SBJ/Dec. 9-15, 2013/Marketing and Sponsorship

Kabam! Cal lands naming-rights deal

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Editor's note: This story is revised from the print edition.

The University of California broke new ground by signing naming rights for Kabam Field at California Memorial Stadium, the first college sports facility named for a video game company.

Last week, Cal-Berkeley officials announced a 15-year, $18 million agreement with Kabam, a 4-year-old San Francisco technology firm. The company generates more than $350 million a year from people paying to play its fantasy video games.

The deal is the largest field naming-rights package in the college ranks, based on SportsBusiness Journal research. It helps Cal-Berkeley fill a funding shortfall for construction debt tied to the stadium’s $321 million renovation.

Jesse Ryback, director of business development for Premier Partnerships, the firm selling those rights for the school, played a key role in the deal. After observing his nephews’ fascination with playing Minecraft, a popular video game, it got Ryback thinking about Bay Area tech startups and a potential fit in a new category for naming rights.

Through research, he found Kabam, whose investors include Google, Intel, Warner Bros. and MGM. (Kabam pays the studios licensing fees to produce video games revolving around films “The Hobbit,” “The Godfather” and “Fast and Furious.”)

Most important for Cal and its consultant, they discovered that three of Kabam’s four co-founders are Cal graduates: CEO Kevin Chou, general manager Michael Li and chief of staff Holly Liu.

The core group at Kabam recognized a unique opportunity to do something special for their alma mater, said Chris Carvalho, Kabam’s chief operating officer. Carvalho, also a California graduate, did play-by-play as a student for Cal Bears sports on the campus radio station.

“Premier reached out and it was an incredible honor,” Carvalho said. “So many of our people went to Cal and were shaped by it. There were so many synergies.”

Cal and Kabam had a deal in place four months after officials began discussions at the start of football season, said Jeff Marks, Premier Partnerships’ managing director.

The school talked with more than 350 companies and had meaningful discussions with 50 firms before giving in-depth presentations to 10 candidates, said Solly Fulp, Cal’s chief operating officer and deputy director of athletics.

In addition to the emotional tie-ins with the company’s owners, the deal makes sense for Kabam because it hits the firm’s target market — young men age 18 and up, Carvalho said. Men make up 65 percent of all Kabam video game players.

All told, its consumer base plays Kabam games an average of two to three hours a day. The basic games are free to play. For a premium experience, consumers pay $5 to $50 a game for additional content. Every day, up to 5 million people are engaged with Kabam products, Carvalho said.

The company spends more than $50 million a year on advertising, including spots on ESPN. “This is a further progression of a different model that targets an audience we’re looking for,” Carvalho said.

In addition to the cash value, the terms call for Kabam to develop a Cal-based internship program and fund a scholarship at the school, which increases the agreement’s value to slightly more than $1 million a year.

In-stadium activation includes Kabam logos placed on the 25-yard lines at Memorial Stadium, an interactive gaming area in the stadium, and digital messaging on a new LED video board at field level.

For Premier Partnerships, the challenges to getting the deal done included Cal’s 1-11 finish this season, the worst record in school history, and the NCAA releasing the news in October that the Pac-12 school's football program has the worst graduation rate among BCS conferences, Marks said.

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