The Oakland Coliseum is getting a new name: Overstock.com Coliseum. It's the stadium's third name in thirteen years.
Overstock will pay $1.2 million a year for the next six years for the naming rights to the stadium, the home of the Oakland A's and the Raiders. It appears to be one of the smallest deals for naming rights to an NFL stadium.
Overstock may be getting a bargain, but the deal isn't great for Alameda County taxpayers. Half the money will go to the Raiders, under the terms of a previous agreement.
The other half will go to the taxpayer-funded Oakland-Alameda Stadium Authority, said Deena McClain, the interim executive director of the authority. McClain said the company that brokered the deal will also get a commission, although she would not say how much.
“It’s an underpayment for Overstock,” said Andy Dolich, a sports business consultant and former executive with the 49ers and Oakland A’s. “In many teams’ case that would be a nice sponsorship, but not a naming rights deal, which are usually $5 million and above.”
When the Washington Redskins opened their new stadium, FedEx bought the naming rights for about $7.6 million a year. That's about the mid-range for a stadium where an NFL team plays.
The Coliseum deal isn't the cheapest. Ford Motor Company only pays $1 million a year for the naming rights to the Detroit Lions' stadium, but the Ford Family owns the team.
The most expensive naming rights deal is for a yet-to-be built stadium for a team that doesn't yet exist. In January, Farmers Insurance agreed to pay $700 million for over 30 years - or more than $23 million a year - for a football stadium in downtown Los Angeles. LA has not had a professional football team since the Raiders and the Rams left in 1994.
Ten naming rights deals in the NFL: (Click to organize.)
Jeff Marks, who heads Premier Partnerships, the firm that brokered the Coliseum deal, called the Overstock.com agreement “valuable,” considering the stadium's age and the tough economy. Marks said it could not be compared “apples to apples," because it only includes naming rights while other stadium deals include other sponsorships and luxury suites.
As it stands, new signs will go up inside and outside the coliseum, and announcers will be forced to say Overstock.com Coliseum, although there is a possibility that the name will change: Overstock.com is in the process of changing its name to O.co.
Sports marketing experts say fans might be more likely to use the name "O.co."
Network Associates first bought the naming rights to the Coliseum in 1998. When the company changed its name to McAfee in 2004, the stadium's name changed too. McAfee had paid $1.2 million a year for the naming rights, but its deal ended in 2008.
That’s another reason why the price was so low, said Neil deMause, who writes a blog called "Field of Schemes," which focuses on the business of stadiums.
“It’s different when you're selling a name to a stadium that’s been through a bunch of different names,” said deMause. “People just call it the Coliseum.”
The A’s and Raiders have struggled in recent years to sell out the Coiiseum. That's partly the fault of the park, which is old, cold, and austere, and partly the fault of the teams' mediocre play. The A’s are trying to move to San Jose to build a new stadium, and the Raiders want to build a new one in the same place. The A's lease expires at the end of 2011; the Raiders lease expires in 2013.
The Oakland-Alameda Stadium Authority, which controls the stadium, has a history of financial woes. The deal it brokered to bring the Raiders back to Oakland cost Alameda County taxpayers more than $100 million because of an ill-fated plan to sell personal seat-licenses.
Ignacio De La Fuente, chair of the authority's board, said the Overstock deal isn't great, "but it's not bad." He added, "I think we need every cent we can get, especially with this $56 million deficit we have in the city."
The Coliseum authority is expected to approve the deal on Wednesday.