PB bank to pay $10.5M to put name on arena
Simmons Bank is set to sign a $10.5 million deal to rename Verizon Arena beginning in 2019, arena officials announced Friday.
The five-member Pulaski County board that oversees the venue unanimously voted to accept a bid from the Pine Bluff bank for a 15-year agreement, effectively ending speculation about which company would attach its name to the North Little Rock complex.
Verizon Arena General Manager Michael Marion said the bank had approached the arena to propose the arrangement, and that he had been “pleasantly surprised” by the overall level of interest in the naming rights.
“That’s what’s been amazing about this; the people reached out to us,” he said. “We’re going to take this money and make some improvements.” The announcement Friday of the agreement with Simmons Bank bypasses arena officials’ original plan to put together a request for proposals from prospective bidders because there was “so much interest there was no need,” marketing director Jana DeGeorge wrote in an email.
Marion declined to name other companies that had approached the arena about
the naming rights, saying he had been asked to keep their overtures confidential, but noted there was a “fiduciary duty to the taxpayers” for the publicly owned arena to get the best deal.
Arena managers announced a search for a new naming-rights sponsor in September after being rebuffed by Verizon, where officials with the telecommunications company said they’d decided not to renew the sponsorship when it expires next fall.
At the time, Marion — who also oversaw the original naming-rights agreement with Alltel for the venue, as well as a name change from Alltel Arena to Verizon Arena after the merger of those companies — said he was hoping for a more financially advantageous setup, as the terms of the initial contract had not provided ongoing operating revenue.
PAYMENT STRUCTURE
As detailed in a memorandum of understanding between the two groups, the agreement with Simmons Bank is expected to net the arena $650,000 per year during its first five years, $700,000 per year in the following five years and $750,000 per year in its final five years.
The payment structure is set up that way because the value of the agreement goes up as time goes on, Marion explained. A contract could be finalized within the next 30 to 60 days, according to Elizabeth Machen, the senior vice president and director of marketing and communications for Simmons Bank.
Machen said the Simmons Bank offer came together after hearing news reports that the arena was looking for a new sponsor. She said company officials took note of social media chatter suggesting that the company should make a play for the rights.
That buzz, plus the opportunity to reach clients across states and a sense of the arena as an asset to central Arkansas, where she said Marion’s management helps the venue compete above its weight class, all fed conversations about a bid.
Chris White, Simmons Bank’s central Arkansas market president, said he also had been impressed by experiences in a client box the company had maintained there, more so than in other venues, which had helped familiarize the company with the property’s value.
“I think it’s great. I can’t wait. I’m ready for 2019,” he said.
Machen said the company looked at regional naming-rights arrangements such as BOK Center in Tulsa and Wells Fargo Arena in Des Moines, Iowa, to research its offer.
Simmons Bank’s marketing team has taken a closer look at naming-rights arrangements because of the fragmented media and advertising environment, feeling that they offer “a level of client engagement that, maybe, traditional mass media doesn’t give you,” Machen said.
In May, a gift from the bank renamed a football stadium at the University of Arkansas at Pine Bluff to Simmons Bank Field. The company also will sponsor December’s King Cotton Classic basketball tournament in Pine Bluff, she said.
Simmons Bank operates roughly 200 branches across Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas and manages about $16.3 billion in assets, according to a news release.
Chris Foy, whose Denver firm Impression Sports & Entertainment specializes in naming-rights deals, said that without reviewing the specifics, the arrangement unveiled Friday “appears to be a very solid deal for the venue,” though he said its value for the bank will be determined by how well the sponsor makes connections with arena visitors.
In an earlier interview with the Arkansas Democrat-Gazette, Foy had projected that the eventual sponsor would likely be a banking or health care company with Arkansas ties.
Verizon Arena opened as Alltel Arena under a $7 million, 20-year naming-rights deal in 1999 and changed its name after the 2009 merger of Little Rock-founded Alltel with Verizon Wireless. It hosts more than 400,000 visitors each year for concerts, family and sports events.
IMPROVEMENT PRIORITIES
With the prospect of incoming funds, Marion said he’s been collaborating with the venue’s operations director on a priority list of improvement projects.
New seats on the upper level, a new roof or a revamped heating and air-conditioning system all could be in the works, he said.
Arena officials also will turn their attention to the moving parts of a naming-rights change, where everything from signs to shirts for arena employees to napkins will be on order.
Officials also will work with Simmons Bank to craft a new logo and sort out other key details.
In the arena’s administrative offices Friday, employees discussed locking down several possible Twitter handles that could reflect the new name, which has not yet been finalized.
“Honestly, we don’t know yet,” Marion said. “Everyone agrees we need to figure that out.”
As detailed in a memorandum of understanding between the two groups, the agreement with Simmons Bank is expected to net the arena $650,000 per year during its first five years, $700,000 per year in the following five years and $750,000 per year in its final five years.