One year ago, T-Mobile’s Peter DeLuca and Meredith Starkey stood on a parking garage in Las Vegas, staring at a big hole in the ground where a new arena was sprouting up on the city’s famed Strip.
It was during the Consumer Electronics Show and officials with AEG, which is privately financing the $375 million project in a joint venture with MGM Resorts International, invited the cell carrier’s marketers to check out the construction site. At the parking deck, AEG Global Partnerships executives initially laid out their vision for developing the city’s first arena seating more than 19,000 since Thomas & Mack Center opened in 1983.
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T-Mobile Arena is nearing completion.
Photo by: COURTESY OF MGM RESORTS INTERNATIONAL
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It was the first step on the path toward T-Mobile signing a long-term naming-rights deal, announced last week, for the facility. T-Mobile Arena is scheduled to open April 6 with a concert by the Killers and iconic Vegas crooner Wayne Newton.
The deal is T-Mobile’s first naming-rights agreement for a sports and entertainment facility. The company has a few activations at stadiums tied to its MLB deal, but nothing of the magnitude of spending millions of dollars annually to have its brand stand alone atop a building. Its competitors, AT&T, Sprint and Verizon, by comparison, had naming rights at multiple arenas and stadiums.
DeLuca, T-Mobile’s senior vice president of marketing, and Starkey, the firm’s senior director of sponsorships, entertainments and events, left last January’s meeting intrigued. They flew back to the Seattle area, T-Mobile’s home base, fascinated by the opportunity to place their message in front of 40 million people in the U.S. alone who visit Vegas annually. The market is ranked by many travel sites as America’s top tourist destination.
Three months later, in early April, AEG and T-Mobile officials met again at the SportsBusiness Journal Forty Under 40 Awards at L.A. Live, the entertainment district developed by AEG. It was at that event, where Starkey was honored as a Forty Under 40 winner, that they started serious discussions about naming rights, said Todd Goldstein, AEG’s chief revenue officer. John Tatum, president and CEO of Genesco Sports Enterprises and Starkey’s former employer, was also involved in those talks, and he assisted T-Mobile in the negotiations.
It wasn’t until early November, though, that T-Mobile leaders committed to the deal, after recognizing the benefits of reaching such a vast audience along the Strip, one of the world’s most recognizable thoroughfares.
“We thought long and hard about whether we wanted to do a naming-rights deal,” said Andrew Sherrard, T-Mobile’s chief marketing officer.
“This is the center of the best live entertainment you can get in Las Vegas,” he said. “What a cool place to actually have an impact, both through the number of people that show up there, but also through the broadcast through a lot of those events around the country.”
The terms of the deal were not disclosed, but a source familiar with the deal confirmed the agreement spans about 15 years. The value is believed to be in the range of $5 million to $6 million a year, according to sports marketers working in that space.
Should the city land an NHL expansion team, a decision that could be made this year, Goldstein said an escalator clause would kick in to increase the value for naming rights, although he would not say how much the numbers would go up.
Securing a big league tenant “would be icing on the cake for us,” Sherrard said.
As part of its activation, T-Mobile customers will receive exclusive perks such as “fast-track” VIP access, effectively bypassing lines to get through the arena doors; seat upgrades; and presale ticket opportunities. Some of those elements are available to its customers at music festivals that T-Mobile sponsors, but now the carrier can leverage them on a consistent basis at the new arena, DeLuca said.
In addition, T-Mobile is set to receive prime exposure from a permanent sign on the arena roof, visible from airliners approaching nearby McCarren International Airport.
“If you think about it, we will now have one of the largest billboards in Las Vegas emblazoned with T-Mobile on it,” Sherrard said. “ As people come into the market flying over the city, we believe it will have great impact at a brand level. We’re bringing magenta on the Strip.”
