The village of Bridgeview, which owns the venue, had about $260 million of general obligation debt as of February, much of it tied to the stadium. It has doubled property taxes on its 17,000 residents and recently took on added debt to help cover revenue shortfalls from the venue.
The town will be paying debt service for the stadium for the next 26 years, quite possibly “well beyond the useful life of the stadium,” according to S&P Global Ratings. Last year the agency downgraded Bridgeview’s credit from investment grade to junk.
The terms of the deal weren’t announced. Eric Smallwood, who advises companies on naming rights deals and other marketing initiatives, estimated a price between $2.5 million and $4 million per year. As part of the deal, SeatGeek will work with Spectra Management, which runs the stadium, on bringing more events to Bridgeview.
Non-soccer events, and the team’s exclusive broadcast deal with ESPN’s new digital service, should add exposure, Smallwood said. The stadium is also the home of the Chicago Red Stars, the city’s professional women’s soccer franchise.
Even though Toyota’s original 10-year naming rights deal expired in 2016, the stadium is still known as Toyota Park. It will be renamed SeatGeek Stadium following the current MLS season.
The deal is a first for SeatGeek, which was founded in 2009 with the aim of using a mobile-focused product to claw out space alongside industry incumbents. Its early marketing efforts focused on online ads that encouraged users to click through and buy tickets. Now, as the company gains name recognition, it’s starting to treat itself as more of a brand. SeatGeek is running TV ads for the first time and recently released a series of digital shorts.
“The naming rights deal is an important part of that growth,” said SeatGeek co-founder Russ D’Souza. “Obviously you can’t scale this the way you can with TV ads, we’re not going to buy every naming rights deal out there, but there will be a lot of learning that comes out of this.”
©2018 Bloomberg L.P.