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Want to know how Farmers Field's sponsorships will work? Just look at AEG's deal with Delta

February 10, 2011 | 11:56 am

Staples Center

AEG Live may be knee-deep in discussions for its proposed football stadium in downtown Los Angeles, but that hasn't kept the company from business as usual elsewhere.

The company on Thursday announced it has snagged Delta Airlines as one of 10 "founding partners" of Staples Center, alongside Toyota, Wells Fargo, American Express Coca-Cola and others.

What does that mean? Though exact terms of the multiyear deal were not announced, sponsors in general receive a panoply of prominent signage in and around the center that is seen by thousands of event-goers and millions of television viewers (when games at the arena are broadcast).

In exchange, each sponsor pays between $3 million and $5 million a year for what is essentially ad space. (AEG also gives preferential treatment to sponsors by making them exclusive vendors for the venues, serving Coca-Cola products at its concessions, for example.)

Multiply that by 10 sponsors, and the 11-year-old Staples Center can ring up between $30 million to $50 million a year.

Why is this interesting? AEG will likely to apply the same model to Farmers Field, the $1-billion stadium that the company is proposing to build on what is now the site of the West Hall of the Los Angeles Convention Center.

Because AEG is a privately held company that does not have to report its revenue and profits to the public, much talk has been devoted to speculation about how AEG will finance the stadium. Angelenos got part of the answer on Feb. 2, when AEG announced a $700-million multiyear deal with Farmers Insurance to name the stadium after the company.

But wait. There will be more. And the Delta sponsorship provides a potential blueprint for others to come.

-- Alex Pham 

Photo: Staples Center, which opened in October 1999. Credit: AEG Live

 

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