SBD/January 13, 2011/Facilities

Is NBA Kings' Arena Deal With Power Balance Risky Business?

The NBA Kings' new arena naming-rights deal with Power Balance is “raising eyebrows in the sports-business world,” according to Dale Kasler of the SACRAMENTO BEE. It is a “marriage between a major league sports franchise and an up-from-nowhere manufacturer of wristbands that are trendy but not universally known.” For Kings Owners the Maloofs, the contract with Power Balance “extends the family's strategy of catering to the cool, hip and not necessarily mainstream.” Kings President of Business Operations Matina Kolokotronis said, "It's a unique opportunity to brand with somebody young." Kings co-Owner Joe Maloof said, "I have all the confidence in the world in the company. I think they offer a great product." He added, “It's a fine young company and they're on their way." Maloof “wouldn't disclose the deal's financial terms,” but said that it is “more lucrative than the expiring contract with Arco, which pays a reported $750,000 a year.” Maloof: "It starts at a certain amount and it ratchets up. Over the course of the five years, it's considerably more (than the Arco deal)." The deal, effective March 1, allows Power Balance to sell its products at the arena, the Palms Casino Resort in Las Vegas and "other venues in cooperation with the Maloofs." NBA Senior VP/Basketball Communications Tim Frank noted that Power Balance also is "one of many official NBA ‘product licensees’" But Kasler writes one issue is Power Balance’s “claims about its products' benefits.” Team Services Principal E.J. Narcise said, "It has a gimmicky feel to it. A lot of folks don't take the product seriously. … This could be a very embarrassing situation for the Kings" (SACRAMENTO BEE, 1/13).
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