Boise State’s basketball venue will get a new name in 2019-20 — ending a 15-year run as Taco Bell Arena.
The Taco Bell name has been on the building formerly known as The Pavilion since August 2004 as part of a $4 million naming rights agreement. That deal expires July 31, 2019, and the local company that signed it has informed Boise State that it doesn’t plan to renew.
The school already has started shopping the naming opportunity and expects to generate more revenue this time.
“They’ll do a lot better this time around,” said Chris Allphin, who handles naming rights deals as senior vice president of New York-based Van Wagner Sports & Entertainment. “... They’re pretty far under market rate. For 2004, that’s probably a great deal.”
Boise State’s agreement is with ES-O-En Corp. of Meridian, which owns local Taco Bell franchises. The business was a key supporter of Broncos athletics before the arena naming and will be after it expires, Athletic Director Curt Apsey said.
“Our marketing strategy is different now than it was 15 years ago,” Carl Nicolaysen, owner of ES-O-EN, said in a prepared statement. “We are ardent supporters of Boise State, its student-athletes and its programs, including the Taco Bell Leadership Scholarship. You will still see us in the stands, cheering for the Broncos, and (we) look forward to continuing that relationship in the future.”
The contract called for about $200,000 per year in cash for the first 10 years and about $225,000 per year the last five years. The rest of the value came in the form of scholarship money, in-kind marketing and advertising and in-kind promotional items. In addition to the arena rights, ES-O-En received football and basketball tickets and other perks.
The Taco Bell deal came a decade before Boise State sold the name to its football stadium and just as naming rights to sports venues were beginning to take hold nationwide. The name was a somewhat controversial choice but has outlasted many of these types of contracts.
“We certainly had to do some justifying for that one, but Taco Bell got over the hump and so did we and it ended up being really good,” Apsey said. “... It’s been just a fantastic relationship with them. I think they really have a passion for Boise State and I think they appreciate what we’ve been able to do for them and their business with the naming opportunity here and other sponsorships that they’ve been involved with.”
Boise State made the Albertsons Stadium deal in 2014. That 15-year agreement pays $12.5 million — more than triple the value of the arena deal.
The arena attracts about 300,000 guests to about 100 events per year on average but can’t match the football stadium’s TV exposure.
“Football is still the needle-mover in this country for now,” Allphin said.
Boise State is working with a consultant to provide a valuation for a naming rights deal. Apsey declined to provide an estimated value.
“We’ve been working on that for quite a while and we’re starting to have some conversations with a few (potential sponsors) that have shown some interest in it, and even before the decision from Taco Bell was made.
“... It’s worth more than it was in 2003, I know that much.”
The market for naming rights is “hot,” Allphin said. He considers the sponsorships an efficient form of advertising because of the media exposure and the fact the name is often on TV screens during play. Naming rights also “convey leadership,” he said.
“It’s a really quick way to indicate you’re a legitimate player,” he said.
Fans have become so accustomed to name changes at sporting venues that the switch to a new name takes hold quickly, he said. Boise State hopes to land another deal of 10-plus years to ensure the new name will last.
The deal provides a chance to increase revenue for a department that has been trying to keep up with increasing costs to run athletics programs while dealing with the nationwide drop in football ticket sales and other revenue challenges.
“It was substantial for us,” Apsey said of the Taco Bell deal. “Hopefully we can generate a number that is fair for both parties, and obviously for us it’s a great source of additional revenue for what we’re trying to do for our student-athletes, and I’m excited about the opportunity for whoever it ends up being.”