The Braves and Falcons are preparing to sell the names of their new stadiums to corporate sponsors, a task potentially complicated by having two Atlanta venues on the market at the same time.
The Braves’ deal with Cobb County and the Falcons’ deal with the city of Atlanta and the state allow the teams to sell naming rights for the partially publicly funded stadiums and to retain the revenue generated.
Both the Braves and Falcons have hired national agencies to help value and market the names, which the teams expect will fetch multi-millions of dollars annually and, over time, recoup a significant chunk of their private investment in building the stadiums.
Executives of both teams, in interviews with The Atlanta Journal-Constitution, described the process as in the early stages and not to the point of negotiations with any prospective naming-rights partners. Ultimately, they said, the partners could come from across town or across the globe.
“This is a critical deal, not just from the financial implications but from the partnership side,” Falcons president and CEO Rich McKay said. “You’ve got to make sure the partnership is right.”
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The stadiums, both scheduled to open in 2017, are being built with huge public expenditures. Over the course of 30 years, a combined $1 billion-plus of taxpayer money likely will go toward the facilities for construction, interest and maintenance costs.
While fans may make predictions on naming-rights partners — Coca-Cola Field or Home Depot Stadium, anyone? – such deals often come from off the radar.
For example, despite rampant speculation a Silicon Valley high-tech company would buy the name of the new San Francisco 49ers’ stadium in Santa Clara, Calif., the buyer turned out to be jeans maker Levi Strauss & Co.
Although the Braves’ and Falcons’ current homes, Turner Field and the Georgia Dome, are named for a person and a state, about three-fourths of the major pro sports stadiums and arenas in the United States are named for corporations. What’s unusual, though, is for two franchises in the same market to be offering new stadium names simultaneously.
“We are going to run into each other in the marketplace. That’s going to happen,” Falcons chief marketing and revenue officer Jim Smith said.
“The great thing about that is, it’s a big marketplace,” McKay added.
Braves executive vice president of sales and marketing Derek Schiller said it’s “interesting” both names are available, but “I think they are unique opportunities” likely to appeal to different companies.
Experts are divided on how the overlap will affect the sale efforts.
“It clearly hurts,” said long-time Atlanta sports marketing executive Bob Hope. “You have a lot of sports-sponsoring companies in Atlanta, so that is a positive. But selling naming rights is fairly complicated, and sometimes you end up with only one company willing to step up at the end of the day. Selling two, I would think, makes it doubly tough.”
But the publisher of industry newsletter Revenue from Sports Venues, Jim Grinstead, expects the teams to face no big problem.
“Both teams have strong brands,” he said. “I think in both cases they could command prices near the top of the market.”
In the NFL, where naming-rights values are driven by exposure to massive television audiences, top of the market means the New York Giants’ and Jets’ deal with MetLife for a reported $17 million to $20 million per year on their shared stadium, the Dallas Cowboys’ deal with AT&T for a reported $17 million to $19 million per year, and the 49ers’ deal with Levi Strauss for $11 million per year. Those three deals run for 20 years or more, putting the total value of each in the hundreds of millions of dollars.
“I think we should be well within that range,” the Falcons’ Smith said, noting that the retractable-roof downtown stadium also will host a Major League Soccer team and other marquee events.
The Braves are likely to be in a lower range, based on the naming-rights deals of Major League Baseball stadiums. While the New York Mets have a $20 million-per-year deal with Citigroup, the next largest in MLB is believed to be the Houston Astros’ $6.36 million annually from Minute Maid, a Houston-based unit of the Coca-Cola Co.
The Braves could be helped by the Cobb County stadium’s location near the heavily traveled intersection of Interstates 75 and 285, Grinstead said.
“Signage is a huge part of the price, and sitting there between two interstates gives the Braves a premium opportunity,” he said.
In addition to signage outside and inside the stadium, naming-rights deals typically include suites, tickets and video-board advertising.
The Braves also are counting on an adjacent mixed-use development to enhance the value of their stadium’s name.
“We believe a naming-rights partner will have some tie-in to the development, including signage and some form of (brand) activation area,” Schiller said. “Depending on who the naming-rights partner is, that might include retail space.”
Both teams have hired advisers with extensive experience selling naming rights around the country. The Falcons retained Premier Partnerships, based in Santa Monica, Calif., and the Braves hired Van Wagner Sports and Entertainment, based in New York.
“I think (the Braves’) mixed-use concept is far different than our effort to build a world-class, world-known stadium with multiple tenants,” Smith said. “There’s just really good, unique value propositions for both of us, which gives a potential partner great options to weigh.”
Usually, naming rights are sold to companies with headquarters or a major corporate presence in the venue’s city or region. In addition to Coca-Cola and Home Depot, major Atlanta-based companies that historically have bought sports sponsorships include UPS, Delta Air Lines, Georgia Power, SunTrust and Chick-fil-A, among others.
But the teams said they wouldn’t rule out companies based elsewhere, including overseas.
Hope said he doubts Pepsi, Lowe’s or other rivals of signature Atlanta-based companies will get their names on the buildings.
“Any rule can be broken, but historically deals of the stature of naming rights make sure nobody is being inappropriately embarrassed,” he said.
There’s no guarantee the teams will be able to make deals before the stadiums open. An MLB stadium in Washington, which opened in 2008, still hasn’t sold its name. The Cowboys didn’t land their deal until four years after the stadium opened.
“You can find that you just can’t make the deal that works for (a partner) and works for you,” McKay said.
The teams insist they won’t approach the name game as an intra-city competition. In fact, the Falcons’ Smith said he hopes the Braves’ Schiller gets $20 million a year “to give us a good comp in the marketplace.”