Bloomberg News

Falcons Expect to Be in ‘Top Tier’ for Stadium Naming Rights (1)

April 24, 2014

The Atlanta Falcons’ new $1.2 billion stadium will be in the “top tier” among U.S. sports arenas in terms of revenue generation from naming rights, an executive from the National Football League team said.

“Atlanta is very well positioned,” Jim Smith, the team’s chief marketing and revenue officer, said today at a Bloomberg Sports panel discussion in Atlanta with the Falcons and baseball’s Braves. “Technology, insurance, automobile, banking” companies are possible partners, he added.

The largest U.S. stadium naming rights pact is the 30-year, $700 million agreement by Farmers Insurance Group to back a proposed 72,000-seat stadium in Los Angeles, which doesn’t currently have an NFL team. Levi Strauss & Co. is paying $220 million over 20 years for the new home of the San Francisco 49ers.

With an expansion Major League Soccer franchise awarded to Atlanta this month also set to play in the new stadium from 2017, the facility could attract an overseas sponsor, said Smith and Rich McKay, the NFL team’s chief executive officer.

“I wouldn’t suggest that it will only come from the Southeast,” Smith said. “Now that we’ve added soccer to our portfolio, I think it will open some opportunities internationally.”

College Games

In addition to the Falcons and soccer, the stadium will stage marquee college football games, including potential National Collegiate Athletic Association title games, and basketball’s Final Four, Smith said.

“When you combine those elements, that builds out the portfolio for an 11-month use of the stadium,” Smith said. “All of that adds to the revenue component. It puts you in another league when it comes to the naming rights.”

Ticket prices may rise by as much as 10 percent, McKay said.

“You will not see the ticket cost rise that much,” he said. “It doesn’t mean you won’t have a 10 percent up-tick. We think the market can be very supportive.”

One-time fees for personal seat licenses, which give the purchaser the right to buy season tickets, will be “modest” compared with amounts levied by the Dallas Cowboys and New York Giants when they moved to new stadiums, he said.

Pricing for seat licenses will be announced in the fall or early part of 2015, after the team has a firm layout for seat locations, McKay said.

Public Opposition

The stadium budget includes a $200 million public contribution raised through the sale of bonds. The plan has drawn opposition from local neighborhood groups objecting to Atlanta City Council’s approval of the use of funds from an existing hotel and motel tax for the project.

Asked to gauge his confidence level that the stadium will open on time, McKay deferred to Home Depot Inc. (HD:US) co-founder Arthur Blank, the team’s owner.

“Based on my boss I am going to say 105 percent, March of 2017,’” McKay said. “We’re very, very confident that can occur.”

Also in 2017, a $672 million, 41,500-seat stadium is scheduled to open for Major League Baseball’s Atlanta Braves in Cobb County, Georgia, 13 miles north of its current Turner Field location in downtown Atlanta.

Retail, Housing

The Braves stadium is being designed by Polulous, a Kansas City-based firm which has designed 13 of the past 14 new baseball stadiums and 19 of the 30 currently in use. The project includes an adjacent development of retail, restaurants, residences, offices and hotels.

“The uniqueness of what we’re doing creates opportunities and gives us a great deal of optimism about the marketplace,” said Derek Schiller, the team’s sales and marketing director. “We will be the anchor tenant pulling in all of the other attractions.”

Terry McGuirk, chief executive officer of the Braves, said the team is open to having more day games in the new ballpark, although night games generate larger television audiences. High temperatures during summer months can also deter fans for daytime games.

“We are totally flexible,” McGuirk said. “Whatever our fans want, we will supply the games”

To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net; Michael Buteau in Atlanta at mbuteau@bloomberg.net

To contact the editors responsible for this story: Michael Sillup at msillup@bloomberg.net Dex McLuskey


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