SBD/June 6, 2013/Facilities

San Jose Signs Off On SAP's Five-Year Naming-Rights Deal For Sharks' Arena

HP wanted out of the deal because of a wider evaluation of its branding efforts
HP Pavilion will "soon officially be known as the SAP Center at San Jose," as city officials have finalized a five-year deal with the German software company that was co-founded by team Majority Owner Hasso Plattner, according to John Woolfolk of the SAN JOSE MERCURY NEWS. A city council vote on the matter was "expected to be scheduled for June 18 at a committee meeting" yesterday afternoon. SAP showed interest in the naming-rights after HP CEO Meg Whitman reportedly was "seeking an early exit from the deal." The city of San Jose would receive $1.675M annually, for a total of $8.375M "over the term of the deal." HP under the current deal is paying $3.25M per year for the naming rights through '15. The Sharks and the city, which owns the arena, "split the proceeds," which provides $1.625M for each. San Jose Mayor Chuck Reed's Public Information Officer Michelle McGurk said that the new deal is "essentially the same for SAP as with HP, adding a couple extra years to the contract." San Jose "reached a naming rights deal for the arena in 2000 with computer maker Compaq," and HP "inherited that deal when the company acquired Compaq in 2002" (SAN JOSE MERCURY NEWS, 6/6). ALL THINGS DIGITAL's Arik Hesseldahl noted HP "wanted out of the naming rights agreement as the result of a wider evaluation of its global marketing and branding efforts." The deal was "essentially pocket change" for HP, but "perhaps less useful in a world where personal computers ... are selling at historically low levels." HP will "still have access to the arena" and to Sharks games. Sources said that the company "intends to hold on to a single luxury box it leases for the purpose of entertaining customers" (ALLTHINGSD.com, 6/5).
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