USC recently leased the naming rights of the LA Coliseum to United Airlines (UAL) for a record $70 million over 15 years, with most of the proceeds going to subsidize the stadium’s (much-needed) $270 million renovation costs.
This deal becomes the highest price paid for a college football stadium naming rights, a record that will stand for some time. Outside of the fact that the Coliseum resides in the second largest media market in the U.S. and that this will mark the first time the Coliseum will have a name-change in its 96-year history, the unique external factors surrounding of the Coliseum were the real reason why this deal warranted such a high valuation.
The LA Coliseum will not only host the USC Trojans football team but the LA Rams will call it home for the next three NFL seasons (maybe more depending on the construction of the Inglewood stadium). As Kevin Hisey noted, the valuing of stadium naming rights considers many factors but the attachment of an NFL team instantly skyrockets the price. Currently, the LA Rams are the only NFL team that plays in a college stadium, a scenario that will unlikely be replicated in the near-future.
There has been much debate about whether Los Angeles will host the Olympics in 2024 or 2028, and whether the opening ceremonies will be localized solely at the Coliseum or split time with the new arena in Inglewood. But few will argue that the Coliseum will be integral in the Olympic games in either 2024 or 2028. Because of this, United Airlines come off as an “unofficial” sponsor of the Olympics without the normal $100 million price tag of official sponsors.
The timing for United Airlines couldn’t be better as well. They will use the indirect association with the Olympics and the NFL to obscure the recent negative headlines involving its infamous “passenger dragging” incident. Also, United Airlines will generate some international goodwill from the Olympics brand, mainly since the incident involved a Chinese national.
Even though the exact details of the extras involved in the deal remain uncertain, the unique conditions create a scenario unlikely to be replicated by any other college stadium thereby ensuring this record deal will stand for some time.
Edwin Draughan is an MBA student at USC Marshall School of Business. He can be reached at email@example.com.