Deal branding Dallas Cowboys' new venue would be a record setter, insiders say
Monday, April 02, 2007
Dave Moore - Dallas Business Journal
Speculation is that Dallas Cowboys owner Jerry Jones is seeking a record-setting amount -- as much as $1 billion -- for naming rights to the new Cowboys stadium in Arlington.
The ambition to seek an all-time-high naming-rights deal falls in line with Jerry Jones' drive to build the most expensive NFL stadium in league history. The new stadium, to be completed in Arlington in 2009, is expected to cost about $1 billion.
And, some insiders say, Jones is gunning for a billion-dollar naming deal. That would more than double the two highest naming rights deals: the $400 million, 20-year Citibank N.A. deal for Citi Field, the New York stadium that would replace 43-year-old Shea Stadium, home to Major League Baseball's New York Mets; and the $400 million, Barklays plc deal for the Barclays Center, the Brooklyn home of the NBA's New Jersey Nets. Neither facility has been built yet.
The cash involved in the potential Cowboys naming rights deal effectively limits the pool of U.S. companies that could qualify to make the payments over a long period of time.
Frank Jones, a Houston attorney who helped Jerry Jones (no relation) lay the groundwork for building a new Cowboys stadium, said he doesn't think $1 billion for stadium naming rights is out of the question.
"If you look at the Dallas Cowboys and you look at that brand, it's probably the third most recognized in the world of sports," said Jones, who worked with the Jerry Jones family at Winstead Sechrest & Minick PC for three years. The lawyer now works at Greenberg Traurig LLP.
Jones said only the New York Yankees and the Manchester United soccer club are more internationally known than the Dallas Cowboys -- and that that notoriety makes the naming rights extremely valuable.
Frank Jones said he thinks Jerry Jones will stick with a local company in making a naming rights deal, mainly because a local company would see more benefit.
The attorney said he thinks Exxon Mobil Corp. is one of the likeliest candidates for buying the naming rights. "I can't think of anything more powerful than Exxon and that (Cowboys) star," Frank Jones said.
Gantt Walton, a spokesman for Irving-based Exxon Mobil, declined to comment on whether the firm is negotiating to buy the Cowboys stadium naming rights.
Frank Jones said the $1 billion figure is feasible, especially in light of the $310 million, 31-year deal that Reliant Stadium in Houston fetched for the NFL expansion team the Texas Titans.
He added, however, that Jerry Jones will be careful in protecting the Cowboys name from the tarnish of an Enron Field debacle -- that whatever company he partners with, it will be the right choice.
Enron Field in Houston later lost its name when the energy-trading company it was named for skidded into scandal; the naming rights then were passed on to Minute Maid, the Coca-Cola subsidiary.
However, observers say, don't expect Jerry Jones to compromise the Cowboys' brand name by pairing the stadium with a financially shaky company.
On March 19, the Texas Rangers announced it reacquired the name of its stadium after Ameriquest -- actually, its parent company, subprime lender Orange, Calif.-based ACC Capital Holdings -- agreed to give up the rights.
Fourteen months earlier, Ameriquest had declined the Rangers' offer to reclaim the name. That was before the firm was forced to make across-the-board cuts to trim expenses. Defaults on loans have jumped as customers have had trouble making their payments.
Two months before the Rangers' March 19 announcement, Ameriquest became more interested in the team's offer to reclaim the stadium's name, freeing the company from the balance of its 30-year, $75 million contract with the Rangers. The stadium now is known as the Rangers Ballpark in Arlington. The old name was Ameriquest Field in Arlington.
Terms of the agreement between Ameriquest and the Rangers were unavailable.
Meantime, some scoff at the idea of $1 billion for naming rights. Among them is University of Oregon Professor Dennis Howard.
Howard, who teaches at the Lundquist College of Business at the university, said the naming-rights craze has played itself out, mostly because so many facilities have sold their naming rights, it has created too much media "clutter."
So far, nine companies have failed to honor their stadium naming rights agreements out of financial concerns, said Howard, who teaches at the college's Warsaw Sports Marketing Center.
He said in order to reach $1 billion, the Cowboys will have to allow the naming-rights buyer incredible access to NFL fans and multiple opportunities to pair themselves with Cowboys players. Even then, he questions whether the opportunities would translate into $1 billion.
He said few publicly traded companies could justify the naming-rights purchase to stockholders.
Regardless of all the speculation, the Cowboys probably won't say who's buying the naming rights until about 2008, a year before the stadium opens, Frank Jones said.
Currently, mum's the word out of Cowboys headquarters at Valley Ranch. "Right now we're assembling a list of potential partners and we're not discussing it ... with the media," said Cowboys spokesman Brett Daniels.
