Short deal works for Overstock.com
In the face of competition from new NFL stadiums in larger markets like Dallas and New York, selling naming rights to the 44-year-old Oakland-Alameda County Coliseum was a bit like putting a “For Sale” sign on a Yugo parked in front of a Lexus dealership.
Over the 18 months that Premier had the coliseum’s naming rights to sell, the assignment had more twists and turns than a Le Mans race. It was unusual enough to be selling a stadium that opened its doors before there was an Internet or even fax machines. And with the A’s controlling all of the stadium’s interior signage and the Raiders due to receive half of any naming-rights proceeds, that restricted prospects to those that didn’t compete with significant sponsors of the teams.
The faltering economy also came into play. In August 2010, Verizon Wireless was two days away from announcing a deal to put its name on the coliseum. After word of the deal leaked into a newspaper gossip column, one of Verizon’s largest unions pressured the company, suggesting that announcing a naming-rights deal after laying off thousands of workers would not be received well. The deal cratered.
The Overstock.com Coliseum deal started with a cold call.
With the economy recovering and both the A’s and Raiders starting to look for new homes, Jesse Ryback, Premier’s manager of corporate partnerships, was casting about early this year for a brand for which a short-term deal would make sense. It would be an anomaly in a naming-rights market in which terms of 10 to 20 years are routine.
Ryback’s research revealed that Overstock.com, a billion-dollar company ranked No. 28 on Internet Retailer’s list of the top North American business-to-consumer sites, was rebranding to O.co. The strategy was designed to align the site with the company’s international ambitions, to make an easier name for mobile commerce, and to better fit with the company’s transition from a closeout/discount retailer to a general merchandiser. The Oakland stadium will eventually pick up the O.co name.
Ryback lobbed an email to Stormy Simon, Overstock.com senior vice president of marketing and customer care, and got an initial nibble. The proposal was referred to her marketing department, but it took months to get a letter of intent signed.
“Did we set out this year to find a naming-rights deal?” Simon said. “No, but we saw the value. It was just the right deal at the right time.”
After some back and forth between Overstock.com marketers, Ryback and Premier managing director Jeff Marks, Overstock turned the proposed deal over to its media shop, Ocean Media, which has a reputation for disdaining naming rights. The relative pricing of MLB and NFL naming rights was a head turner, as was the exposure to traffic on the nearby 880 Freeway. After the Florida Marlins relocate next season, Oakland will be the only stadium with MLB and NFL teams, which combined with concerts means it will host around 100 events a year. By Premier’s figuring, that added up to 1.3 billion annual impressions. Ocean Media was convinced.
“We weren’t hiding the fact this was one of the oldest MLB/NFL venues,” Marks said. “In reality, the relative pricing to other, newer venues and the opportunity to brand a year-round marketing platform were very convincing arguments.”
In mid-March a site visit including Marks and Overstock.com general counsel Mark Griffin (perhaps not coincidentally, a Bay Area native) went well. Within hours of the visit, Griffin consulted with Overstock.com CEO Patrick Byrne and called Marks. Overstock wanted to do the deal and completed a letter of intent in two weeks. The necessary approval was also obtained from the A’s and Raiders.
The night before last week’s approval from the city/county commission that oversees the stadium, Simon and other Overstock execs dined with Marks, Ryback and some of the politicians involved at Bocanova, an Oakland tapas restaurant. The next morning, unanimous approval of the deal was granted at a meeting inside the arena next door. The fact that it was held in another O, the Oracle Arena, was just a bonus.
Three companies have made their pitches to Overstock to produce the signs that will grace the outside of the stadium. They’ll cost more than $250,000.
“U2 is playing here in June and we should have a lot of our signage up by then,” said Overtstock.com’s Simon. “When I think of sports, I think of family and this area is a big market for us, so the value is there. Our awareness should grow, especially when there are national games. Hopefully that translates into sales and makes us a brand more of America wants to buy from.”