The Los Angeles Clippers have been given the go-ahead to build a new arena in the Southern California city of Inglewood. This came after some major fights between Clippers owner Steve Ballmer and local political leaders.
The venue is slated to open in time for the 2024-25 season and will ultimately lead to the Clippers ending their awkward tenant relationship with the hated Lakers. It’s also expected to cost about $1 billion in cold hard cash, a sum that will be privately financed.
The Clippers now have some seemingly good news on the financial front when it comes to this yet-to-be-build venue.
Recently, companies have paid up to $400 million for the naming rights of new venues around the sports world. Working with Creative Arts Agency (CAA), the Clippers are now looking to set a new market standard.
“We have set an ambitious goal to provide disproportionate value to a naming rights partner by having them in-place before a shovel hits the ground in Inglewood,” Clippers President of Business Gillian Zucker said in a statement. “This aggressive timing will provide a unique opportunity to incorporate our partner’s brand into the design of the construction and deliver their own personal touch to this amazing facility.”
It’s not necessarily a surprise that a venue in the nation’s second-largest media market would draw interest from corporations. The Clippers themselves have also been built into a national brand since Ballmer, the former CEO of Microsoft, purchased the team for a cool $2 billion back in 2014. The latest Forbes’ estimates has these Clippers worth $2.6 billion.
Even then, a record-breaking naming rights deal would fit with some of the ridiculous numbers we have seen recently.
- CAA helped the Golden State Warriors net between $15 and $20 million annually over a 10-year span from Chase for the naming rights to their new San Francisco arena back in 2019.
- More recently, the Las Vegas Raiders received up to $25 million annually from Allegiant for the rights of the airline company to be the name of the NFL’s newest stadium.
- Amazon paid between $300 and $400 million to the NHL’s newest franchise, the Seattle Kraken, in order to name their venue Climate Pledge Arena.
Naming rights for venues throughout the sports world have been a growing business entity over the past quarter century. It started with the modernization of venues within the NFL and MLB worlds and has now been extended to both the NBA and NHL.
It’s no small thing given the revenue downfalls professional sports teams in North America are seeing due to the COVID-19 pandemic. Even as the richest owner in professional sports, Clippers head honcho Steve Ballmer is feeling the effects of this revenue downtick, too.
At the very least, Ballmer and Co. will see some of the money they spend on the new Inglewood venue return to them in the form of a potential record-breaking naming rights deal.