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.