Bucks slow pursuit of partner
Team seeks business to provide arena its name
For months, Milwaukee Bucks President Peter Feigin had a simple answer when asked about the naming rights deal for the new arena: Soon.
Soon is coming much later than expected for a deal that the Bucks believe is worth up to $200 million, will last 20 years and serve as the financial linchpin to the $524 million downtown arena project.
And it’s clear that securing a naming rights partner is far more complicated than simply putting a local company’s name in lights on the side of the building. It’s evolved into an international effort that’s banking on the NBA’s explod-
ing worldwide audience.
In the past several months, Feigin and the Bucks owners have done a reset in the high stakes search for what will be their most important business partner. The strategy change came after the team had several prospects close to signing, only to lose them at the 11th hour.
The Bucks brass has traveled overseas and cranked up the publicity machine to talk up the new arena, the team’s growing popularity and the naming rights opportunity. They have made high-profile media appearances, such as on the internationally broadcast CNBC show “Squawk Box,” and interviews with the BBC and Bloomberg News.
Initially, those appearances seemed aimed at sealing a deal with Foxconn, the Taiwanese company that’s planning a massive technology campus in Racine County.
Feigin courted Foxconn executives with dinner meetings and appearances at every public event tied to the tech company’s plans, including the signing of legislation with $3 billion in state incentives.
Foxconn, however, is no longer in the running for the arena name.
“We have talked to Foxconn in earnest,” Feigin said in an Oct. 30 appearance on “Up Front with Mike Gousha.”
“We will probably form a partnership, whether it is naming rights or not,” he said.
That puts Foxconn in the same boat as key local businesses such as Johnson Controls, Harley-Davidson and BMO Harris, which are supporting the Bucks but not as naming rights partners.
“We have a lot of prospects that we’re talking to,” Feigin said Nov. 16 during a Milwaukee Press Club appearance. “They’re very exciting deals. They’re very complicated.”
He underscored the complicated part.
“As soon as we get it, they’re built into the infrastructure of the building,” he said, noting that a lot of deals “have to do with technology, have to do with literal physical assets.”
In an interview, Feigin said the Bucks were now focusing on international companies in the technology and insurance sectors. None are local companies, he said, declining to provide additional details.
Feigin calls the naming rights the “cornerstone” of the arena project.
“We’re really looking for that most important partner. We’re being very strategic,” he said Nov. 16 on the Forbes Sports Money podcast.
Feigin and other team officials have said they are seeking $7 million to $10 million a year for up to 20 years. The most recent NBA naming rights deal came in 2015 when Golden 1 Credit Union agreed to a $120 million, 20-year deal with the Sacramento Kings.
By comparison, taxpayers are paying $250 million toward the arena project. And the team has a four-year, $100 million deal with its star player, Giannis Antetokounmpo.
Any money raised through the naming rights is budgeted the go toward arena operations, Feigin said. The team has promised not to hit up taxpayers for additional support.
Feigin admits that the long-term commitment could be daunting for some companies.
But the Bucks believe that the growing interest in the NBA will pay off for a sponsor, especially when it comes to reaching consumers in China.
“Basketball is the world’s game,” Feigin said Nov. 11 on the “Moose & Maggie Show” on CBS Sports Radio. “We haven’t even scratched the surface.”
He added: “Our goal is like constant growth. When you talk about a world population, it’s almost limitless.”
A recent home Bucks game broadcast online in China drew an audience in the millions, he notes as part of the naming rights sales pitch.
One expert, sports marketing economist Andrew Zimbalist of Smith College, thinks the Bucks’ price is too high.
“Consumer demographics are shifting and media distribution is changing,” Zimbalist said in an email. “Together, they appear to be lowering the returns on franchise-connected advertising.”
He said it was more difficult for the Bucks because Milwaukee is in such a small market. “Twenty years at $7 to $10 million (a year) is simply too long and too rich,” Zimbalist said.
Finding a naming rights partner is “a much longer process than I thought it was going to be,” Feigin said on the Forbes program.
He said that it was “not a small market decision,” because of the global reach of the NBA. Some 60% of the NBA’s digital audience is from outside the U.S., he said.
“As time goes on, (the number of ) our media impressions go up, our value goes up,” Feigin said.
The emphasis on digital international growth has paid off.
“We’ve pushed it, and it’s been much more of a hook than we thought it would be,” Feigin said in the interview.
There’s also the question of what comes with the naming rights deal — beyond the name and a prime luxury suite.
“Almost every prospect has at least a half-dozen tentacles” that tie to various ways to promote the partner business, Feigin told Forbes.
Those include working the company’s name into things like the Bucks’ payment and Wi-Fi systems, and also “real estate prospects in the district we’re building.”
“It’s not simple. It’s all terrific,” he said. “There are thousands of touch points in all of these deals.”
Feigin concluded his Press Club comments saying: “My promise to my owners is very simple: We will have a great partner and a great deal worth waiting a couple of months longer than we would have wanted it to.”