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Volume 26 No. 178
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Avaya's Deal For Earthquakes Stadium Naming Rights Worth $20M Over 10 Years

Santa Clara-based tech firm Avaya will pay $20M over 10 years for naming rights to the Earthquakes’ new stadium, a figure that is “believed to be tied for the third-most lucrative deal, on an annual basis," in MLS, according to Mike Rosenberg of the SAN JOSE MERCURY NEWS. The naming-rights deal is “more valuable” than the O.Co Coliseum deal in Oakland and “about on par with AT&T's annual fee” given to the MLB Giants. The Earthquakes’ deal is “just shy of SAP's yearly payment” for the Sharks' arena naming rights. Earthquakes President David Kaval said that the naming rights “drew interest from 40 to 50 companies, ranging from local firms to companies in Europe and Asia that wanted a foothold in Silicon Valley.” Rosenberg noted Avaya “will power the technology side of the stadium, which the Earthquakes hope will be the most advanced in the league.” The venue “will be the first cloud-enabled stadium in MLS, courtesy of Avaya, and fans will be able to use a nifty mobile app.” Meanwhile, the club “revealed for the first time that the cost of the privately financed stadium, originally pegged” at $60M when construction began two years ago, “has shot up to about” $100M. That figure is “still roughly average for a new MLS stadium.” Team officials reiterated that the franchise “would fund the extra cost without taxpayer expense or higher ticket prices.” The club said that the increase “is not a cost overrun, but rather was the result of late add-ons such as improved scoreboards, more solar panels, higher-end finishes, a new party deck, an upper concourse, player amenities and other features the team will unveil in the coming months” (SAN JOSE MERCURY NEWS, 11/19). Avaya said that the firm also “will become the official business engagement, communications and technology partner of the team and the new stadium.” In San Jose, Leia Parker noted the deal “might not come as a surprise to many, after a photo that reportedly showed Avaya branding on the field was leaked to ESPN in October" (BIZJOURNALS.com, 11/19).

MONEY TALKS: In San Jose, Elliott Almond writes upcoming Earthquakes roster moves "will probably be more costly" than recent signings, which is why stadium  naming rights "are so important in operating the team and paying for the privately financed building.” Other financial components “include ticket sales, founding sponsors and a yet-to-be-made deal" for jersey sponsorship. Kaval yesterday said that “calculations so far have exceeded forecasts, meaning the Earthquakes could have more money to acquire players than anticipated.” He added that “money available for signings has not decreased,” even though the 18,000-seat stadium cost the team $40M more “than it had been reporting.” Kaval: “We always budgeted that we would be able to invest a lot more in the player signings.” Almond notes the extra money “doesn't automatically translate to the signing of a third designated player” (SAN JOSE MERCURY NEWS, 11/20).