The Golden 1 Credit Union has put its name on many coffee mugs. Now, the Sacramento-based company is putting it on an arena.
Executives with California’s largest credit union joined Sacramento Kings officials Tuesday morning downtown to announce they have signed a deal to name the Kings’ downtown facility Golden 1 Center, said to be worth millions a year.
Speaking at a ceremony across the street from the arena, Golden 1 CEO Donna Bland described the arrangement as more than a business deal or advertising coup for her company.
“We are more than just a name on a building,” she said. “This an investment in the future of Sacramento.”
The $477 million facility, under construction at the site of the former Downtown Plaza shopping center, is set to open in October 2016. It will host Kings basketball games, concerts and other events.
You have to love the fact that every time there is a game, someone on TV is saying, “Welcome back to Golden 1 Center!”
Economist Chris Thornberg
Sources familiar with the deal said Golden 1 will pay the Kings $120 million over 20 years. Bland confirmed the deal’s two-decade duration, but she and Kings executives declined to confirm the dollar amounts. In a posting on its website, the credit union indicated it will file financial disclosure statements for members at a later date that will contain the deal’s dollar figure.
The naming rights agreement represents a key step forward for the Kings in building business partnerships for the upcoming move downtown.
“We’re thrilled to have this done a year in advance,” Kings President Chris Granger said. “It creates some momentum for us from a sales standpoint. And (it’s) good for our partners at Golden 1. They’ll have a year of promoting their brand before we even open.”
Andy Dolich, a sports consultant and former executive for NBA and MLB teams, said the naming rights deal should trigger more sponsorship deals for the Kings.
“You have a significant entity that stepped forward and said, ‘We’re in,’ ” Dolich said. “That helps with other companies the Kings are talking to now. That is the positive domino effect you can have.”
Golden 1, headquartered in Sacramento since 1933, already sponsors one of the entrances at the Kings’ current arena in Natomas. The company has more than $9 billion in assets and 700,000 members.
Its chief executive, Bland, declined to say what kind of a dollar return on investment the company expects, instead saying the deal strengthens her company by strengthening the community.
“When the community thrives, when our members thrive, Golden 1 is able to provide more financial solutions for our members,” she said. That includes mortgages and auto loans for members. “It is a cycle. That is how we are able to get our return on our investment.”
Bland said Golden 1 Credit Union members will be allowed to tour the arena before it is open, attend private events there, buy tickets at discount, have early access to the arena for events, and will get to use “fast pass” lines at concessions.
Chris Thornberg, founder of Beacon Economics in Los Angeles, said it’s hard to know how good a deal the naming rights agreement is for Golden 1.
“You have to love the fact that every time there is a game, someone on TV is saying, ‘Welcome back to Golden 1 Center!’ ” he said. “That’s not bad. Is it worth $6 million a year? It’s hard to measure.”
Michael Natzic, vice president of investments for Crowell, Weedon & Co., a Southern California financial advisory firm, says a $6 million annual advertising and marketing budget is “a big chunk of money” for a company the size of Golden 1, “but not completely off the charts.”
“For them to be successful, they have to have a presence and a relevance in the community,” Natzic said. “It is a big thing. They are going to get noticed on it.”
Naming rights deals are typically not disclosed, but can range from less than $1 million a year to more than $20 million annually. A $6 million annual payment is in line with what could be expected in a midlevel market like Sacramento, sports consultant E.J. Narcise of Team Services LLC said.
Golden 1 would be the fourth company to purchase the naming rights to a Kings arena. In 1985, the Atlantic Richfield Co. was reportedly the first company in the country to pay to have an arena named after it, at the original Kings arena in North Natomas. The Kings moved to the current arena site in 1988, which was also named Arco Arena until 2011, when the oil company declined to extend its contract.
The arena was renamed Power Balance Pavilion for an international company that manufactures silicone bracelets for athletes. The company ran into financial troubles, prompting the Kings to reach a new deal in 2012 with Sacramento-based Sleep Train mattress company for naming rights.
Arco and Power Balance are said to have paid less than $1 million a year on naming rights. Arco was paying $750,000 a year, according to industry experts, although that figure was never officially confirmed. Power Balance was supposed to pay $975,000 in year one, ramping up gradually over five years, but the company filed for bankruptcy protection.
There have been no reported numbers on how much the Sleep Train company is paying for its current naming rights.
The arena construction will move into a new phase this summer, when crews add the building’s exterior surfaces and the first roof girders.
Sacramento Kings home naming rights
1985-1988: Arco Arena (former building)
1988-2011: Arco Arena (current building)
2011-2012: Power Balance Pavilion
2012-2016: Sleep Train Arena
Starting in 2016: Golden 1 Center (new downtown arena)