Mellon will get first slapshot at new arena's naming rights
Thursday, April 19, 2007
By Mark Belko, Pittsburgh Post-Gazette
Mellon Financial Corp. will have first crack at buying naming rights to the new arena, but don't expect it or any other potential buyer to shell out the $400 million a British bank recently agreed to pay to put its name on the new Brooklyn home for the New Jersey Nets.
Mellon has the right of first refusal to the arena naming deal, a byproduct of the $18 million agreement it reached with the Penguins in 1999 to affix its name to the former Civic Arena.
That agreement runs through the 2008-2009 season, the last full year the team will be playing in the Igloo. The Penguins expect the new arena to be ready early in the 2009-2010 season.
Mellon now is in the process of completing its merger with The Bank of New York. As part of the deal, Mellon will move its headquarters from its hometown of 138 years to the Big Apple.
However, the Mellon name will remain on the arena through the duration of the 10-year naming rights agreement, spokesman Ron Gruendl said. Chief Executive Officer Robert Kelly said Tuesday that Mellon will remain on other Downtown buildings as well.
Whether Mellon will exercise its right of first refusal on the new arena was unknown. Mr. Gruendl said that as the two financial institutions work on an integration plan, "we will consider what we believe to be appropriate marketing and sponsorship opportunities."
That could include everything from naming rights to a new logo to "where we're going to have suites in venues to every single marketing opportunity you can think of," he said.
The Penguins declined comment yesterday on the issue of naming rights. Under its agreement with state and local leaders on construction of a new arena, the team has the option of using naming rights as part of its $4.2 million annual contribution toward the facility.
Regardless of the deal the Penguins make, it's unlikely they will get anywhere close to the nearly $400 million London-based Barclays Bank will pay over the next 20 years to put its name on the Nets' new arena in Brooklyn.
Neil deMause, co-author of "Field of Schemes," a book that questions the public financing of stadiums, said a deal of that magnitude probably is out of the question in a city the size of Pittsburgh.
He said the $1.8 million a year Mellon is shelling out for naming rights now probably is at the "lower end" of what the Penguins could receive for the new arena. He said a deal in the range of $2 million to $5 million a year is a "good guess" right now but far from certain.
"It's all over the place," he said of the market.
In another big deal recently, Prudential agreed to pay more than $5 million a year for the naming rights to the New Jersey Devils' new arena.
In Pittsburgh, H.J. Heinz Co. is paying $2.85 million a year over 20 years for the rights to Heinz Field.
PNC Financial Services Group is paying $1.8 million a year for 20 years for the same rights to PNC Park.
In other deals, American Airlines is paying $2.1 million a year to have its name on the arena used by the Miami Heat. Air Canada is shelling out $1.5 million a year for naming rights to the home shared by the Toronto Maple Leafs and the Raptors.
Fleet Bank is paying $2 million a year to see its name on the arena shared by the Boston Bruins and Celtics. Wachovia Bank is spending $1.4 million a year for the rights to the Philadelphia arena shared by the Flyers and 76ers. Xcel Energy is spending $3 million a year to have its name on the home of the Minnesota Wild.