Staples Center's name will never change, new agreement says

The 10-year relationship between Staples Inc. and AEG, which brought us the Staples Center of sports and entertainment fame, is moving to the next level: forever and ever.

Staples’ original naming-rights agreement with AEG has been “extended in perpetuity,” the two companies said. AEG contends that the arrangement is “the first lifetime naming rights extension for a major market arena.”

The office supply store chain promised to pay almost $120 million in 1999 to put its name on top of Staples Center for 20 years. Neither party revealed how much more Staples will pay to lock up the rights for good, saying only that it was a fee previously agreed upon in their contract.

“The lifetime piece to this sets a new precedent,” said industry watcher Dave Brooks, a senior writer at Venues Today magazine. “AEG accomplished something unique in pro sports.”

Brooks speculated that Staples’ annual payments to AEG could change depending on how well its namesake arena continues to perform as an entertainment venue. If, for example, the Clippers basketball team is someday sold and moved to another city, Staples would get less exposure, so its payments might go down.

So far, however, Staples Center remains “a very prestigious building,” he said. It houses about 250 events annually, including games played by the world champion Los Angeles Lakers. The Grammy Awards and the Pac-10 basketball championships also are held there.

By Venues Today’s estimates, Staples Center is the No. 3 concert venue of its size in the world, grossing $43 million on 70 shows last year. Only Madison Square Garden and the O2 arena in London, which is also owned by AEG, took in more.

“A long list of sports champions, community leaders and entertainers have had some of their greatest moments at Staples Center, and we look forward to many more,” said Mike Miles, president of Staples.

The Framingham, Mass.-based company is one of 10 that pay AEG substantial annual fees for naming rights, said Todd Goldstein, president of AEG’s sponsorship division. Other large sponsors include American Express, Nokia and British mobile phone provider O2.

AEG expects to gross more than $250 million from selling naming rights this year, Goldstein said.

-- Roger Vincent

Fans gather outside the Staples Center to pay their respects to singer Michael Jackson during the Michael Jackson public memorial service held at Staples Center on July 7, 2009 in Los Angeles, California. (Photo by Sandy Huffaker/Getty Images)

Comments

[Sal]

Nothing is forever.

[Thomas Hamilton]

No mention of the Kings. Ouch.

[Skeptical]

What happens if Staples goes out of business, or decides that having their name on the building isn't worth all that much anymore? Then what?

[Rich]

The guys who bargained this deal are minor geniuses for having cooked up an arrangement which enabled a big-money deal and the company boards which accepted it are major chumps for locking themselves into an arrangement which is sure to become troublesome. Knowing the way of the world, in 20 years this arena will sit rotting away with earthquake damage as the city and Staples argue about the name while AEG disappeared years before into bankruptcy. It's like a script you can write without having to know any particular facts...

[tracy]

the con artists at aeg have pulled off another one - and staples is clueless for paying whatever exorbitant sum to put their name on an inanimate object in the vain hope that i and others will favor their stores over the competition just because they entitle a place where the overpaid crybabies of sports and entertainment display their "skills.' Want to make a real investment, Staples? Why not take the millions you spent on this useless exercise and endow a university program...or 2 or 10? I'm sure the UC or CSU systems would happily put your name on something that would really make a difference. Excuse me, I'm off to Office Depot...

[K]

Sometime in the 1990s we got the pleasure of going to see Broadway plays at the American Airlines theater or to see the San Antonio Spurs play at the Southwest Bell (now AT&T) Center. I think it's tacky for buildings designed for public use to be named after corporations. It's like museums naming wings after living people. And if someone out there is really mad because if we take away naming rights we have no way of thanking corporations for their money (and tax write offs) we can always send thank you notes. Sometimes there's virtue in anonymity.

[Carl01]

I'm going OfficeDepot and OfficeMax for my shopping...

[Laker]

"Staples Center's name will never change..."
So long that Staples stays in business....Because with today's economy, we haven't even started seen retailers go out of business. For those who see the light at the end of the tunnel, ...It started from the banks, but we didn't even enter the tunnel (of failures) yet.