by Mike Sharkey
Staff Writer
The clock is ticking for the City, the Jaguars and representatives from Alltel to get a new deal done regarding the naming rights to Alltel Stadium — sort of.
Per contractual agreement, February 1 marked the beginning of a six-month period during which Alltel, the City and the Jaguars can negotiate a new contract exclusively with each other. The current contract was enacted on June 23, 1997 and expires on Jan. 31, 2007. That contract called for an initial payment of $2,163,935 from Alltel to the City (the contract is split 50-50 between the City and the Jaguars) with seven equal installments of $577,049 due by February 1 of every year.
The total value of contract is $6,203,278 over 10 years, which may have been the going rate in 1997 and was certainly a good deal for Alltel. However, several things have changed since that contract was executed that will likely cost Alltel, or another corporate sponsor, much more.
For example, the Houston Texans sold the naming rights to their stadium to CenterPoint Energy’s Reliant Energy for $300 million over 30 years. Conversely, the Phoenix Suns and the Phoenix Coyotes play in America West Arena which is sponsored by America West Holdings Corporation for $26 million over 30 years. That $866,667-a-year figure is still higher than Alltel is paying to sponsor a stadium that just hosted the Super Bowl and will host at least 10 Jaguars games a year and, starting this year, three major college football games as well as numerous other events.
Exposure may be another factor when the new stadium lease negotiations get underway in earnest. The National Football League, through network and cable TV, Direct TV and even sports bars, have helped the League reach an all-time high in popularity. That popularity has, in turn, allowed teams and cities to garner enormous sponsorship deals for their private and publicly-owned stadiums. Today, 50 percent of the NFL teams have stadium sponsorship deals and all eight of Major League Baseball’s newest parks have corporate sponsorship.
Michael Huyghue, president and CEO of Axcess Sports & Entertainment, said the current deal may have been good for the Jaguars and the City eight years ago, but today it favors Alltel. He’s sure the next contract will be much larger, but it may not come near the deal between the Texans and Reliant.
“It’s a good deal for Alltel,” said Huyghue who worked for the Jaguars for several years. “I’m not sure Alltel is prepared to pay that (millions a year). It’s hard to find that kind of sponsor. It’s hard to justify to your shareholders why you are paying that much to sponsor a stadium.”
Adam Hollingsworth, the City’s Chief of Policy, said the City and Alltel have not talked in-depth about a new contract yet. He said the next four months are important because of the exclusive nature of the negotiations. However, it’s imperative to strike a new deal with Alltel at this time.
“If we do not reach an agreement, we will open discussions with other companies and we can still continue discussions with Alltel,” said Hollingsworth. “So far, we are only in preliminary discussions.”
Hollingsworth declined to elaborate on what kind of deal the City is looking for, but said the City has been pleased with Alltel.
“We want the best deal for the City and the taxpayers of Jacksonville,” he said. “The deal will be commiserate with what a market our size will bear. The taxpayers are incredibly invested in the stadium and clearly Alltel has gotten great value.”
Bill Prescott, senior vice president, stadium operations/chief financial officer, echoed Hollingsworth’s sentiments regarding the current relationship with Alltel and said the team has met with Alltel to begin talks about a potential new deal.
“Our marketing department has been in touch with Alltel and there is a follow-up meeting in May,” said Prescott. “We are very interested in getting a deal done. Alltel has been a good business partner.”
Prescott wouldn’t speculate on the financial terms of the new contract.
“Obviously, we would like to get whatever is the appropriate market value,” he said, adding the size of the market and television exposure are the two biggest driving factors. “We will work hard to get the appropriate value, but it’s too early to speculate. We will pursue what we can during the next four months.”
Ellie Babb, manager of corporate communications for Alltel (which is based in Little Rock, Ark.) said the company is also pleased with the relationship it has with the team and the City of Jacksonville. She said the company is also quite cognizant of the current exclusionary time-frame.
“Obviously, we are aware of the terms of the contract,” Babb said. “We will work with the parties to schedule a time to talk.”