SBD/May 9, 2013/Facilities

49ers Ink 20-Year, $220M Naming Rights Deal For Newly Minted Levi's Stadium

Levi Strauss beat out 31 other companies for the 49ers' stadium naming rights
Levi Strauss will pay $220.3M over 20 years to the city of Santa Clara and the 49ers for the naming rights to the team's new $1.2B stadium, with the "option of extending the deal for another five years for an additional $75 million or so,” according to a front-page piece by Mike Rosenberg of the SAN JOSE MERCURY NEWS. The total contract, which “averages out to about $11 million per year in the first two decades, is believed to be at least the fourth-highest in NFL history.” Levi Strauss “beat out 31 other interested companies from around the world -- including three to five unnamed corporations that were in the final stages of negotiations.” The company “offered the most money, as well as proven financial success ... something lacked by a lot of the young Silicon Valley tech companies that were interested.” The team also “loved the short, clean feel of the Levi's Stadium name.” Levi’s has been “promised four huge signs around the stadium, a pair of 50-yard-line luxury suites, 52 club seats, access to host four events a year at the stadium and plenty of perks that come with joining the family of an NFL team.” The company can call on players to “woo customers and have coach Jim Harbaugh come in to pump up employees.” The 49ers and CAA have been “negotiating with Levi's since December.” Santa Clara city officials “endorsed the Levi's deal in principle over the past week and are expected to give a formal green light" tonight during a City Council meeting. The Santa Clara Stadium Authority will get $154.2M over the 20-year deal, starting with $5.7M when the stadium opens in August ‘14 and “increasing 3 percent annually” to $10M in ‘33. The 49ers will get $66.1M, starting with $2.5M next year and increasing to $4.3M in ’33. The team also will sign an "additional sponsorship agreement with the company that goes beyond the naming-rights portion of the deal.” (SAN JOSE MERCURY NEWS, 5/9). 49ers CEO Jed York said that the “timing of the stadium naming-rights deal and the upcoming vote of league owners” on host sites for Super Bowls L and LI is a "coincidence” (CSNBAYAREA.com, 5/8).

A SPONSOR WITH LEGS: York this morning noted the team had a "lot of interest from a lot of different folks, and we said all along we wanted to make sure that it was the right fit." York: "When you look at Levi's, they’ve been outfitting 49ers since they began in 1853 and started with blue jeans in 1873." He added Levi's "saw that this is going to be a showcase stadium of innovation throughout the Bay Area." York: "We’ve got some great tech partners, we’ve got some great partners all across the board, and this is a great way for us to connect with our fans" ("NFL AM," NFL Network, 5/9). AD AGE’s Michael McCarthy noted Levi’s is a “more natural fit" for the stadium name than a "dot-com or company that made expensive cables.” The 49ers and the NFL “likely don’t have to worry about their naming rights sponsor going bankrupt after a denim bubble pops.” IEG Senior VP/Content Strategy Jim Andrews: “You don't see many apparel companies with their names on stadiums and arenas. But it does a couple of things for Levi's. They're a heritage brand -- and part of that heritage is being from San Francisco. This plays that up big time.” However, Baker Street Advertising Exec VP & Exec Creative Dir Bob Dorfman said, “I just assumed they wanted to sign a sponsor based in Silicon Valley, not San Francisco, for the naming rights” (ADAGE.com, 5/8). In S.F., Matier & Ross write the “selection of an old-line San Francisco apparel brand over a Silicon Valley company is a bit of a surprise, given the emphasis the team has placed on making its new stadium state-of-the-art” (S.F. CHRONICLE, 5/9). ESPN.com’s Mike Sando wrote the 49ers “likely won't have an unpleasant name change forced upon them, as the case was when CenturyLink overtook Qwest, affecting the Seahawks' stadium brand” (ESPN.com, 5/8).
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