Fresno State landed a $10 million naming rights deal with Valley Children’s Healthcare for its aging football stadium, but the deal could also put its athletics department in a financial bind.
The contract between the San Joaquin Valley giants, which was negotiated by the university and not the athletics department, includes a high degree of exclusivity that excludes other healthcare entities from sponsorship opportunities on the campus. As a result, the Fresno State athletics company had to modify its media rights agreement with Learfield/Bulldog Sports Properties, removing health care opportunities, and agreeing to take significantly less bankable revenue over the past few years. last five years of this agreement.
The contract with Learfield guaranteed the Bulldogs $3,245,000 in 2021-22, before the naming rights deal with Valley Children’s. The amended deal now guarantees the Bulldogs $2,695,000.
That’s a reduction of $550,000, and under the terms of the amended contract, the difference in that revenue stream will only grow in the years to come.
A Fresno State spokesperson, addressing initial expenses to activate and complete a naming rights partnership, said the athletics will receive an additional $1 million in operational support from the university in 2022-23.
“This is an extremely important partnership for Fresno State and will be financially beneficial over the 10-year term,” university spokeswoman Lisa Bell said in an email. “This partnership has been strategically entered into with Fresno State and Fresno State Athletics to provide a holistic approach to addressing important initiatives that align with both our academic and athletic priorities.
“Furthermore, over the next few years there will be additional factors that will most certainly ensure an improvement in the financial condition of Fresno State Athletics beyond the immediate annual reduction in media rights fees by Learfield due to the elimination of the healthcare category.”
But while Fresno State will receive $1 million in annual naming duty payments on August 1 of each contract year, it may end up having to cover losses elsewhere that it has created. Without additional annual support, which could come from multiple sources, the athletic department risks taking a hit in media rights costs.
A sharp drop in media rights royalties for athletics
Here are details of Learfield’s amended contract, obtained by The Bee via a public records request, comparing earnings before and after Valley Children’s naming rights deal was approved in July by the company’s board of directors. California State University:
Fees for guaranteed rights in the last two years of the contract are locked in, unless otherwise agreed between the university and Bulldog Sports Properties in accordance with the amended contract; the parties must meet no later than July 1, 2024 regarding an extension of their agreement.
Valley Children’s Healthcare’s annual revenue is to be split between health education with the university’s College of Health and Human Services and internships and scholarships focused on health professions with an emphasis on nursing , the amounts determined by the athletic department in consultation with the president of the university. Saúl Jiménez-Sandoval and Chief Financial Officer Debbie Adishian-Astone.
If the Athletics Department is reinstated each year from the loss of the Guaranteed Rights Fee, the remaining revenue for these programs, as well as any renovations to the Valley Children’s Stadium, decreases significantly.
If the athletic department receives only a portion of the annual naming rights payment, its operating budget could take a six-figure hit with the loss of broadcast rights.
Other Fresno State costs to Valley Children’s deal
The university under the contract with VCH must also pay for the production and installation of signage. He is also responsible for all maintenance and repair costs.
It also included several benefits in the deal. Rights include:
A premium tailgating point in the red lot outside of Bulldog Stadium, with the university to cover the cost of tents, tables, chairs, and lighting.
Up to 200 tickets for home football matches.
A skybox suite for every home game, including full catering up to $1,500.
Round-trip airfare for four on the team charter and four tickets to the best location available for road football matches.
A skybox suite sells for $35,000 to $40,000 per season, but a college source said Jiménez-Sandoval gave away one of his suites in the stadium to house Valley Children’s Healthcare as part of the deal and that It wasn’t an inventory of tickets that the athletics department monetizes.
The cost of a team charter will fluctuate depending on the type of aircraft and the distance flown. But he’s already paid by the athletic department to transport the team, coaches and staff.
Impacts of Naming Rights Exclusivity
As an example of this exclusivity in the naming rights agreement, a competing healthcare entity may no longer display public-facing signage that advertises or promotes any product or service in any of the parking lots. used for tailgating around Bulldog Stadium.
This exclusivity does not apply to Sierra Pacific Orthopedics, which provides medical and athletic training services to the athletics department.
Central California Blood Center and the Fresno County Department of Behavioral Health are also approved sponsors, but they cannot co-market with another healthcare system under the sponsorship.
Pacific Dental Services has obtained approval if at any time a health care network were to take over the business/enterprise, there would be an immediate conflict and the agreement would have to be terminated. It may not be affiliated with any health system and its signage and promotions must be limited to general dentistry; no dental surgery or pediatric dentistry.
The terraces of the San Joaquin garden, a living center for the elderly, are approved. But if it is sold or merged with a competing health organization, the sponsorship would be terminated and not renewed.
Allstate insurance advertising, promotions, or signage is limited to its non-healthcare home and auto insurance. Bayer may sponsor Fresno State athletics as long as it is not in partnership with its pharmaceutical division. It is limited to its crop services division.
Fresno State officials have also agreed to give Valley Children’s Healthcare exclusivity not only at Bulldog Stadium, but also at the Save Mart Center, Bob Bennett Stadium’s Pete Beiden Field, Margie Wright Diamond, football and any other existing or future stadium, ground or area. on campus owned or controlled by the university.
This extends to home games or events of any tenant who plays at any of the sponsored athletic venues, including Central Valley Fuego FC at Fresno State Football Stadium.
New Valley Children’s Stadium signage
The agreement includes illuminated panels on the scoreboard in the north end area of the stadium, on the press box structure and at the rear of the press box facing Millbrook Avenue, as well as a fixed sign on the base of the video marquee at the corner of Cedar and Barstow avenues.
The “Welcome to Bulldog Stadium” signage on the front of the former Bulldog Stadium press box, as well as the “Bulldog Stadium” lettering on the scoreboard were not illuminated.
There will also be signage at Pete Beiden Field at Bob Bennett Stadium and the Margie Wright Diamond at mutually agreed locations.
Signage will be produced and installed by Jones Sign.
Fresno State must also pay for signage removal when the agreement ends on June 30, 2032, or later if the agreement is extended.
This story was originally published August 12, 2022 10:04 a.m.