Stadium deal served its purpose for Farmers
Four years ago last month, AEG and Farmers Insurance revealed a blockbuster partnership tied to the proposed development of an NFL stadium in downtown Los Angeles. They announced a mammoth 30-year naming-rights deal valued at $600 million to $700 million, touted as the biggest agreement in sports. Farmers Field would be the name of the 68,000-seat facility.
|A rendering shows how Farmers Field would have looked in downtown Los Angeles.
Today, the Farmers Field deal is dead. Three NFL teams, the St. Louis Rams, San Diego Chargers and Oakland Raiders, have identified Inglewood and Carson as potential stadium sites, and AEG announced last week that it had pulled the plug on the downtown project.
It was a quiet end to a big deal that in 2011 marked AEG’s latest coup under the leadership of Tim Leiweke, the firm’s former president and CEO. To celebrate the occasion, AEG threw a big outdoor party at L.A. Live, attended by dignitaries including Antonio Villaraigosa, Los Angeles’ mayor at the time and a project supporter.
Their message: Farmers Field would be the next step for revitalizing Los Angeles after Staples Center and L.A. Live turned around a bleak part of the city. The stadium would be the final piece for developing the best sports and entertainment district in North America.
At the time, Farmers Chief Marketing Officer Kevin Kelso said, “This is going to put Farmers up as a brand and get exposure at a really high level, and that’s attractive to us. We saw the potential for this project to revitalize downtown forever and really wanted to be a part of that.”
The Farmers Field website was still up last week, but the flashy renderings and videos produced by Gensler, the same architect that worked on L.A. Live, are now merely postcards from a future that will never be. The designer’s work is part of the $50 million AEG spent on the project, company spokesman Michael Roth said.
For all those wrapping their arms around Farmers Field, there was one glaring omission: the absence of an NFL tenant to fill the stadium. No worries, Leiweke had told Farmers officials, whom he asked to look past the void. But that key obstacle led to the project’s downfall.
The relationship between Farmers and AEG remains, but several principals involved in the agreement, including Kelso and Leiweke, have departed the companies.
Other Farmers Insurance executives that embraced the deal also left or shifted roles in the company, including Chuck Browning. The former head of sponsorships, events and corporate giving is now Farmers’ head of agent and customer experience for personal lines.
At a SportsBusiness Journal conference in June 2014, Browning said, “We were kind of a nonmentioned brand five years ago … a quiet giant in the insurance marketplace but not on the forefront and in a marketplace that is dog-eat-dog, as competitive as it can be.”
The Farmers Field partnership vaulted Farmers to the front of the pack in brand awareness without it having to pay a penny to AEG, according to Browning.
“As the brand, we have been the greatest benefactor and we have yet to write a check,” he said at the conference. “We have had unprecedented media coverage. I’m sure this one will be studied forever, and we are kind of the envy of stadium naming-rights deals.”
Sports marketers agree. Whether any money changed hands is debatable, considering the agreements already in place between the two firms and the fact that neither is talking about it publicly. But the deal accomplished its goal by providing Farmers Insurance with prime exposure over the past four years through reams of media coverage tied to the NFL’s potential return to Los Angeles.
Front Row Analytics attached a value of $6 million in total exposure for Farmers Insurance, said Eric Smallwood, Front Row’s senior vice president. It peaked at $2.5 million the first year, trickled down after the initial buzz and picked up again last week, Smallwood said.
Mike Stevens, the New York Giants’ senior vice president and chief marketing officer, said, “If publicity and branding are things that a company wants — and I believe Farmers did — they got a lot of value out of that move.
“They really wanted to show they were committed to Los Angeles and the league, so it will be telling to look at their interest in getting involved with another possible NFL facility.”
And even though it fell apart, the Farmers Field deal was important because it established a market for what a company is willing to pay for naming rights to an NFL stadium in Los Angeles, said Rob Yowell, president of Gemini Sports Group.
Kevin Rochlitz, the Baltimore Ravens’ vice president of corporate sales and development, said, “If you’re a new [NFL] team in L.A., a lot of the groundwork for naming rights has already been done.”
In the end, AEG and Farmers Insurance both had great intentions, said Randy Bernstein, president and CEO of Premier Partnerships, the agency brokering naming rights for the new Atlanta Falcons stadium.
“Tim is the best in the business, and he did it exactly the way it should have been done,” Bernstein said. “It showed Farmers’ commitment to make a dream for many in Los Angeles come true. They were both doing their fair share to bring a stadium to life.”