by Bradley Parsons
Staff Writer
The City is seeking a more active role in the Jacksonville Jaguars’ negotiations to find a stadium sponsor once Alltel’s deal expires in 2007.
The communications company pays about $600,000 a year to affix its name to the City-owned stadium that the Jaguars call home under the terms of a deal that expires Jan. 31, 2007. The City and team split that money evenly.
But as the parties contemplate the new stadium deal, the City is seeking to change that profit sharing arrangement. The City has asked the Jaguars to guarantee a $1.8 million annual payment in exchange for rent deferrals and other financial assistance sought by the team as means to stay competitive in small-market Jacksonville.
The team is reluctant to guarantee any payout until it has a clear understanding of how much sponsors will be willing to pay, said Bill Prescott, the Jaguars’ chief financial officer.
“What they’re saying is they’ll give us short-term rent deferrals in exchange for us guaranteeing what they receive for the naming rights,” said Prescott. “But we have to think, what happens if the sponsorship value drops to $5 or $6 million (total) and we’re obligated to pay $1,850,000 a year?”
The stadium’s value in the sponsorship market has been the subject of much speculation from the team, the City and stadium manager SMG. But everybody seems to agree that the current deal is a good one for Alltel.
Numbers provided by the City show that Alltel’s deal is one of the National Football League’s cheapest. Charlotte’s Bank of America signed a 20-year, $140 million deal two years ago to put its name on the Carolina Panthers’ stadium and deals in Philadelphia, Denver and New England average $6.8 million a year.
Jacksonville doesn’t expect to compete dollar for dollar with stadiums in larger markets like Philadelphia and Denver, but the Panthers’ deal in comparably-sized Charlotte got City Hall’s attention, according to SMG General Manager Bob Downey.
The City wants to play a larger role in making sure Jacksonville’s next deal measures up. In an Oct. 7 letter, City General Counsel Rick Mullaney told Paul Harden, Jaguars owner Wayne Weaver’s attorney, that the City wants its consultant on stadium negotiations to have a seat at the negotiating table.
That consultant, Dean Bonham, told the City that the Jaguars might be holding out on advertising revenues from Alltel.
“The City has been advised by its consultant (Dean Bonham) that the Jaguars may have included certain naming rights benefits (to which the City is entitled to 50 percent of revenues) in the “Advertising Agreement” between the Jaguars and Alltel in which the Jaguars are receiving 100 percent of the revenues,” Mullaney’s letter reads.
Mullaney requested that the Jaguars provide the City with all the information relating to the team’s attempts to sell the naming rights, formal approval of Bonham as an agent to market and sell the naming rights, a copy of the advertising agreement with Alltel and approval for Bonham to negotiate with Alltel.
Prescott said the team doesn’t want Bonham involved in the naming rights negotiations while the team and City are at odds over other matters, including advertising rights to signs inside the stadium. He said the team was splitting Alltel’s advertising revenues in strict accordance with the 1996 advertising agreement. That agreement received City Council approval and was independently audited, he said.