This article was originally published in Charlotte Business Journal
Written by Erik Spanberg
Paying for a separate practice center for the Charlotte Hornets depends on selling $60 million worth of corporate naming rights for a companion arena district next to Spectrum Center, according to city government plans. In a presentation to Charlotte City Council in June, city administrators, citing a consultant’s analysis, asserted that sponsors will be highly interested in aligning with a district that, for the moment, doesn’t exist.
If successful, the revenue would fully pay for the practice center, which, in turn, would be built as part of a redeveloped Charlotte Transportation Center. Jeff Marks, CEO at Los Angeles-based sponsorship sales firm Innovative Partnerships Group, explained the math to council this way: $2 million annually for district naming rights, $1 million to $2 million for the practice center, and similar combined revenue from five smaller founding partnerships. Assuming a 10-year term, the partnerships would add up to $60 million.
In a separate interview with CBJ, Marks said the mindset and strategy of naming rights and related sponsorships have changed.
Slapping logos on signs and websites is a small part of bringing partnerships to life, he added.
“More important than just generating revenue to finance the building, it’s more around creating an environment where you find really good partners that can actually come in and be part of the ecosystem,” Marks told CBJ. “… In return, they get an authentic business relationship to go use it as a sales platform, rather than just a marketing platform.”
Last year, Innovative Partnerships Group helped match Footprint, an Arizona-based maker of compostable and sustainable food packaging, utensils, and cups, with the NBA Phoenix Suns. It’s a deal that embodies what Marks described above.
Footprint has helped the arena and the team remove plastics in various parts of the building, replacing them with sustainable products. In addition, the restaurants and vendors at the arena, and other businesses near the arena, can be tapped for business-to-business relationships at the same time consumers are using and testing the company’s products. Those types of multi-faceted relationships yield stronger relationships and better results, Marks said.
Kansas City’s Power & Light District, which is not an Innovative Partnerships Group client, offers another example of lining up a roster of sponsorships across multiple categories. The website for the 9-block entertainment, retail, and residential district developed by The Cordish Companies lists 11 companies as corporate partners, including Evergy Inc., PNC Financial Services Group Inc., and multiple beer and liquor brands.
During a recent virtual appearance before City Council, Marks was asked about the potential for drawing sponsors to other city-backed services and investments, including transit and the Atrium Health-anchored medical school district to be built on the edge of uptown.
Marks told CBJ that those types of possibilities could lead to larger and more broadly connected sponsorships.
“Because it’s the city and not an owner (of a team), we potentially could do some stuff that is more valuable and more impressive,” he said.