building Products

Qualcomm Stadium

San Diego

Qualcomm

$18m

20

$0.9m

1997-2017

Telecoms

Everbank Field

Jacksonville

Everbank

$16.6m

6

$2.75m

2010-2014

Banking

O.co Coilseum

Oakland

Overstock.com

$7.2m

6

$1.2m

2011-2017

Online retail