StubHub Center, home of the LA Galaxy, is among several Major League Soccer stadiums in search of new naming-rights deals. (Getty Images)
Companies operating in the gaming space have had discussions with at least three Major League Soccer teams on buying naming rights for their stadiums, as the category shows signs of bursting open with big deals at the highest level of sports sponsorship.
The Philadelphia Union, New York Red Bulls and LA Galaxy are all searching for new naming-rights partners, sources said. Their timing couldn’t be better, as the Supreme Court’s decision earlier in the year that individual states may legalize sports betting in their communities has opened up new opportunities for rich partnerships with the sector.
MLS prohibits sports betting sponsorships among its 23 teams, but the league is reportedly expected to approve the category for the 2019 season.
Chris Allphin, a senior vice president with Van Wagner Sports & Entertainment and a naming-rights consultant, predicted a gaming firm would soon put its name on an MLS facility.
“It’s going to happen,” he said. “People in that league are risk takers.”
Sports betting is legal in New Jersey and Pennsylvania, but it remains illegal in California.
AEG, which owns StubHub Center in Carson, Calif., and the Galaxy, is asking for $5 million a year for a new naming-rights deal, said Rob Yowell, president of Gemini Sports Group, a sports marketing agency. The topic came up during discussions AEG and Yowell had over his client Sportsyard. The daily fantasy site focuses on MLS and English Premier League matches with a peer-to-peer betting platform using blockchain technology. Daily fantasy games are legal in California.
In light of recent events, StubHub, whose deal expires in mid-2019, is not expected to renew naming rights for the complex, which encompasses the MLS stadium and multiple Olympic training venues. In 2013, the ticket reseller signed a six-year agreement for the former Home Depot Center. The deal came on the heels of a separate deal AEG signed with eBay, StubHub’s parent firm, which made StubHub the official ticket reseller for all AEG buildings worldwide, including Staples Center.
The resale deal went away after AEG announced in September the launch of its own secondary ticketing platform tied to AXS, the primary ticketing system for venues that AEG owns and/or operates. As a result, AEG/AXS is now a direct competitor with StubHub, which poses a conflict between the property and its partner.
“The naming rights will be made available,” Yowell said.
An AEG spokesman said the company had no comment. StubHub could not comment, a company official said.
The Red Bulls have tried to find a naming rights partner for the past three years. Most recently, the team has talked to gaming firms about naming rights, but they would not identify the companies, a Red Bulls spokesman said.
Fenway Sports Group, the agency handling the negotiations to sell naming rights for the Red Bulls, would not confirm which gaming firms they’re talking to, said Mark Lev, Fenway Sports’ managing director.
Fenway Sports took over for MP & Silva, which had teamed with Leverage Agency to sell naming rights for Red Bull Arena, but the agencies could not get a deal done for the stadium, which opened in 2010.
At one time over the past 18 months, the Red Bulls were asking for $6 million to $8 million a year for naming rights, said Chris Lencheski, a sports marketing veteran who sits on the board of MP & Silva. The numbers would put the Red Bulls among the top three MLS teams for naming-rights value, but it’s unknown whether those terms remain in play, Lencheski said.
In Greater Philadelphia, Oak View Group, which owns VenuesNow, is working for the Union to sell naming rights for Talen Energy Stadium, confirmed Tim McDermott, the team's chief business officer. Talen Energy's deal expires at the end of 2020.
Together, OVG Global Partnerships and the Union have been in talks with five to 10 gaming brands, distributed among casinos and betting technology firms, McDermott said. He would not identify those companies and how much the Union is asking for naming rights.
In early October, the state of Pennsylvania issued its first two sports betting licenses to Parx Casino and Hollywood Casino. The licenses carry one-time fees of $10 million.
As the Union goes through the process of finding a new partner, McDermott said it's going to be a while before decisions are made on which brands can be marketed by sports betting licensees.
"We're in a holding pattern right now with the regulations and policy makers," he said. "The league has been supportive of us in evaluating these potential relationships."
Lencheski previously worked for Comcast Spectacor, which had the Union as a client. He said it makes sense for the team to sign naming rights with a gaming entity, considering several casinos and horse tracks operate within a one-hour drive in Delaware and New Jersey.
“It’s an interesting play,” Lencheski said. “There are two casinos alone within 40 minutes of Philly.”
SportsYard, founded in November 2016 by entrepreneur Carrie Sattler, has been in talks with several MLS teams over potential sponsorships to brand physical spaces, some of which are in states where sports betting has not been approved, Yowell said.
In 2017, Sportsyard was a finalist for naming rights to the old Qualcomm Stadium in San Diego, where the tech firm is based. For that deal, under the terms of a one-year, $500,000 agreement, Sportsyard planned to use naming rights to build brand awareness through its soccer fantasy contests, according to a copy of Yowell’s proposal posted online.
The city of San Diego owns the stadium and signed a one-year deal with the San Diego County Credit Union under the same terms as SportsYard proposed. The 51-year-old building has San Diego State University football and the Holiday Bowl as primary tenants.
“They took the credit union because we were new at the time,” Yowell said.
In California, it’s just a matter of time before the state legalizes sports betting, he said.
“As soon as California goes, everyone else will fall in line,” Yowell said. “And how does that affect the new NFL stadium in Inglewood? You see the crazy numbers some of these casinos generate. It’s a fun category to watch.”