SBD/Issue 59/Facilities & Venues

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  • Mercedes Buys Naming Rights To New NBA/AEG Arena In Shanghai

    Mercedes' 10-Year Naming-Rights Deal
    For Shanghai Arena A First In China
    The joint NBA/AEG venture has "sold China's first arena naming-rights deal to Mercedes-Benz, an agreement that puts the luxury automaker's name atop the new Shanghai arena," according to Lombardo & Muret of SPORTSBUSINESS JOURNAL. Financial terms of the 10-year deal were not disclosed, but AEG said that it is "commensurate with other naming-rights contracts it has done." An industry source estimated the deal at about $6M annually. The Shanghai arena will open next year as the city hosts the World Expo, with AEG and the NBA to "take over management of the 18,000-seat multipurpose facility in 2011." The Shanghai development also includes a "six-screen movie theater, an ice skating rink, a bowling alley, a live music club and 20,000 square meters of retail space." Shanghai Oriental Pearl Group also is an investor in the project. Mercedes will receive "typical in-arena signs" as part of the agreement, as well as a "sales center built within the facility" and cars on display throughout the arena concourses. Discussions also are "under way for the manufacturer's high-end Maybach brand to sponsor" the arena's exclusive "Chairman's Club" (SPORTSBUSINESS JOURNAL, 12/7 issue). 

    ASIA MAJOR: NBA Int'l President Heidi Ueberroth indicated that "preseason NBA games and other basketball events such as WNBA games will be held at the Mercedes center," which will be "about the same size" as Staples Center and MSG. Ueberroth: "This is absolutely an NBA-level arena." AEG President & CEO Tim Leiweke said that the company will "manage and book the facility," and he expects that it "will be used mostly for sporting competitions and regional and national Chinese entertainment acts." He contends that the arena's "saucer design by Shanghai Xian Dai Architectural Design Group Co. will catch attention." Leiweke: "This is going to be one of the most famous, if not the most famous, arena designs in the world" (L.A. TIMES, 12/7). In N.Y., Richard Sandomir reports the deal is worth $75-100M over its 10-year contract length. The size and location of the deal are "significant because the recession has rendered the naming-rights market dormant." Mercedes said that buying the naming rights is "part of a plan to help develop arts and sports in China." But Sandomir notes it is "also a strategy to continue to sell cars in a crucial market." Mercedes-Benz China President & CEO Klaus Maier said the automaker's 50,700 vehicle sales in China through the first nine months of this year are up 55%, making it the "fastest growing luxury brand in the market." But Helios Partners President Chris Renner questioned "whether Mercedes-Benz could get full value out of its investment" in the Shanghai arena. Renner: "It's going to require 50 to 60 big events for it to get their return on investment. What works in L.A. with the Staples Center doesn't necessarily work in Beijing or Shanghai and they're slowly learning that" (N.Y. TIMES, 12/7).

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  • Massachusetts Pulls Funding For Gillette Stadium Footbridge

    Massachusetts Gov. Deval Patrick's administration is removing a planned $9M footbridge next to Gillette Stadium "off its list of federally funded stimulus projects, but still supports finding other public money for the project," according to Noah Bierman of the BOSTON GLOBE. The state pulled the plug on funding for the bridge, as well as two other projects, because Massachusetts transportation officials "worried they would not be 'shovel ready' by the end of February, a federal requirement for stimulus projects." The bridge had "threatened to become a political issue" for Patrick, who is up for re-election next year, because it "connects two private parking lots owned" by Patriots Owner Bob Kraft. Critics questioned why the state was "dedicating money to a private venture and worried it would have little public benefit on days there were no events at the stadium." The bridge, which was among a "small group of stimulus projects specifically targeted to benefit private development," now will "probably have to depend on a separate pot of state economic development money" (BOSTON GLOBE, 12/5). In Boston, Jay Fitzgerald wrote Patrick's willingness to use funds for the footbridge "shows the extent the governor will go for a big donor and pal" like Kraft. Both Kraft and his wife, Myra, "maxed out on contributions" to Patrick's campaign committee prior to a vote last month that initially led to funding for the footbridge construction (BOSTON HERALD, 12/5).

    YOU CAN GO YOUR OWN WAY: The BOSTON GLOBE's Charles Pierce in an open letter to Kraft wrote, "You should build your own footbridge so people can walk from your stadium to parking lots across the road, and you shouldn’t be getting help from Deval Patrick or any federal stimulus money to do it" (BOSTON GLOBE, 12/6). Meanwhile, in Boston, Dan Shaughnessy writes, “What a week for Bob Kraft. His team got undressed on 'Monday Night Football,' his $9 million federally funded bridge deal was shelved Friday, and yesterday the Patriots blew a 14-0 lead and dropped a 22-21 decision to the not-very-good Miami Dolphins. Ouch” (BOSTON GLOBE, 12/7).

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  • Facility Notes

    In Nashville, Brad Schrade noted a week after Predators Owner David Freeman's "tax problems came to light as the team sued the Sommet Group over its naming rights partnership," Sommet Group's "own tax problems have surfaced." The company "had a $337,161 lien filed by the IRS in Williamson County on Oct. 6." Sommet Group CMO Jeff Sowell said that he "didn't know specifics of the lien, but the firm is 'absolutely not' in any kind of financial trouble." Sowell: "It has nothing to do with the naming rights issue." A Predators exec Thursday said that Sommet Group has "contacted the team ... to try to work out an agreement." They "plan to try to negotiate some sort of agreement to continue to call the hockey arena Sommet Center" (Nashville TENNESSEAN, 12/5).

    ENVIRONMENTAL AWARENESS: A SAN DIEGO UNION-TRIBUNE editorial stated of a possible new stadium for the Chargers in downtown, "Forget about the difficulty of assembling financing. It could be years before the parties involved agree on cleanup. Even if that is resolved, pollution problems are just what foes of a stadium proposal need to tie the case up in legal knots with strict environmental laws. You know -- the same ones the Industry stadium gets to ignore. Any notion that the Legislature might be persuaded to give San Diego the special environmental exemptions it gave [Majestic Realty Chair & CEO Ed] Roski ... is a pipe dream. It is impossible to contemplate these developments and not wonder whether the Chargers' days in San Diego are numbered" (SAN DIEGO UNION-TRIBUNE, 12/6).

    WAITING TO IMPLODE: In Dallas, Brandon Formby noted a "major food company wants to sponsor" the implosion of Texas Stadium and "turn the right to push the detonator into a nationwide contest." But the company "doesn't want the world to know who it is unless a deal is struck." Irving City Council members "want a pact to bring the city the biggest financial and advertising bang possible." But while the city owns the stadium, the Cowboys "retain near-total control of the use of Texas Stadium's name." Cowboys Dir of PR Rich Dalrymple said that he "wasn't sure where the city and team are in the process of negotiating the use of the stadium's name." But Irving officials said that they are "confident the team will sign off" (DALLAS MORNING NEWS, 12/6).

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