New Era, Big Money, Today’s NFL
Buffalo, Miami cash in on naming rights
Published August 22, 2016
In the same week that an old-guard owner’s name came off one NFL stadium, the name of a company tied to music and casinos went atop another.
As the NFL evolves, one thing remains constant: The money just keeps rolling in.
In Buffalo, the decision by Bills owners Terry and Kim Pegula to move on from team founder Ralph Wilson’s name in favor of selling stadium naming rights to local company New Era marked a significant philosophical shift — and revenue boost — for a team in one of the NFL’s smallest markets.
Most valuable NFL naming-rights deals
Ranked by total commitment
|Stadium||Price||No. of years/Avg. annual value|
|MetLife Stadium||$425-$625 million||25 years/$17-$25 million|
|NRG Stadium*||$310 million||31/$10 million|
|Hard Rock Stadium||$250 million||18/$13.89 million|
|Levi’s Stadium||$220.3 million||20/$11.02 million|
|U.S. Bank Stadium||$220 million||25/$8.8 million|
Ranked by average annual value
|Stadium||Avg. annual value||Price (number of years)|
|MetLife Stadium||$17 million-$25 million||$425-$625 million (25)|
|AT&T Stadium||$17 million-$19 million||NA|
|Hard Rock Stadium||$13.89 million||$250 million (18)|
|Levi’s Stadium||$11.02 million||$220.3 million (20)|
|NRG Stadium*||$10 million||$310 million (31)|
* Includes naming rights to the 350-acre NRG Park, which includes 8,000-seat NRG Arena.
NA: Not available. The overall price and length of the deal has not been reported.
Note: Does not include the estimated $240 million that Procter & Gamble will have paid the New England Patriots over the course of two 15-year contracts from 2002 through the end of the 2031 NFL season for naming rights to Gillette Stadium.
Source: SportsBusiness Journal archives
At the southern end of the AFC East, the Miami Dolphins, whose owner Stephen Ross is privately financing a massive $500 million makeover of their entire stadium, announced a deal valued at $250 million with Hard Rock International. The 18-year agreement ranks high among naming-rights deals for league stadiums and provides rare stability on the signage of Miami’s oft-renamed stadium.
Together, the deals further underscore the commercial appeal of the NFL, the financial strength of the individual franchises and the rapidly shifting landscape of ownership and their policies in an era of billion-dollar franchises.
Where the conservatism of the NFL once meant that any connection to gambling was considered taboo, the attaching of the Hard Rock name to the Dolphins’ stadium reinforces a new way of thinking in a league that has set a goal of $25 billion in revenue by 2027.
The Pegulas, oil and gas billionaires who bought the team in 2014 for $1.4 billion, stayed the course on naming rights in their first two years, but saw this as the right time to secure additional revenue.
“New time, new family, new ownership,” said Kim Pegula.
The new name of the stadium, New Era Field, itself suggests a team — and league — moving forward.
It’s only fitting, on a week featuring big deals from two of the newer owners in the league, that a major figure in launching the NFL’s new era with his aggressive marketing and sales tactics was recommended for induction to the Pro Football Hall of Fame: Dallas Cowboys owner Jerry Jones.
‘A pretty powerful moment’
On June 15, a police escort waited for New Era executives outside the company’s Buffalo headquarters. The Bills organized the escort and had an SUV pick up company CEO Chris Koch; Paul McAdam, the firm’s North American division vice president and general manager; and Josh Feine, its vice president of sports marketing and corporate partnerships. They had been invited by the Bills to a special presentation at Ralph Wilson Stadium.
They all left the office at 6 p.m. for the 10-mile drive to the stadium, in the suburb of Orchard Park. There they were ushered to the 50-yard line at field level, where they met the Pegulas and team President Russ Brandon.
The Bills played a three-minute video on the scoreboard in the west end zone, stitching together historic footage of both the Bills and New Era, a sponsor for 15 years whose links to the team stretch back even further. Frank Cravotta, executive vice president of creative services for Pegula Sports and Entertainment, the Bills’ parent company, produced the video, which featured Koch’s voice-over on some New Era ads. Toward the end, with background music befitting an NFL Films production, John Murphy, the voice of the Bills, announced, “Welcome to New Era Field.”
“It was a pretty powerful moment and it galvanized the ideas we had about forming this partnership,” said Bruce Popko, executive vice president for business development for Pegula Sports and Entertainment, who was also at the presentation.
Tears ran down Koch’s cheeks as the video played out. He thought about the hundreds of Bills games he had attended over the years, “both the highs and the lows … and to put that all together with our history and what we stand for.”
Afterward, McAdam whispered in Koch’s ear, “We’ve got to figure out how to make this happen.” Koch shook hands with the Pegulas and they went upstairs to share a bottle of 2009 Chateau Margaux in a club space overlooking the field.
“Since then, the momentum has been building and we came to a good spot for both partners,” Koch said. “It kicks off another chapter in our history with the Bills and our city.”
In a show of respect to Wilson, the Bills’ original owner, the Pegulas did not act quickly to sell the rights. They decided to let the 2014 and 2015 seasons serve as a platform to honor Wilson’s legacy.
But there has been a heightened effort to increase revenue across Pegula Sports and Entertainment and especially for the Bills, after the cancellation of the series of regular-season home games in Toronto and its incremental revenue stream ate into the team’s bottom line. The Pegulas have also been clear supporters of league efforts to grow revenue: They sided with the relocation of the St. Louis Rams to Los Angeles this year, and Terry Pegula dined with the large-market owners the night of the decision.
In February, the team hired Premier Partnerships as a consultant to help form a strategy and attach a value for naming rights.
“We talked about moving the Bills forward, and I think that was very representative when we bought the team,” Kim Pegula said.
As talks heated up over the past six months, Brandon reached out to Wilson’s widow, Mary Wilson, and his niece, who had worked for the team, Mary Owen, to tell them of the proposed name change. Kim Pegula described them as understanding but at the same time saddened.
“Sure, there was a sadness … [but allowing us to sell naming rights] was what Mr. Wilson wanted,” Pegula said.
The deal with New Era, sources said, is valued in the mid- to high seven figures annually. It should bring the team $50 million to $60 million over the course of the seven-year term, a much-needed influx for a franchise with a limited corporate base in Buffalo.
The deal’s length coincides with the number of years the Bills have left on their lease at the stadium, which is owned by Erie County. The Bills could potentially build a new stadium after their lease expires, and the team’s ability to sell naming rights in that situation is subject to negotiations with the city and county, Popko said.
For New Era, whose brand adorns multiple team stores in big league markets, the discussions about naming rights had come up over time in casual conversations between Koch and Brandon, who have known each other for 25 years.
“With everything that transpired when Ralph died and the Pegulas taking over the team, the last six to nine months Russ and I talked back and forth about it,” Koch said.
The company represented itself during the negotiations. Activation will include media, hospitality and an expanded presence in the Bills team store.