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Volume 23 No. 18
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Arco's name coming off Sacramento arena

Arco is winding down its time as an arena naming-rights partner in Sacramento, as the company is not renewing a relationship that has seen its brand on the home court of the NBA Kings for the past 25 years.

Pro forma, Arco’s rights expire in February, so while the name change could happen before the end of the NBA season, that’s unlikely, sources said.

The Maloof brothers own Arco Arena and the NBA franchise that plays there, and they are in the final stages of a review for an agency that would sell naming rights to the 22-year-old venue. Finalists include IMG, Premier Partnerships and Gemini Sports Group, sources said. A decision is expected imminently, although the Maloofs are hopeful of eliminating the need for a sales agency by convincing an incumbent building sponsor to upgrade.

While the list of NBA arenas without a corporate name is short, there are more than a few sales challenges awaiting whichever agency is selected for the Sacramento job.

Sacramento is one of league’s least-populous cities, and at 17,317, Arco Arena has the smallest capacity of any NBA venue. Plans for a new arena have long been in the works but have been unsuccessful. The fact that the arena is a 22-year-old building makes the likelihood of any deal of more than five years unlikely, as well.

Nonetheless, any deal would likely have language including right of first refusal on a new facility. Depending on the brand, an interesting deal also could be devised by combining arena naming rights with other Maloof assets, which include The Palms hotel/casino in Las Vegas and the Maloof Money Cup skateboarding competition.

At the high end, naming-rights deals for palaces like Cowboys Stadium and New Meadowlands Stadium have gone unsigned, but there have been some smaller deals done over the past nine months. EverBank put its name on the home of the Jacksonville Jaguars; Bridgestone replaced Sommet Group as prime sponsor of the Nashville Predators’ home rink; and Sun Life Financial’s moniker is on the stadium formerly known as Joe Robbie, which the NFL Dolphins and MLB Marlins call home.

Those deals are retrofits. New venues with corporate names are a much tougher sell, though there have been some recent deals there as well, like Yum! Brands with the new arena in Louisville, Ky.

“We’re seeing more activity, but not at the prices or length that we’ve seen in the past,” said E.J. Narcise, principal at Team Services, which assisted on the Louisville deal. “But especially in the collegiate area, where new revenue is an imperative, you’ll see more sports venues with a ‘For Sale’ sign on them.”

Team Services is working to sell the name of the University of Colorado’s 53,000-seat football stadium in Boulder, Colo.

“Obviously, there are some really high-profile naming-rights opportunities in New York and Dallas,” said Mike Reisman, a principal at Velocity/Team Epic, which assisted on the Prudential Center and Citizens Bank Park naming-rights deals. “The market’s definition of value has narrowed, so the days when brands just slapped their names on something are over.”

Sources said Arco is paying around $750,000 a year for naming rights, or around $1.2 million with other media and building elements included. The building claims to draw around 2 million visitors annually to 200 events.

BP-owned Arco also had its name on the Kings’ first home in Sacramento. That 10,000-seat Arco Arena was home to the Kings from 1985 to ’88.