SBD/January 12, 2011/Facilities

NBA Kings Ink Arena Naming-Rights Deal With Power Balance

Arco Arena will be known as Power Balance Pavilion beginning March 1

Maloof Sports & Entertainment yesterday announced a five-year deal for sports bracelet-maker Power Balance to take over naming rights for the NBA Kings' arena. Arco Arena will be known as Power Balance Pavilion beginning March 1. The agreement also includes local retail incentive programs and integration across Kings Owner the Maloof family's portfolio of properties and events. Financial terms of the agreement were not disclosed (MSE). In Sacramento, Dale Kasler notes Arco, which is "ending its 25-year relationship with the organization," has been "paying about $750,000 a year for the building's naming rights." Kings co-Owner Joe Maloof said the Power Balance deal is a "big win for the franchise" and a "positive development all around." Maloof: "Everybody was telling us we could never get it done." But Kasler notes the deal "could carry some public-relations risk for the Kings." Power Balance is "small but fast growing" and is "favored by NBA players and other athletes." But it "has been forced to defend its claims that its $29.95 silicone wristbands 'work with your body's natural energy field' to enhance strength and athletic ability." Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard said that if the "controversy endures, it could hurt the Kings." He noted by selling naming rights to Power Balance, the Kings are "endorsing that product." Swangard: "You've got to be careful about that stuff" (SACRAMENTO BEE, 1/12). YAHOO SPORTS' Eric Freeman sarcastically wrote, "Nothing will make the Kings seem more legitimate than aligning themselves with a company that used to trust in junk science" (SPORTS.YAHOO.com, 1/11).

WHAT'S THE DEAL? BLOOMBERG NEWS' Michele Steele reports the Power Balance agreement is a "multimillion-dollar deal that surpasses the yearly value of the Arco contract." Steele: "The team could make more money on the deal, (Joe) Maloof tells me, depending on how retail sales of those (Power Balance) bracelets goes in the arena." Maloof: "Arco told us about four months ago that they weren't going to extend the relationship, and in four months, we were able to find one. It was unbelievable. We found a great partner, and it's a multimillion-dollar deal. It was pretty easy, even in these difficult times." Meanwhile, Steele notes Power Balance recently admitted that "no credible scientific evidence exists that it actually improves energy or balance." Steele: "A lot of people are saying that possibly there is bad PR here, but they are obviously making moves to be more credible in the sports business space" ("In The Loop," Bloomberg TV, 1/12).

TEST CASE FOR SMALLER MARKETS: Sacramento Mayor Kevin Johnson at a State of Downtown breakfast yesterday said NBA Commissioner David Stern told him if the Kings "can't make it work in Sacramento, then he doesn't know if mid-sized markets around the country are going to make it." Johnson: "We are carrying the baton for mid-sized markets." In Sacramento, Ryan Lillis notes the Maloofs "have said for months they need to look at other options outside of Sacramento for the Kings." Johnson said it was "good business" and "not new to me" that the Maloofs would explore other cities (SACRAMENTO BEE, 1/12). Joe Maloof yesterday said, "We want to concentrate on Sac, get it done here. We really do have to get attendance up. That's critical and we know we have to have a better team." He added, "The state of the union is this: Our suite sales are doing very, very well. We're doing well on our sponsorships and partnerships. Not great, but north of last year. We've worked really hard at picking up some local companies, like UC Davis. So in two of the three areas, we're doing fine." More Maloof: "We've seen the best and the worst, and I'm ready to start winning again. This (naming rights deal) is a positive thing for us. That's what people want to hear. They're tired of all the negative" (SACRAMENTO BEE, 1/12).

MOVING DOWN THE COAST? KFBK-AM's Rob McAllister cited sources as saying that the Maloofs have met with Ducks and Honda Center Owner Henry Samueli about potentially relocating the franchise to Anaheim. The two sides "met early in 2010, but the Maloofs were not willing to accept a deal." However, the two sides recently "met again," and Joe and Gavin Maloof "are more open to striking a deal." The plan "includes moving the Kings to the Honda Center in Anaheim," and Samueli giving the Maloofs $100M "to pay off some debt as well as help pay off the territorial rights to the Clippers and Lakers." If the Maloofs "default on that loan, then Samueli would assume some control of the team" (KFBK.com, 1/11).

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