AUSWR
The Association of U S West Retirees
 

 

 

Qwest looks to make mark
Colorado Rapids stadium could be next naming deal
By Beth Potter, Staff Writer
Denver Post
Sunday, December 4, 2005

Qwest Communications is in the running to emblazon its name on the $50 million Colorado Rapids stadium being built in Commerce City.

"It's safe to say that we have had some discussions," said David Ehrlich, executive vice president at The Bonham Group, a Denver sports marketing company handling the naming rights deal on behalf of Kroenke Sports Enterprises, which is building the stadium.  "Do they match up well?  They seem to."

If it "makes sense, and it's a very high bar," Qwest would consider the stadium naming deal, said chief executive Richard Notebaert.  He would not confirm talks with The Bonham Group about the Rapids.  "There's nothing to be gained by speculation."

Since Notebaert took over Qwest in 2002, the former Baby Bell has done three major naming rights deals in its 14-state region -- even as it pulled out of a financial tailspin caused by accounting fraud that predated Notebaert and led to a $2.5 billion restatement of revenues in 2003.

But Qwest has not yet done a big naming rights deal in Denver, its hometown.

Notebaert didn't say why.  But he said that when Qwest considers any such deals, it's part of a strategy that makes financial sense and serves the community.

"We don't do sponsorships, because that's like a billboard," Notebaert said.

Qwest so far has pledged:

-  an estimated $14 million for a 15-year deal naming the Qwest Center in Omaha in September 2003, home to college and minor-league sports teams.

-  an estimated $60 million over 15 years in June 2004 to name the Seattle Sea hawks' home Qwest Field for 15 years.

-  an estimated $4 million in October for a 15-year deal to change the name of the former Bank of America Centre to Qwest Arena in Boise, Idaho, where minor-league hockey and basketball are played.

Qwest declined to discuss the details of the deals for competitive reasons, said Rich Karlis, director of Qwest community relations since 2002 -- and a former Broncos place kicker.

Qwest makes its sports plays elsewhere in region

Sports marketing analysts said the deals provide branding opportunities in competitive markets and can provide a healthy return on investment.

"If it's producing $2 million per year, and they're paying $4 million over 15 years (in Idaho), for example, that's a very good investment in that market," said Cindy Shevrovich, senior executive vice president at Joyce Julius Sport Marketing and Evaluation in Ann Arbor, Mich.

She said $2 million per year is a good estimate, given the marketing returns on sports venues across the country.  That's calculated by the number of times the company's name is mentioned in print, radio and TV and comparable costs for buying advertising in those media, she said.

On average, an NFL stadium sponsor -- such as Qwest in Seattle -- gets a $12 million per year return on investment, based on print, radio and TV coverage of games, people at the stadium seeing the sponsor's signs, and promotions and advertising, including billboards and Internet media, said Shevrovich.

In addition, Qwest gets up to $2 million per year in direct revenue for providing telephone services to the Seahawks and related businesses, said Steve Sander, president of Pure Brand Sports and Entertainment in Denver, who followed the negotiations but was not involved.

Qwest's direct sales to the Seahawks -- making money by providing phone and Internet services -- are unique, Sander said.

"The name awareness among consumers is valuable, but I think Qwest is very smart and strategic because it uses the naming rights to create business development opportunities for the company," Sander said.

In Omaha, the Qwest Center promotes Qwest's brand name in a market where it is under heavy assault from Cox Cable.

The 17,000-seat center is home to sports teams as well as major music acts such as U2, Dave Matthews and the Rolling Stones.  It ranks No. 8 in ticket sales for venues its size in the world in a recent survey, just behind Madison Square Garden, said Dana Dyksterhuis, the center's public relations manager.  By comparison, Denver's Pepsi Center ranked 31st in the same survey, Dyksterhuis said.

Why hasn't Qwest done a deal in Denver?

Qwest wasn't interested in bidding for Denver's last big sports venue naming contest in 2001 -- what became Invesco Field at Mile High -- because of focus and finances, said Matt Yonan, president of Tigris Sponsorship and Marketing in Littleton.

Invesco pledged to pay $120 million over 20 years.  There is some speculation that Invesco's parent company -- Amvescap -- may seek to rebrand the stadium.  It has given no indication that it wants to end its contract, according to Ray Baker, chairman of the Denver Metro Stadium District.

Baker said Qwest has never approached him.

Qwest predecessor US West passed up a chance in the mid-1990s to name what became the Pepsi Center, the facility now owned by Kroenke Sports, which also owns the Denver Nuggets and Colorado Avalanche pro teams that play there.

Pepsi reportedly paid $35 million over 20 years.

US West, which was bought by Qwest in 2000, did buy naming rights to Colorado's Ocean Journey.  The aquarium went bankrupt, was bought by Landry Restaurants Inc. and is known simply as the Downtown Aquarium.

Asked recently why Qwest had never done a big naming rights deal in Denver, Notebaert quickly shot back, "Do you know of any available?"

There are several, including minor-league baseball facilities proposed in Aurora and Arvada;  and the 5,000-seat auditorium in the Colorado Convention Center.

Across the country, Fortune 500 corporations have sought to promote themselves in their hometowns -- and elsewhere -- by naming pro systems.

Houston-based Reliant Resources paid $300 million for 32 years to name Reliant Stadium in Houston, while Dallas-based American Airlines paid $195 million to name the American Airlines Center in Dallas.

FedEx Corp., which is based in Memphis, agreed to pay $90 million over 20 years to name the Fed Ex Forum, where the NBA's Grizzlies play.

FedEx also struck a $205 million, 27-year deal to name Fed Ex Field in Landover, Md., where the Washington Redskins play.

When asked about Qwest's strategy in naming rights deals, Qwest spokesman Chris Hardman said, "We keep an open mind, and if an opportunity meets all of our criteria, we will consider moving forward."

As for the Rapids, The Bonham Group and Kroenke Sports declined to say what other companies are in the running.  Kroenke is reportedly seeking a 20-year naming rights deal.

Earlier this year, Pizza Hut agreed to pay $25 million over 20 years to name Pizza Hut Park, a pro soccer stadium in Dallas.

While Denver remains a question mark, Qwest continues to do sports branding deals elsewhere in the region.

Qwest last month said it will sponsor the Minnesota Timberwolves for an undisclosed sum in return for TV and radio ads and courtside signage at the Target Center in Minneapolis.

Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.


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