Taking a page from the Kings’ arena-financing playbook, Sacramento city leaders have launched a hunt this summer for a company willing to spend millions to have its name in lights over the door of the convention center.
Officials say they may be able to sign deals with several companies on facility naming rights and other sponsorships worth as much as $20 million, to help finance an expected $200 million in planned improvements and expansion costs for the convention center at 13th and K streets and the community center theater next door.
The city will have plenty of competition as it looks for deep-pocketed sponsors.
The financially struggling Sacramento Regional Transit district has hired a sponsor-headhunter company in hopes of making extra cash by selling naming rights to local companies for its light rail lines and stations.
Sacramento Republic FC is in discussions with corporations over a naming rights deal for its planned 20,000-seat stadium in the downtown railyard, and could reach a deal within the next year, team officials said. Stadium naming rights deals have increasingly become lucrative for MLS franchises; Banc of California signed a deal with Los Angeles Football Club last year on a 15-year, $100 million deal for that expansion franchise’s new stadium.
And a Sacramento regional transportation planning group attempting to bring a BikeShare program to town has been in talks with a major company on a multimillion-dollar sponsorship deal that would emblazon that company’s name on 900 public-use bicycles to be stationed for rent at street corners.
Those efforts are competing for funds with private entities building public-use buildings, including the Powerhouse Science Center group, which is looking for a naming rights deal for its planned science, technology, engineering, math and space experiential education center on the Sacramento River north of Old Sacramento.
Elsewhere in the state, San Diego and Fresno have begun looking into selling naming and other sponsorship rights to their convention centers. It’s a national trend, born in the bleakness of the 2000s recession, when governments ran out of money and were cutting services and postponing improvement projects.
The Sacramento Kings pioneered the concept in the 1980s, signing the ARCO gas company as the name sponsor for their arena in Natomas. More recently, the Kings named their new downtown arena after Golden 1 Credit Union in exchange for sponsorship payments from the credit union said to total $120 million over 20 years.
The city was thinking of offering convention center naming rights before that, but officials said the Kings’ lucrative deal with a Sacramento-based company opened their eyes.
“Certainly the success the Kings had further strengthened the concept for us, and provided some encouragement,” said Desmond Parrington, a city official overseeing the effort. “That they were able to do that I think shows we were selling ourselves short.”
Sacramento Mayor Darrell Steinberg said he is hoping for a naming rights number around $20 million.
“We should not be shy about talking with big-name sponsors,” he said. “I think given the increasing prominence of Sacramento as a center for arts and entertainment, we have every ability to get some top names to consider partnering with us.”
Steinberg said local companies and families will be given serious consideration for a naming rights deal, but that the search will not be limited to Sacramento.
The practice of auctioning naming rights for public buildings to private companies has at times drawn criticism, but it has become the norm for public universities and among private companies that own public-use venues.
The B Street Theatre recently announced it will name its upcoming Capitol Avenue venue the Sofia Tsakopoulos Center for the Arts in recognition of a $1.5 million donation from the Tsakopoulos family. At UC Davis, the Mondavi family provided funds to complete construction of the university’s nationally known performance hall. Sutter Medical Center’s new facility in midtown bears the name Anderson Lucchetti Women’s & Children’s Center in recognition of significant donations.
City officials say they would choose a respectable bidder whose company or family name would be considered a plus, not a public relations controversy. “We have a numerical goal to meet, but it also has to be consistent with our community values,” the mayor said.
Notably, the city required similar discretion of the Kings during the planning of the new arena, stipulating in a contract that “any name proposed to be associated with the (arena) shall be tasteful and not be a cause for embarrassment to the city and shall not include any companies primarily known for tobacco products, guns, etc.”
Barry Broome of the Greater Sacramento Economic Council, who is trying to lure Silicon Valley firms to Sacramento, said the efforts to merge corporate interests with civic upgrades makes sense.
“It is a positive sign that the community is maturing, more dynamic and people are more forward thinking,” he said. “When you share resources you gain leverage and you can do more exciting things.
With several entities chasing sponsorships simultaneously, are there enough deep-pocketed companies willing to market themselves in a new and possibility speculative way?
Harry Laswell, executive director of the Powerhouse Science Center, said he fears the answer could be no. Powerhouse received $5 million combined from three major sponsors – PG&E, Aerojet and SMUD – but is looking for more, including a naming rights sponsor.
“You can’t do a project like this in this community without corporate sponsors,” Laswell said. “Unfortunately, the individual philanthropic community in Sacramento is not very deep to support projects of this magnitude. The people who can write million-dollar-plus checks, there aren’t that many.”
Kyle Canter, an executive with The Superlative Group, a Cleveland-based national sponsorship headhunter company, is more positive. Sacramento’s financial stack does look unremarkable compared to Los Angeles and San Francisco, he said. But the local economy is growing, the central city is gaining cachet and the city does have an asset that elevates it beyond similar-sized cities, Canter said. “You are the capital of one of the largest economies in the world. You are a unique market.”
The city of Sacramento and SacRT have each separately hired Canter’s company to explore market possibilities and help each separately approach companies to talk about sponsorship deals.
City officials and Canter acknowledge that those entities and others may be competing against each other. Companies have limited promotional and advertising budgets – money that could be spent more conventionally, on such items as billboard or television advertising.
The city of Sacramento, for its part, will look outside of Sacramento for the convention center complex, which may be the biggest naming rights deal available in the city after the Kings arena. Sacramento city official Parrington said the city is hoping for a package involving exterior and interior sponsorship opportunities.
“We’re looking for companies in town, but also beyond,” he said. “You have (national) companies that may want to establish a presence in California and naming rights is a great way to do that. The convention center and community center theater are right across from the Capitol.”
Sutter Health, the region’s largest employer and a major philanthropic organization, said it is willing to talk to the city about the idea. The company recently gave $1.5 million to the B Street Theatre, matching the Tsakopoulos donation.
“Where it makes sense as part of our mission, we do believe in investing in and supporting other local (including government) organizations that contribute to the health and vibrancy of our community,” said Sutter spokeswoman Nancy Turner.
No venue naming rights deal will come near the dollar value of the Golden 1 Center arena sponsorship, Canter said. That facility gets national and state television coverage during basketball games and gets repeated national mentions each time a major concert comes through.
Convention center naming rights will create considerably less national exposure, but that may be good for some companies.
“If you are a competitor, say, of Golden 1, and you can pick up the convention center for 10 percent of that (arena deal price),” Canter said. “You don’t get the TV exposure, but people are going to say your name around town a lot. You may reach a higher scale demographic.”
Some naming rights, though, come with a risk. A company that buys naming rights to a light rail station may, for instance, suddenly might find its name mentioned in the news if a crime occurs there, as recently happened when a sheriff’s deputy was shot at a North Highlands station.
Canter said that is a concern. In his city, FirstEnergy, a major electrical company, paid to have its name on the Cleveland Browns football stadium, even though the stadium is also called the “The Factory of Sadness” because the Browns lose so often.
“Those are the risks,” Canter said. “It is part of the game.”