AEG stadium to get $1B, 30-year naming rights deal?

That rumored naming-rights deal for an AEG-built Los Angeles NFL stadium is now … well, still rumored, but now rumored to be done instead of “close.” According to the Associated Press, Farmers Insurance will pay $700 million over 30 years for naming rights to the as-yet-nonexistent stadium, plus an additional $300 million if it plays host to two NFL teams.

AP calls this “a stadium deal worth up to $1 billion,” which isn’t really right: $1 billion would be the maximum nominal value (adding up all the yearly payments), but that isn’t the same thing as present value. (Using the nominal value is like saying the value of your mortgage to the bank is the total of all your monthly payments over the next 30 years.) If my Excel skills can be trusted at this time of the morning, the actual value of the naming-rights deal in terms of “how much of the up-front stadium construction cost could this pay off?” is around $500 million max, $350 million for a one-team deal — still far from chicken feed, but not enough to pay for the whole thing as the headline might lead you to believe.

Nonetheless, this would be the largest naming-rights deal in history by a fair margin, which if nothing else indicates that the naming rights bubble has reinflated. Whether the curse will be restored with it remains to be seen.

Share this post:

7 comments on “AEG stadium to get $1B, 30-year naming rights deal?

  1. 700 MILLION DOLLARS!!! For naming rights?!? If true I guess we know where a big chunk of the funding is coming from. But it’s just mind boggling… they could put a billboard up next to the stadium and it would get as much play as the name on the outside of the stadium and it wouldn’t cost 1/1000th that…

  2. It’s not about the fans at the game – it’s the TV viewers. This is basically a stealth way to force the broadcasters to say “Farmers Insurance” a dozen times every Sunday.

  3. Well, I honestly think this is a back-room deal with the Spanos Family for the 35% minority interest in the Chargers, which will move them to Farmers Field.

    Second, I’m going out on a limb and that’s Stan Kronke who runs the “NFL to LA” relocation committee will sell the Rams to Casey Wasserman’s group and he’ll purchase the Denver Broncos before his 2014 deadline (which also is the last year of St. Louis’ lease with the Rams) and he can keep his Denver sports monopoly with the Nuggets, Avalanche, Rapids and now add the Broncos. Once that happens, Farmers Insurance would be paying an extra $300 million which brings out the naming rights deal to an even $1 billion dollars.

    So when Farmers Field opens in 2015, I fully expect the Chargers, Rams & USC Trojans to play at the stadium along with stealing the San Diego International Comic-Con as well with Super Bowl L being played in Feb. 2016 at Farmers Field. Watch the quick back-door deals between the politicians.

  4. Well they won’t get Comic Con. SDCC just committed long term to the San Diego Convention Center after the city agreed to expand the convention center again. But the rest of your theory may come to pass. Listening to the sports talk radio guys in San Diego today you’d think the Chargers had already signed the agreement to leave.

  5. Assuming this field gets built, not a done deal, they will not get Comic Con. SDCC is committed to San Diego until 2015. After wards? Who knows?
    But if the stadium is under construction, it won’t be going to LA. Anaheim maybe, but not LA.

Comments are closed.